The bank is telling me I can get this mortgage. What does it mean in plain english, cause as they wrote it it makes no sense to me:

"The loan product for the first mortgage is a monthly adjustable tied to one month libor plus a margin of 2.55 with a half of a point. The second is tied to prime plus a margin of .50"

It's like a foreign language.

THanks!

LisaB4657

They are telling you that the first mortgage will have an interest rate that changes every month. The rate will be the current Libor rate (a London index rate) plus 2.55 percent. So if the Libor rate is 5%, then the rate they charge you will be 5 plus 2.55, or 7.55%. It sounds like they will charge you one-half of one percent of the entire loan as a fee. The second mortgage interest rate will be your lender's prime rate plus one-half of one percent. So if your lender's prime rate is 6.5%, then the rate they charge you will be 6.5 plus 0.5, or 7%. It doesn't say whether the second mortgage's interest rate will be adjusted monthly or annually.