What exactly is it LIBOR can one of you fine lenders shed some light on?

The LIBOR that you referring to is an index used to determine the rate of a number of common Adjustable rate mortgages. It stands for London Interbank Offered Rate. The index is determined by averaging the LIBOR over a fixed period of time. Another common index is the 1 Year US Treasury index which is also used to set ARM rates. These indexes move in similar directions based on the economy and other financial markets but they are not identical. The LIBOR is more oriented to International markets while the Treasury is affected more by US markets. The ARM guidelines that describe the loan you are applying for while determine which index is being used.