Mortgage Online at 425.com Mortgage OptionLoan
ARM Now 1.00% *
5.62 APR !!* Rates subject
to change. Payments fixed 1-5 years.
What are the benefits of a OptionLoan
ARM?
This loan is ideal for those who are self-employed, anticipate higher income in the coming
years, or wish to maximize their tax write-offs for mortgage interest. An Adjustable Rate
Mortgage (ARM), it offers a super-low introductory rate and is tied to a very stable
index, meaning your rate may not fluctuate as much.
The
OptionLoan
ARM is also about choices. Each month you can
choose from three flexible payment options:
- Minimum Payment - The lowest payment option, which saves you the most cash.
- Interest-Only
Option - Keeps your payment low but still pays all interest due.
- Fully Amortized Payment - Reduces your principal and will pay off your loan on a 30-year
term.
How does it work?
The OptionLoan
ARM is tied to your choice of indexes:
including Cost of
Funds index and a 12-month average of Treasury securities with a constant
maturity of one-year (the 12 MAT index). As this index moves, your interest rate moves.
Generally, your payment cannot increase more than 7.5% each year. After a period of five
years, or if your loan balance should exceed 110% of the home’s value at closing,
your unpaid loan balance will be recast (recalculated and reamortized) for the remaining
term of the loan. There are risks involved with the OptionLoan
ARM. If the minimum monthly
payment is less than the interest rate charged on the loan, your loan balance will
increase and could ultimately be higher than the value of your home. To help you further
understand how the OptionLoan
ARM works, we have outlined the parameters, in the tables
below.
OptionLoan
ARM
| Index |
|
Choice of
index, including the
Cost of funds index
and the 12-month average of Treasury securities with a
constant maturity of one year |
| First Adjustment |
|
At the end of the first full month |
| First Adjustment Cap |
|
none |
| Periodic Adjustments |
|
Monthly |
| Periodic Adjustment Cap |
|
none |
| Payment Cap |
|
7.5% annually, subject to recast every five
years if the loan balance exceeds 110% of the property's value at closing |
| Lifetime Cap |
|
As posted |
| Floor |
|
None |
| Assumable |
|
Yes |
The Index is the published financial reference to
which your loan is tied.
The First Adjustment is the first time the lender has the option to adjust your
rate.
The First Adjustment Cap is the most your interest rate will increase at the first
adjustment.
Periodic Adjustments are the frequency with which your interest rate and/or payment
can be increased.
Periodic Adjustment Cap is the most your interest rate will increase with each
Periodic Adjustment.
The Lifetime Cap is the maximum interest rate that can be charged during the life
of a loan.
Payment Cap is the most your payment can increase per adjustment, subject to
recasting.
The Floor is the lowest level to which your rate can drop.
Assumable means this loan can be transferred to another buyer, subject to lender
approval.
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