| POPULAR PROGRAMS |
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| NOTE- The average home owner in the US owns their home for 7 years before they move. In Florida this average drops to 4 years. That is one of the reasons the programs below areso popular and effective with Florida residents. |
| ARMs (Adjustable Rate Mortgages)- |
are becoming more and more popular as  rates start to move up. A true ARM adjusts every month. This mortgage has the lowest rate. A 30 year fixed mortgage has the most security; however, this mortgage has the highest rates as well.
HYBRID ARMs- This mortgage combines the lower interest of an ARM and the security of a fixed rate. In this mortgage it is initially fixed for a period of time that you choose- 1, 3, 5, 7 or 10 years. These mortgages are very popular as the average home owner stays in their new home for 5-6 years and in the State of Florida this drops to 4-5 years. |
| CREDIT COMEBACK LOAN- |
This loan allows the borrower to receive a better interest rate as a reward for timely payments. Rate drops -.375% per year, up to 4 years if borrower makes their mortgage payments on time
Example:
- Start Rate: 8.250%*
- 13th Month: 7.875%*
- 25th Month: 7.500%*
- 37th Month: 7.125%*
- 49th+ Month: 6.750%* for the life of the loan
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| NO MI (Mortgage Insurance)- |
Normally you would need to pay 20%  down payment to avoid mortgage insurance. Now you can finance 80% and finance the other 20% at the same time for 100% financing without mortgage insurance. There are other programs such as 80/15/5- 80% first loan, 15% second loan and 5% down. You cannot write off mortgage insurance on your taxes; however, you can write off the interest on both the first and second loan. |
| INTEREST ONLY- |
| The first 4-5 years of mortgage payments go towards interest, almost exclusively. If you have an interest only mortgage with interest only payments your actual payment would be much less as you do not have to factor principal into that payment. |
| 40 YEAR TERM- |
This program spreads your mortgage  payments over 40 years instead of the typical 30 years. By doing this you will have a lower payment. Currently there are even programs available that offer 50 year terms. |
| NO DOCUMENTATION COMMERCIAL: |
| Financing your retail, strip malls, retail condos, multi-family, apartments. |
| Some basics... |
DEFERRED INTEREST- Let's say your actual interest rate is 4.5% and you only pay 1.5% each month. That means you would pay $250 a month for a $200,000 home. That leaves 4.5% minus 1.5% or 3% in interest each month. This interest is added to your mortgage balance. Wow! Why would I want to do that? Well, if your house appreciates (increases in value over time) let's say 15%, that leaves 12% each year that is yours. You would realize this equity when you sell your home.
TERM- This is the period of time in which you pay your mortgage. A traditional mortgage is 30 years. With the Pay Option ARM your term is 40 years. How does this affect me? If you owe $1,200 and pay this over a year that would give you a payment of $100 a month. If you increase the term to 2 years your payment would drop to $50 a month. This is a very simple example with no interest, get the idea? |
| Here's how it works... |
Each month, you will receive an easy to read loan statement that lets you choose the payment that best suits your current financial needs. Pay the minimum amount to free up funds for other uses, or make a larger payment for faster equity build-up. |
| Four payment options |
OPTION 1: Minimum Payment Due- This option gives you more cash now and keeps your monthly payments manageable. This payment changes annually and is capped at 7.5% for the payment amount increase. Using our above example your $250 payment would be capped at $268.75, if it did indeed increase.
OPTION 2: Interest Only Payment- You can avoid deferred interest by paying interest only while keeping your payment manageable.
OPTION 3: 30-Year Full Principal and Interest Payment- Pays all of the interest due and reduces your principal, to pay off your loan on schedule.
Having up to three payment options allows you to manage your cash flow and overall financial picture on a monthly basis.
I will keep you updated as more new and exciting products are introduced in the mortgage industry. |
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| *Interest Rates and programs are subject to change without notice. Rates may not be available at time of loan application or commitment. |
| Got a Question? |
| Do you have a question? We can help. Simply fill out the contact form |
Written by Miles Loss
Licensed Mortgage Broker |
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