Option Arm

Credit Score Minimum is 640, But May Vary Depending on factors such as LTV,
documentation and occupancy

Subordinate financing is allowed on up to 95% CLTV for full documentation loans.

Specialty ARM is a “creative” financial tool that can be used to “create” cash when needed. Each month it offers payment flexibility that allows homeowners the opportunity to stretch cash as needed without having to tap more expensive financing options. These flexible payment options present a built-in home equity line that can be tapped when needed. Deferred interest may be repaid when desired and the balance protection cap ensures that the deferred interest is managed responsibly.

Our Specialty ARM offers the most flexibility when qualifying for a loan; it puts the borrower in control of their finances. Borrowers can manage their money the way they want with up to four payment options each month: Minimum Payment, Interest-Only, Fully Amortizing (30yr), or 15yr Payment.

This option allows the borrower to keep more cash now and keep monthly payments manageable. This payment changes annually and is calculated using the initial interest rate adjustment feature and payment change cap (7.5%), and certain payment options, can result in deferred interest.

The initial monthly payment will be dictated by the start rate of the loan. The payment can only adjust by a maximum of 7.5% per year over the previous year’s payment (except for every fifth year, when the limit does not apply). For example, if the minimum monthly payment is $1,000, the maximum increase the next year is only $75.

This options allows borrower to keep payments manageable while paying only the monthly interest due. If the Minimum Payment is not enough to pay the monthly interest due, deferred interest can be avoided with this option. Note: This option does not result in principal reduction.

This option allows the borrower to reduce the principal and pay off the loan balance on a schedule. It’s calculated to amortize your loan based on a 30yr term from the first payment due date.

This option allows the borrower to own their home twice as fast. The borrower will build equity faster, pay off their loan quicker and save on interest. It’s calculated to amortize your loan based on a 15yr term from the first payment due date.

The FIRST profile is for anyone who has lots of credit card debt or other high interest debt loans. Selecting the Specialty ARM will free up cash flow so that you can focus on paying off high interest credit card debts.

For a loan amount of $150,000, the difference in monthly payment between the prevailing market rate and the Specialty ARM may be as much as $370 per month. Borrowers can take that $370 monthly savings and apply it to pay off their credit card debts. Once they’re paid off, then they can focus on establishing an investment plan or start paying off their mortgage balance.

The SECOND profile is for a savvy investor. Anyone who has demonstrated their ability to control their debts and establish aggressive investment patterns might be a perfect candidate for a Specialty ARM.

The latter profile is particularly true for anyone with a very large loan amount because the larger the loan, the larger the monthly cash flow savings that frees up additional capital to invest. Freeing up an additional $500, $750, or more each month and investing the difference can really grow into something big over the next five years. Odds are the growth of these investments will be much more significant than the equity one might experience by paying off your loan through the typical amortization. Any deferred interest which as been added to the loan balance may be partially offset by any appreciation in value.

· Flexibility in the monthly payment. It is one of the main advantages of the Specialty ARM. The borrower will usually have a choice of payment options. Besides fully indexed and minimum payment options the Specialty ARM also has an interest-only payment option so the borrower can change payment options every month.

· Tax planning. Specialty ARMs may be used for tax planning. The borrower can defer interest payments and at the end of the year, analyze their tax situation. If it serves their tax interests, they can make a lump sum payment toward any interest that has been deferred and deduct it for tax purposes.

· Easy qualifying. Homebuyers with good credit can apply without documenting their income, assets, or source of down payment. This is helpful for self-employed borrowers or those who have jobs where it is difficult to document their income. (SISA on primary residence only).

· Low initial rate. The Specialty ARM is offered with a very low initial rate of 1.75% for the 3 month introductory period or 1.00% for the 1 month introductory period.

all loan products are subject to change at any time
other restrictions may apply