Adjustable Rate

We offer many different types of adjustable–rate mortgage loans. They can range from 3- to 5-year balloons to 30-year ARMs (adjustable rate mortgages). On all of these types of loans, if and when the rate changes, the payment amount will also change to reflect the rate change. This is usually done at predetermined intervals.

Balloon loans

The interest rate is fixed for a specified term of the loan, then needs to be reset at a new rate.

Example: a 30-year loan with a 3-year balloon has set payments for 35 months; the 36th payment is the entire balance. At that renewal, the rate may change based on current market rates. Normally the rate is lower for a 3-year balloon than a 5-year term.

ARM loans

The interest rate can adjust every 3 years. It can only change by 2.00% at any one time, and only 6.00% over the life of the loan. The rate is tied to a 3-year treasury index. Any rate change does reflect in the payment amount.

General Terms:

• Up to 30-year financing
• Appraisal required
• Title work required
• Interest rate changes daily until "locked" and varies depending on term of loan
• Purchase agreement to closing is normally 30 days or less
• All loans subject to credit approval

Costs

Some costs are variable depending on the property location, as costs vary from state to state. In addition, lender fees vary greatly. An individual is wise to shop and compare. Other factors that may affect the closing costs are:

• Size of loan
• Title insurance
• Less than 20% down payment requires monthly private mortgage insurance
• Recording fees
• Attorney fees
• Escrowing for taxes and insurance
• Lender you are using

Additional Information

• Mortgage Rates and Online Application
• Application Checklist
• Construction Loans
• Fixed Rate
• Adjustable Rate
• Home Equity Line of Credit (HELOC)
• Junior Mortgages
• Land Lot Financing

This loan has a variable rate feature. The Annual Percentage Rate for qualified borrowers is 5.058% APR as of July 6, 2004. Rates are subject to change. In this example, a $160,000 loan with a 30-year term would have a monthly payment amount of $858.91. This example assumes $1,391.77 in additional prepaid finance charges. This rate assumes a 20% down payment. If the down payment is less than 20%, private mortgage insurance may be required, which will increase the APR and payment amounts in this example.

The Annual Percentage Rate may increase (on each “Interest Change Date”) if the 3 Year Treasury Bill increases. The rate will not increase more than once every 36 months after the initial 3 years and may not increase by more than 2.000% every change date. The interest rate will not increase above 11.0000% and not decrease below 3.0000%. Any increase in the interest rate will take the form of the higher payment amount. For example, based on the above information, if after 36 payments the interest rate on your loan increased by the maximum 2.0000%, the rate would be 7.0000% and the next payment would be $1,049.26.