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Welcome
to Carteret Mortgage!
Your source for consumer information
Option Arms
Construction/Perm
Interest Only
Mortgage
Commercial Loans
Real Estate
Investor
Refinance
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ARM Alternative
ARM Alternative products are a temporary
buydown on a fixed rate loan. Want the low initial interest rate of an ARM
but the payment security of a fixed rate loan? The difference between the
ARM Alternative and a normal temporary
buydown is that we, not the borrower,
builder or seller, pays for the costs of the buydown. ARM Alternative
loans are available with either conventional fixed rate loans, FHA, or VA loans.
One of our lenders is now financing the cost of the buydown which will save
moneyby making the rate lower.A temporary buydown is a reduction in the
interest rate you actually pay on your loan for a stated period of time.
Conforming ARM Alternative
- It's a fixed rate, not adjustable
- It's a temporary buydown of the permanent, fixed rate
- Three buydown options are available
- Option 1: 2% - 1%
- Option 2: 1.5% - .75%
- Option 3: 1% - .50%
- Eligible properties:
- 1-4 unit primary residences
- 1 unit second homes
- Eligible transactions:
- purchase and rate/term refinances
- cash-out refinances if:
- FNMA first mortgage (FHLMC will be eligible when systems
enhancements are complete)
- Maximum loan amount is $417,000
- each borrower has a minimum credit score of 660
- Maximum financing
- 95% LTV for primary residence purchases
- 90% LTV for 1 unit second homes
- Qualifying rates:
- start rate for primary residences
- note rate for second homes
- 30 year term and interest only is available
- Maximum loan amount is $417,000
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Non-Conforming ARM Alternative
Same as the above with the following exceptions:
- Minimum loan amount is $417,001
- One buydown option is available: 1% - .50%
- Only primary residences - No second homes
- Ratios are 33/38 to 90% LTV and 28/36 over 90% LTV
- Qualifying rate:
- if LTV 75.01 to 95%, qualify at second year rate
- if LTV 75% or less, qualify at start rate
- Subordinate financing is not allowed
- Extended locks or rate cap and float-down options are not available
- Purchase transactions only
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Example Of The ARM Alternative Mortgage Compared To Other Mortgage
Plans
This example, based on a $100,000 loan for 30 years, demonstrates how the ARM Alternative's lower qualifying rate allows you to buy
more house.
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ARM
Alternative |
Fixed
Rate |
1 Year
ARM |
|
| Qualifying Rate |
7.0% |
8.5% |
7.5% |
|
| Note Rate |
9.0% |
8.5% |
5.5% |
|
| Qualifying Payment |
$665.30 |
$768.91 |
$699.22 |
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Income Needed to Qualify
For The Mortgage Payment |
$28,500 |
$32,950 |
$29,950 |
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ARM Alternative Program fills these needs:
| Borrower Need |
Feature |
| Low Cash To Close |
Get a 95% Loan-to-value with a lender funded buydown |
| Home Affordability And Easy Qualification |
Qualify at first year rate. |
| Payment Security |
Interest rate is known over life of loan |
| Speed |
Prequalification/pre-approval fast and free |
Read more about Arm Alternative
Closing Costs I have an article "Buying
your home in 2008" by email explaining negotiating strategy in today's
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Prequalify for your Arm Alternative
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