Mike’s Real Estate Show

Rates as of 3/19/07

 Find below our interest rate update from Alicia Hodenfield of Investor’s Trust Mortgage. She talks about a ARM product (adjustable Rate Mortgage) which has NEGATIVE AMORTIZATION so you know UP FRONT this will be a by-product of using the “minimum” payment option. You must remember, this is your call!! You have the flexability of a smaller payment but also need the DISCIPLINE to know when to use this option. Don’t use selective “listening” when you work with one of these programs. There still is NO free lunch!

Another option to the Option  ARM product is the Flexible Hybrid ARM.  This product is fixed for a specified period (3 years, 5 years or 7 years), and then the rate is an adjustable based on the 1 year LIBOR plus a margin of 2.75%.  The Flexibility is in the Minimum Payment.  It is a percentage of the fully amortized payment – example: For a borrower financing 80% or lower LTV, the minimum payment on a 5 year Flexible Hybrid ARM is 55% of the fully amortized payment.  The current rate on a 5/1L Flex ARM is 6.625%, which includes a 3 year pre-payment. (Fully amortized payment on $400,000 loan amount at 6.625% is $2,561.24, 55% of that payment is $1408.68)  Please note:  Making the Minimum payment will create Negative Amortization.

Conforming fully amortized  interest only
30 year fixed 6.00 %   6.125%
3/1 ARM  6.125%   6.375%
5/1 ARM  6.125%   6.375%
7/1 ARM  6.125%   6.50%
10/1 ARM  6.25%    6.50%

  fully amortized  interest only
JUMBO – up to $650,000; add .25 point for loans up to $1mil
30 year fixed 6.375%   6.5%
3/1 ARM  6.125%   6.25%
5/1 ARM  6.25%   6.375%
7/1 ARM  6.375%   6.50%
10/1 ARM 6.50%   6.625%

100% financing: Due to the many changes in the 100% and 100% blended options, I recommend you contact me directly to inquire about rates and options.  For fully documented borrowers there are still options, as well as stated borrowers with credit scores greater than 700.

Here’s the fine print:
Conforming limit is $417,000.00.  Rates assume impound account set up and except for 100% financing, assumes loan to value (LTV) no more than 80%.  Funds to be used for purchase.  Cash out refinances may incur higher rates.  Rats quoted with a 30 day lock.  Subject to qualifying borrowers and properties.  Rates quoted for fully documented loans.  Rates are as of 3/19/07 and are subject to change.  Rates are quoted WITHOUT points.  Borrowers may buy down the rate.  Each application is evaluated on an individual basis.  There may be better suited programs for borrowers the may offer better rates/terms as well as options for non-qualifying borrowers. 

 

Alicia Hodenfield
Investors Trust Mortgage
(707) 284-2718 direct line
alicia@investorstrust.com
www.aliciahodenfield.com