|Mortgage and Lending||
|location_on Encino, CA — All Pro Real Estate & Mortgage Inc.|
|web Maricela Rios's (allpromortgage) Blog|
Facts about the 5 yr fixed pick a pay:
1) The note rate is fixed for 5 yrs, just like a standard 5/25
2) The note rate is comparable to what is normally the
margin + index (on a traditional option arm); but the
note is usually lower and has no adjustments
3) The borrower can pay the note rate Interest Only,
30 or 15 yr PI
4) The deferred payment, i.e. start rate is calculated interest
only and is usually comparable to the same payment
at 1.00% - 1.75% PI
5) The deferred payment is fixed for 5 yrs or 115% which
is about the 55th month
6) The 5 yr fixed pick a pay allows for 100% financing
vs. 90% on a traditional option arm
7) Borrowers that will take this program are those who
a) Want out of a moving index option arm, and/or
b) Cannot afford going rates starting at 6.50%
c) Need over 90% financing
Just like a standard 5 yr fixed – but
with 4 payment options!!!
Example: 500K, 80/20, SIVA, SFR, Owner Occ – 681 mid-Fico
5 YR FIXED NOTE RATE: 6.875%@par (comparable to a
traditional 5/25) = $2291 Interest Only
DEFERRED INTEREST RATE: 3.875% = $1291 per month
(FYI – 1.00% PI = $1286)
The borrower is deferring a FIXED $1000 per month
($2291 minus $1291) ÃÂ¢ÃÂÃÂº 12K per year
ÃÂÃÂ¢ÃÂÃÂÃÂÃÂ In a slow California market researchers estimate that
homes appreciate 5.00%-7.00% per year
Ã¢ÂÂ 500K x 7.00% = 35K…..minus 12K deferred interest
ÃÂ¢ÃÂÃÂº Equals 23K Gross appreciation
ÃÂ¢ÃÂÃÂº Equals 13K Gross appreciation (@ 5.00%)
AND the borrower only paid $1291 per month for $400K
WHY WOULDN’T A BORROWER
TAKE THIS PRODUCT???
The 2ND MORTGAGE IS A FIXED 30/30 STARTING AT 11.99%
(100 CLTV) Based on 100K the payment is only $1027/mo.
Mortgages these days are NOT about rates
….they’re about payments, comfort regarding mortgage stability,
and overall investment outcome. This program offers all of these
necessities and more!!!
10-14 DAYS TURN-AROUND ON MOST “REFI” LOANS!!!
Refinancing your current mortgage has never been easier. If you thought refinancing meant getting buried under mountains of paperwork, think again! We make it easy, and worry-free!! Call me right now!