Quote:
Originally Posted by URY914
This is the one we're looking at..........
Mortgage Type:
Right Time 5/5 ARM
Advantages:
Initial interest rate remains the same for the first five years. After that the rate can only change once every 5 years.
Suncoast will pay up to $2500.00 of your closing costs. (see website for details)
90% Financing available for the purchase of a primary residence without Private Mortgage Insurance (PMI) or up to 95% with PMI.
Cash out up to 80% LTV for the payoff of your 1st and 2nd mortgage or SSFCU accounts.
Best Choice If:
You plan to stay in your home 10 years or less.
You need to maximize your purchasing power by selecting the lower rate ARM with a lower initial payment.
Disadvantages:
It's riskier than the 30 year fixed rate if you don't expect your income to increase over the initial 5 year period to cover the possible increase in your monthly payment.
ARM Features:
Rate caps =2.0% per annual adjustment and 6% over the initial rate for the life of the loan.
Index = 5-year CMT
Margin = 2.50%
Interest rate remains the same for 5 full years. The rate adjust every 5 years thereafter
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What's important to ask about is the rate adjustment.
I seem to recall way back in the day when I was considering an ARM the deal was the rate did not change during a specified time period in terms of your monthly payment but the difference in rate was tacked on to the back end. So if the rate went up you did not pay more but the length of your loan got extended.
Something like that.