The FED started lowering PRIME since August 2007. It currently sits at 5% and is expected to stay low for the rest of this year at the very least. There seem to be many consumers out there that have short terms needs for their home financing. I have been putting several people into a rate as low as 4.625% by paying off their first mortgage with this variable rate program.
There are no catches to this program. Everything I pointed out below are the important terms you need to know about this program. Again it is good for short term use. the two most popular have been if someone is selling their home in the next 1-2 years and second it is good to take advantage of 4.625% and then be on a rate watch list and lock into a 30 year when rates go down. That way we are timing the market for a good 30 year fixed loan and while you do that you get 4.625% in the mean time.
- Minimum Loan amount is $100,000
- Max of 70% loan to value. We cannot do these if the home will not appraise for 70% of the value based on the loan amount.
- NO CLOSING COSTS
- Rate as low as 4.625% with excellent credit. (rate is PRIME minus .375% = 4.625%)
- Rate is variable and floats with PRIME. Note that Prime is a rate that could change when the FED meets every 6 weeks. A majority of the time PRIME does not change more than .25% - .50%. That is one of the reasons why I really like this program.
- No Prepayment Penalties
- Interest Only or Principal and Interest Payment
- Payment on $100,000 = $385 Payment on $200,000 = $770, $300,000 $1,155, ECT.
This is a great program to take advantage of for people who want short term money. Examples below of people who I have done this loan for include:
- People who plan to have this loan for say 2 years or less. if so why not take advantage of 4.625% and a rate that can be managed because if it does change it will only happen when the FED meets and it doesn't change much when they start raising it. I would say it is a safer variable rate because of those things.
- I have done this loan for people who will be refinancing soon into a 30 year fixed but say the rates on the 30 year fixed are a little high right now. People can easily get into this 4.625% rate and then time the market for the 30 year fixed by being on a rate watch list and when the rates come down we lock them in. There are NO FEES to do this equity line so what do you have to loose.
Above are just a couple of examples of why you might want to do this for your mortgage loan providing the home will appraise high enough to do something like this. if you have any questions please feel free to contact me.
Thanks,
Phil White 480-430-3080
