COFI Loan, MTA Loan, CODI Loan, COSI Loan and LIBOR OPTION ARMS
(Also sometimes referred to as Pick-A-Payment Loans and Flex Pay Mortgages)

DUE TO MARKET CONDITIONS, THE OPTION ARM IS NOW GONE.

Although the option arm was a good choice with home prices going up or stabilized, in today's declining market and atmosphere of very tight financial guidelines, many people are refinancing out of them to save the remaining equity in their homes. If you have a MTA loan, CODI loan, COFI loan or COSI loan option arm with Countrywide, IndyMac, Greenpoint, Wachovia, World Savings, Bank United, Downey, Chevy Chase, Washington Mutual or any other option arm lender and you want to refinance, give us a call to go over your available loan options before your minimum payment disappears and the rates go up.

IF YOU HAVE A WACHOVIA / WORLD SAVINGS OPTION ARM -- THEY ARE NOW WAIVING THE PREPAYMENT PENALTY SO THAT YOU CAN REFINANCE. PLEASE CALL 866-535-8987 ABOUT YOUR AVAILABLE OPTIONS .

Brokers - Earn extra income with Commercial loans - Click here for more information

A 1 month adjustable rate mortgage is based on an ever-below market index - either the COFI, MTA, CODI, LIBOR or COSI - and has the following loan features:

• A fixed interest rate for an initial 1 month period; thereafter the interest rate (fully indexed rate) may change monthly.
• A minimum payment amount, which is based on the start rate, typically adjusts on an annual basis subject to a 7.5% payment change cap. There are now several lenders offering a minimum payment that is fixed for 2, 3 or 5 years at a higher start rate than the 1 year fixed minimum payment. The higher the start rate, the higher your minimum payment and the less deferred interest or negative amortization you will have.
• A 7.5% payment change cap limits how much the minimum monthly payment can increase or decrease from the previous minimum payment, except on the fifth year of your loan and every five years thereafter. Payment change caps are not effective when the principal balance exceeds 115% (this percentage cap varies depending on program) of the original loan amount and payments may adjust more frequently than annually in such situations to enable your loan to be repaid in 30 years. Payment adjustments are calculated based on the remaining loan term and current interest rate. Please call for specifics - 866-535-8987
• A lifetime interest rate cap that protects you by limiting how high your interest rate can go.
• Interest rate is calculated by adding together the loan margin (this is fixed throughout the life of the loan) and the current month's index rate.
• Your fully indexed rate payments (interest only, principal and interest, 15 year option -- if offered), is based on the outstanding principal balance (this characteristic may not apply to every lender and every program -- please check with your loan officer).
• Some lenders are now offering a 40 year MTA option ARM mortgage. This effects your minimum payment which is amortized over 40 year and your full principal and interest payment. The start rate on a 40 year mortgage loan is typically higher than the 30 year term.

• Each month, you receive a loan statement lets you choose the payment amount that best suits your financial situation: Pay the Minimum amount or Interest Only to free up funds for other uses such as paying off high interest credit cards, contributing to college or retirement funds, etc. Or you can make larger payments for faster equity build-up. It's ideal if your income fluctuates or steadily increases over the years.
  • Up to Four Payments Options each month
    • Option 1 - Minimum Payment Due - This option gives you more cash now and keeps your monthly payments manageable. The minimum payment allows for the lowest mortgage payment of any kind of loan.
      • You can pay the minimum amount, in which case some of your interest might be deferred. Deferred interest,occurs when the monthly payment is not sufficient to cover the Interest accrued during the month prior. The unpaid Interest is added to the balance of the loan, rather than increasing the current monthly payment.
    • Minimum Payment changes annually and is calculated using the initial start rate for the first 12 months.
    • The minimum monthly payment is usually recalculated annually thereafter; and is based on the outstanding balance, remaining loan term and prevailing interest rate. This change is subject to a 7.5% payment cap for the first 5 years.
    • 7.5% Payment Change Cap limits how much this option payment can increase or decrease each year (This applies to the one year fixed pay only.)
    • During the initial interest rate period (1 month), Option 1 represents a full principal and interest payment; therefore Options 2 and 3 are not applicable.
    • Option 2 - Interest Only Payment - At those times when the minimum monthly payment is not sufficient to pay the monthly interest due, you can avoid deferred interest or negative amortization by paying the minimum monthly payment plus any additional interest accrued during the month.
      • Payments remain manageable, with no change in your principal balance for that month
      • Option 2 will not be offered if the interest only payment is less than the minimum payment due, since the minimum payment is the least amount the lender will allow to be paid.
    • Option 3 - 30 Year Full Principal and Interest Payment - This is the fully amortized payment based on a 30 year loan. (Some programs offer a 40 year term, which effects the minimum payment and principal and interest payment only)
      • Calculated each month based on the prior month's interest rate, loan balance and remaining loan term
      • Pays all the interest due and reduces your principal, to pay off your loan on schedule
      • Option 3 will not be offered if the full principal and interest payment is less than the minimum payment due, since the minimum payment is the least amount the lender will allow to be paid.
    • Option 4 - 15-Year Full Principal and Interest Payment (if applicable - depends on lender)- For faster equity build-up, quicker payoff and substantial interest savings, choose the largest monthly payment option.
      • Calculated to amortize your loan based on a 15-year term from the first payment due date
      • Option 4 will be offered only on the 30- or 40-year term and will cease to be an option when the loan has been paid down to its 16th year.
• Lifetime interest rate cap (life cap) which protects you financially by limiting how high your interest rate can go. The rate cap varies from lender to lender and program to program. - See individual programs.
• Fixed margin for the life of the loan. (This is how the lender makes their money.) You should ALWAYS know what your margin is. The margin determines what your full indexed rate will be. Quite often other lenders will not disclose this information and you will end up with an extremely high margin and therefore a very high interest rate. We always disclose our margins to the consumer.
• Manage Cash Flow
  • Having up to four payment options allows you to manage your cash flow and overall financial picture on a monthly basis.
  • If rates increase, you can pay the minimum amount (Option 1), in which case some of your interest would be deferred. Deferred interest, also known as negative amortization, occurs when the monthly payment is not sufficient to cover the interest accrued during the prior month. The unpaid interest is added to the balance of the loan, rather than increasing the current monthly payment.
  • You can avoid deferred interest and take advantage of the maximum tax benefit in the current year by paying Option 2 or 3.
  • Rate decreases may result in accelerated amortization, reducing principal or any unpaid interest more rapidly.
• Tax Planning. The borrower can defer interest payments and at the end of the year, analyze their tax situation. If it serves their tax interests, they can make a lump sum payment toward any interest that has been deferred and deduct it for tax purposes. Please check with your accountant on how best to handle your personal tax situation.
• Easy qualifying. Many COFI, MTA, CODI, COSI, and LIBOR mortgage lenders allow homebuyers with good credit to apply without documenting their income, assets, or source of down payment. We even have one lender that will not ask for employment information, which is perfect for self-employed people who have not been in business for 2 years (Up to 90% LTV only)!
• Increase Flexibility - After considering your monthly financial objectives, choose the available option that best suits your needs. Just enter the amount of the option selection in the payment coupon section of the loan statement. In addition to the four payment options, your monthly statement will show, if applicable, the total amount of unpaid deferred interest on your loan. You may pay all or part of this deferred interest at any time. No options will be offered if the loan is delinquent; then the total amount due will be required.
  
  For more information please call 866-535-8987 or fill out our secure online application or prequalification form.

COFI - Cost of Funds Index (Click here for details on the COFI)
MTA - Monthly Treasury Aveage (Click here for details on the MTA)
CODI - Certificate of Deposit Index (Click here for details on the CODI)
COSI - Cost of Savings Index (Click here for details on the COSI)
LIBOR -London Interbank Offered Rate (Click here fore details on the Libor)

WHAT IS DEFERRED INTEREST OR NEGATIVE AMORTIZATION?

• "What is Deferred Interest OR Negative Amortization?"
  • With the COFI, COSI, CODI, MTA, or LIBOR Option ARM mortgage, CHOOSING THE OPTION OF "MINIMUM PAYMENT" sometimes doesn't cover all of the interest due that month. When that happens, you "defer" the extra Interest, by adding it to the outstanding balance of your mortgage or incur negative amortization. Deferred interest may occur if:
    • You have a mortgage with a special "MINIMUM PAYMENT" option.
    • THE INDEX THAT DETERMINES THE INTEREST RATE on your loan goes up and therefore the interest you owe that month is more than the minimum payment. However, the factors that cause deferred interest are also the factors that make a loan affordable:
      • A MINIMUM PAYMENT allows payments to remain low during the critical first five (5) years of home ownership.
      • PAYMENT CAPS limit how much the monthly payment can rise each year. (Payments can also drop when the Index falls.)
• "How Will I Ever Pay Off My Loan If Deferred Interest Is Making My Balance Go Up?"
  • Your COFI, COSI, CODI, MTA or LIBOR mortgage is designed to pay off on time; it is guaranteed. While there are occasions when deferred interest can add to your loan balance, there are may other periods when your loan pays off at a faster than normal rate. Over time, these periods of deferred interest and faster payoff offset each other. The result: your mortgage pays off on schedule.
• "Must I Have Deferred Interest On My Loan?"
  • No. Your loan has a Deferred Interest Payment Option that offers you a variety of choices on how to pay off your loan. These payment choices are clearly listed on the payment coupon of your monthly loan statement. You can, if you choose, pay all interest as it accrues, thereby avoiding having deferred interest or negative amortization added to your mortgage balance. You'll also always have an option to make a payment based upon the fully indexed rate or Index + Margin, thus avoiding negative amortization all together.
• "Is It To My Advantage To Pay Deferred Interest As It Occurs?"
  • It all depends on your financial situation. For some homeowners, it's wise to pay all the Principal and Interest as it occurs. For many others, it makes more financial sense to pay just the Interest that is due, and others will opt to defer both their Principal and Interest, as they are looking for the lowest payments possible.
  • THE ADVANTAGES OF HAVING a "DEFERRED INTEREST or Negative Amortization" OPTION : Electing not to pay all the Principal and Interest will mean more cash in your pocket. Choosing this option (Minimum payment) makes financial sense if it helps you:
    • Keep house payments affordable in case of the loss of a job.
    • Save money by paying debts with higher interest rates than your mortgage, such as high interest credit cards. Use the money to help pay your other debts instead. You'll save the difference between the rate charged on other loans (18% or more for VISA, MasterCard, or store credit cards) and the much lower rate on your COFI, COSI, CODI, LIBOR or MTA mortgage, which is tax-deductible.
    • Make home improvements that increase the value of your property. Rather than paying deferred interest, use the cash you save to help you for:
      • New carpeting.
      • Adding a bathroom.
      • Landscaping your property.
      • Installing a sun deck.
    • Invest in other profitable alternatives. Use the money that remains in your pocket when you choose not to pay deferred interest to:
      • Fund an IRA or invest in a mutual fund.
      • Build up a college fund for your children.
      • Buy other investment properties.

The Index changes every month, but the Margin never changes. Your COFI, MTA, COSI, LIBOR or CODI loan balance will change monthly regardless of what payment option you choose:

• If you make the "Fully Indexed" principal and interest payment option every month, your loan balance will always decline regardless of the movement of the Index. This is because your loan balance will be lower each month, and this lower balance will then be re-calculated by the new monthly Index + Margin. Hence, the yearly 7.5% Payment Cap will never be enforced or "come into play", because your outstanding loan balance will always be declining even if the Index is increasing.
• If you make only the "Minimum payment" option, your loan balance will increase (negative amortization) for the first few years. This option is completely allowed by the Lender without hurting your credit rating, or charging any type of late fees. Hence, If your monthly Minimum payment is not sufficient to pay the full amount of interest due, the Lender adds this accrued but unpaid interest to the unpaid principal balance of the loan. Until repaid, deferred interest bears interest at the fully indexed rate of the loan. Eventually (because of the "forced" yearly 7.5% payment Cap adjustments), the Minimum payment is more than sufficient to pay the full amount of interest due, (this usually takes between 6-8 years depending upon your initial "Starting Rate", Margin, and the movement of the Index), and the Lender will subtract the amount that exceeds the interest due (negative amortization) from the principal balance, resulting in a principal reduction. Eventually, because of the 7.5% yearly payment cap, your Minimum payments will become a full P.I. payment or Scheduled payments.
• Your existing principal balance may never exceed 110% (this amount may change from lender to lender) of the original principal balance amount in any 5 year period. If deferred interest (negative amortization) ever caused your principal balance to reach these limits, the Lender would immediately increase your Minimum payment without regard to the 7.5% payment cap. The increased Minimum payment would pay off the loan at the then current fully indexed rate (Index + Margin) and remaining term. In that event, in the 5th, 10th, 15th, 20th, and 25th years, the Lender would take the amount of deferred interest, add it to the existing balance, and "recast" or re-amortize the loan so that it will still pay off on its original term. This has never happened since the creation of the COFI program in 1981, because the Index moves so slowly!!

7.5% Payment Cap

COFI, CODI, COSI, MTA and LIBOR (option arms only) Lenders do not implement the traditional yearly interest rate caps ( 2% yearly cap / 6% life cap). Instead, our Lenders use a payment cap. The "Payment Cap" is designed to keep the yearly increase in your monthly MINIMUM payment low, in the event that the interest rate is rising so rapidly that the Borrower could default on the loan. With a payment cap, the next year's monthly MINIMUM payments could never rise above 7.5% of the prior year’s monthly payments. For example, a $100,000 loan balance with monthly payments of $700.00, a 2% "Interest Rate" increase in the existing interest rate would correlate into a new monthly payment of $833.10. A difference of $133.10 per month. The same $100,000 loan balance with monthly payments of $700.00 with a "Payment Cap", the next year's monthly MINIMUM payments could only increase by $52.50 for a total monthly payment $752.50. If you always make the full P.I. payment (Scheduled payment), the Payment cap will most likely never come into force, even if the Index increases for a long period of time. This is because every month or every two weeks (Bi-weekly program), you will have a "decreasing" loan balance. Also, these Indexes move SLOWLY. If you always make the Scheduled payment, when the COFI, CODI, COSI, LIBOR and MTA starts to drop, your payments will drop, but never more than 7.5% of the prior years Scheduled payment. But if you only make the Minimum payment or Interest-only payments, then the Payment Cap will come into play (on your yearly anniversary date) and increase your prior year "MINIMUM payment" no more than 7.5%. (The 7.5% payment cap has nothing to do with your fully Indexed Rate or Index + Margin.) Once your "Minimum payment" and or "catches up" to the normal full P.I. or Scheduled payment (to still pay your house off in 23 years via bi-weekly payments, or 30 years via monthly payments) your payments will not be forced up anymore via the Payment Cap. If at that time the COFI, CODI, COSI, LIBOR and MTA index started to drop, your payments will start to drop. The Minimum payments are guaranteed for the first five (5) years regardless of the movement of the Index.

• For more information please call 866-535-8987 or fill out our secure online application or prequalification form.

Depending on the loan program, the following additional benefits may apply:

• Convertible to a Fixed rate between years 4 and 7 (CODI LOAN AND COSI LOAN ONLY)
• Loans structured so that there is no Mortgage Insurance (1st up to 80% and 2nd for required balance)
• 80% LTV (One Loan) - salaried or self-employed borrowers; earned or passive income acceptable; salaried borrowers may obtain 100% gift funds for downpayment & closing costs; 10% gift funds allowed for self-employed borrowers (case by case); salaried borrowers do not need any established credit (case by case); no asset reserves required; owner occupied only. (CODI LOAN & COSI LOAN)
• 100% Financing - You may now get 100% financing with the MTA loan, CODI loan or Libor option arm. Please call for more information - 866-535-8987
• FOREIGN NATIONALS - Up to 70% Loan - No Minimum Credit score, No Established credit necessary, No Social Security Number Required, No verification of assets required on owner occupied transactions, Second homes or investor property transactions acceptable. (CODI & COSI); 80% LTV for MTA - US Credit not required.
• No income, No asset, No employment verification - PERFECT FOR SELF-EMPLOYED LESS THAN 2 YEARS!!! (Owner-occupied only - 90% LTV/First time buyers do not qualify for this program)
• No income/No asset programs
• 89.9% LTV with NO MORTGAGE INSURANCE!!
• Bi-weekly payments (CODI mortgage & COSI mortgage) starting at 1.95%. The bi-weekly payment helps keep negative am at a minimum.
• Life caps as low as 9.95%
• Will finance multiple Investment properties; Some lenders have no limit on amount of other investment properties owned.
• 2nd homes to $1,500,000.00
• Primary residences to $6,000,000.00
• Non-Occupant Co-Borrower allowed - 80% LTV - immediate family members only.
  
• THERE ARE MANY OTHER BENEFITS!!! TOO MANY TO LIST!!! CALL FOR DETAILS!!!