Saturday, September 8, 2007

Sept 2007 - The Option ARM cannot be stopped!


$145,000 Mortgage for Under $499/Month!*


Ad Linked from http://www.yahoo.com/ on Sept. 8, 2007:

LowerMyBills.com

The Fine Print

  • *The $483.00 payment is based on the borrower selecting the minimum monthly payment option on a $145,000 adjustable first mortgage loan using a minimum payment interest of 4.00% (which is calculated by taking the actual interest rate minus 3.00%). The actual interest rate is 7.000% with a 7.469% APR.


  • By selecting this option, the loan has the potential for negative amortization. The minimum payment does not cover all of the interest that is owed for the month and, therefore, you will incur deferred interest that is added on to the balance of the mortgage. You may make the minimum monthly payment for up to 5 years or until your new mortgage balance is 115% of the original mortgage amount. The borrower also has the option of making an interest-only payment or making principal and interest payments amortized over 30 years. For example, if the borrower selects to make principal and interest payments amortized over 30 years, the monthly payment will be $964.69. These terms are available for first mortgage loans. To qualify for this monthly payment, the property must be owner occupied single family residence and a loan-to-value ratio of 80%. Credit restrictions may apply. Rate is variable and subject to change daily without notice.


  • Social Security Number is required for home purchase.


  • LowerMyBills, Inc. is not acting as a lender or broker. The information provided by you to LowerMyBills is not an application for a mortgage loan, nor is it used to pre-qualify you with any lender. If you are contacted by a lender or broker advertising within our network, your quoted rate may be higher, depending on your property location, credit score, loan-to-value ratio, debt-to-income ratio, and other factors. Not available in all states. Not all service providers in the LowerMyBills network offer this or other products with interest-only options.

2 comments:

AuAgPb said...

Great blog.

I read the fine print on these type of loans myself. I thought it was pretty straight forward. Are people out there really having difficulty understanding this information??

Kelly said...

Also selecting ARM can be a great solution for borrowers with bad credit who have a reasonable time frame for paying off the loan by refinancing or selling. Plan to get your finances in order to achieve this. Then make a back up plan in case the first one doesn't work. The number of bad credit mortgage foreclosures today is evidence that depending on luck to pay your mortgage can cause you to lose your home. Your bottom line should be that if you can't get out of a bad credit mortgage and into a conventional or FHA loan within five years you should probably consider putting off home ownership and get some financial counseling.