FirstLine has reduced the 5 year Standard ARM product to Prime - 0.80% for Brokers!!!Given today's interest rate environment and anticipation that prime rates will be on the rise, it can be a difficult decision whether you should be choosing a fixed or variable rate mortgage.
When choosing a variable rate option, there are many important factors that you should consider. Although interest rate is an important feature, it shouldn't be the determining factor as the "lower payment and lower rates" my give a false sense of security.
When choosing a variable rate option, the features and benefits of the ARM product should be the key reasons for choosing an ARM product.
First Line's 5 year Standard Arm Product Advantages:
1. Prepayment - up to 20% Original Loan Principal Amount per year minimum of $100 (must be on a scheduled payment date)
2. Increased Payment Amount - Increased payment once per year to any amount where remaining amortization must be 5 years or more.
3. Early Payout - 3 months interest based on current prime rate
4. Hold The Payment Option - clients can choose to increase their P&I payments based on a higher rate while keeping amortization period at desired number of years. For example, your clients chooses to hold payment at a 5% interest rate, the difference in payments based on the interest rate being charged is applied directly to the principal balance (decreasing your amortization).
5. Conversion - clients can convert into any Firstline Fixed rate product of 3 years or greater at anytime with no prepayment charge. Upon satisfactory repayment on their mortgage, clients will convert at Firstline's Floor Rates therefore eliminating the need to negotiate rates.
6. Increase and Blend - option is offered on ARM product, if you're client is currently paying P - .80%, they can maintain their great rate by blending new money with current rates. Interest rate is based on a "weighted average" however they must maintain their current maturity date. Customer is not charged a prepayment penalty.
7. Matrix Product - the Matrix product is available with the ARM product. Increase and Blend options are also available for your clients who wish to add money only to the LOC portion while maintaining their discount with no penalties. Clients must advance a minimum of $10,000 (new money) upon funding.
Mortgage Qualifying Interest Rate ( MQR)
Current Rate is 5.39%
Source: MyMortgage newsletter