CONFORMING 7/1
ADJUSTABLE RATE MORTGAGE
DESCRIPTION: The monthly interest rate for this 7/1 ARM is fixed
for an initial term of 7 years. Each year after that term, the rate will be adjusted and
calculated on the basis of the average yield on U.S. Treasury securities adjusted to a
constant maturity of one year, plus an additional fixed margin of 2.75%. The amount of
rate adjustment is limited by caps to no more than 2% at the first adjustment, 2% annually
thereafter, and 5% for the life of the loan. The loan may be converted to a fixed interest
rate mortgage; it is assumable after the initial 7-year period unless the conversion
option is exercised; and no penalty is assessed for prepayment.
REQUIREMENTS: Minimum Loan Amount: None Maximum Loan Amount: $214,600
Term: 30 years.
Eligible Properties: Single family one-unit residences (call for
information on 2-4 unit properties), including FNMA-approved condominiums and dwellings in
Planned Unit Developments (PUDs) and townhouse projects.
MAXIMUM LOAN-TO-VALUE:
| TRANSACTION |
OCCUPANCY |
MAX. LTV |
| PURCHASE |
OWNER-OCCUPIED |
90% |
| SECOND HOME |
80% |
| INVESTMENT |
N/A |
| OWNER-OCCUPIED |
90% |
| RATE/TERM REFINANCE |
SECOND HOME |
75% |
| INVESTMENT |
N/A |
| OWNER-OCCUPIED |
75% |
| CASH-OUT REFINANCE |
SECOND HOME |
65% |
| INVESTMENT |
N/A |
NOTES: (1) The program guidelines presented here
are general.
(2) LTV value is defined as the relationship between the loan amount and
sales price or appraised value, whichever is less. Appraised value should be used for
refinance transactions with more that one year’s seasoning.
(3) Subordinate financing is acceptable, subject to a maximum combined
LTV of 90% for primary home purchases and rate/term refinances. Cash-out refinances are
ineligible for secondary financing. When using subordinate financing, the maximum first
trust cannot exceed 75%.
(4) No-income verification is acceptable with a maximum LTV of 70% for
purchase and rate/term refinances, and 60% for cash-out transactions. Borrowers must be
self-employed and verify liquid assets equal to 50% of stated income or $100,000.
- Private Mortgage Insurance rates are based on monthly premiums for
fixed-rate loans. Other plans are available and different rates apply to loans with
temporary buy-downs or adjustable rate features. Monthly premium plans require no premium
in advance and are collected each month. Annual premium plans require 1 year’s
premium at settlement and the monthly amount with each subsequent payment.
NON-CONFORMING 7/1 ADJUSTABLE RATE
MORTGAGE
DESCRIPTION: The monthly interest rate for this 7/1 ARM is fixed
for an initial term of 7 years. Each year after that term, the rate will be adjusted and
calculated on the basis of the average yield on U.S. Treasury securities adjusted to a
constant maturity of one year, plus an additional fixed margin of 2.75%. The amount of
rate adjustment is limited by caps to no more than 2% at the first adjustment, 2% annually
thereafter, and 5% for the life of the loan. The loan may be converted to a fixed interest
rate mortgage; it is assumable after the initial 7-year period unless the conversion
option is exercised; and no penalty is assessed for prepayment.
REQUIREMENTS: Minimum Loan Amount: $214,601 Maximum Loan
Amount: See Below
Term: 30 years.
Eligible Properties: Single family one-unit residences (call for
information on 2-4 unit properties), including FNMA-approved condominiums and dwellings in
Planned Unit Developments (PUDs) and townhouse projects.
MAXIMUM LOAN-TO-VALUE AND LOAN AMOUNT:
| TRANSACTION |
OCCUPANCY |
MAX. LTV |
MAX. LOAN AMT. |
| PURCHASE OR RATE/TERM REFINANCE |
OWNER-OCCUPIED |
90% |
$400,000 |
| 85% |
$400,000 |
| 80% |
$600,000 |
| 75% |
$700,000 |
| 70% |
$1,000,000 |
| SECOND HOME |
90% |
$250,000 |
| 85% |
$300,000 |
| 80% |
$350,000 |
| 75% |
$400,000 |
| 70% |
$450,000 |
| 65% |
$500,000 |
| INVESTMENT |
NOT AVAILABLE |
| CASH-OUT/REFINANCE |
OWNER-OCCUPIED |
75% |
$350,000 |
| 70% |
$500,000 |
| 65% |
$650,000 |
| 60% |
$1,000,000 |
| 50% |
$1,000,000 |
| SECOND HOME |
NOT AVAILABLE |
| INVESTMENT |
NOT AVAILABLE |
MORTGAGE INSURANCE REQUIREMENTS:
| LTV |
COVERAGE |
MONTHLY PREMIUM |
| 80.01 - 85.00% |
12 % |
0.32 % |
| 85.01 - 90.00% |
25 % |
0.52 % |
| 90.01 - 95.00% |
30 % |
0.78 % |
NOTES: (1) The program guidelines presented here
are general.
(2) LTV value is defined as the relationship between the loan amount and
sales price or appraised value, whichever is less. Appraised value should be used for
refinance transactions with more that one year’s seasoning.
(3) Subordinate financing is acceptable, subject to a maximum combined
LTV of 90% for primary home purchases and rate/term refinances. Cash-out refinances are
ineligible for secondary financing. When using subordinate financing, the maximum first
trust cannot exceed 75%.
(4) No-income verification is acceptable with a maximum LTV of 70% for
purchase and rate/term refinances, and 60% for cash-out transactions. Borrowers must be
self-employed and verify liquid assets equal to 50% of stated income or $100,000.
- Private Mortgage Insurance rates are based on monthly premiums for
fixed-rate loans. Other plans are available and different rates apply to loans with
temporary buy-downs or adjustable rate features. Monthly premium plans require no premium
in advance and are collected each month. Annual premium plans require 1 year’s
premium at settlement and the monthly amount with each subsequent payment.
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