Licensed Mortgage Banker in PA and NJ

What's The Right Loan For Me?

Not too many years ago, you couldn't even ask this question. All loans were fixed rate, and carried a fixed monthly payment that lasted for a certain number of years. Today you have a wide range of loans to choose from. Federated Lending Corporation (FLC) has one of the most extensive product lines in the industry.

5/1 Adjustable Mortgage

30 Year Amortization
Rate is fixed for five years then adjusts each year based on the 1 year treasury +2.75%.
Caps are 2% per year and 6% for the term of the loan.   OR

 

30 year Amortization

Rate is fixed for five years then adjusts each year based on the 1 year LIBOR + 2.25%.

Caps are 5% for the initial adjustment, then 2% per year, and 5% for the term of the loan.

 

Loan Range: $100,000 to $417,000
Maximum LTV: Purchase: 95% Refinance: 95% Cash-Out: 80%
Program Strengths: The five year lock in period offers as much security as most borrowers use (The national average life span of a loan is 4.7 years) and at a noticeable savings over the 30 year fixed. The 5/1 usually has a lower par rate( a rate with 0 points) than the 5/25 Balloon and a better rate after the 5th year of the loan.
Program Drawbacks: Five years fixed may not be enough to give one "peace of mind".
Recommendations: Great program for borrowers who want added security of a longer fixed rate term but still want to save money over a 30 year.