810Loan.com 

 

Rob Schmidt

Rob is here to assist you with your financing needs.  Beginning his financing career in 1985 in the Automotive business and moving forward into Residential Mortgages and Refinancing. His over 17 years as a finance professional insures you of easy, straight forward   Loan assistance.  You’ve got questions, Rob has answers.

Rob’s Promise to you .  It is my policy to provide pre-qualifications free of charge to all people serious about purchasing their new homes or vehicles, or desiring to save thousands of dollars through refinancing or debt consolidation. Furthermore, I believe that my clients are entitled to prompt, courteous, professional service.  If a refinance transaction is not in the client's best interest I will tell that client so.  I build my business primarily on the referrals of my clients, so I take customer service very seriously. Thank you for the opportunity to assist you in meeting your goals

 

You can reach Rob through the following website

 

http://www.810Loan.com  or by calling  408-810-5626  


 

 Adjustable Rate Mortgages
Key Elements of ARM Loans

If you are considering an ARM loan, ask your lender about the following items:

  • Start Rate/Introductory rate
    • The initial interest rate charged on the loan
    • Only good for designated period
    • Often reduced as borrower incentive

     

  • Margin
    • A fixed interest rate that is determined by the lender
    • Added to the index value to determine new mortgage rate
    • The margin can vary widely from lender to lender (2 - 3.5%)

     

  • Adjustment period
    • Period of time between interest rate changes
    • When lender determines rate change by adding index & margin
    • Can be as frequent as a month
    • Can be as frequent as several years

     

  • Rate Cap/Payment Cap
    • Periodic Rate Cap (limit on how much rate can increase each adjustment)
    • Lifetime Rate Cap (limit on how much rate can increase for the life of the loan)
    • Periodic Payment Cap (limit on how much loan payment can increase each adjustment)

     

  • Index
    • Gauge that measures interest rate levels in the economy
    • Added to lender's margin to determine new mortgage rate
    • The most common index is the average weekly yield on the one year T-bill
    • Other common indexes are the 6 month CD, Cost of Funds and LIBOR
    • Current & historical index values

     

  • Negative Amortization
    • Can occur on ARMs with payment caps
    • Occurs when capped mortgage payment cannot cover loan's interest costs
    • Unpaid interest gets added to outstanding loan balance
 

 Links

An Adjustable Rate Mortgage

 case-by-case basis