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| INTEREST ONLY PROGRAM COMPARISON | |||||||||||
| 30 Year Amortization Comparison | |||||||||||
| Loan Amount: | $ 250,000 | ||||||||||
| Interest Only | 30 Year Amortized Loan | ||||||||||
| 1 Month | 6 Month | 3/6 ARM | 5/6 ARM | 30 Year Fixed | 30 Year Fixed | 5/1 ARM | 5/6 ARM | ||||
| LIBOR | LIBOR | (3 year fixed) | 5 year fixed | Conforming | Jumbo | Conventional | Jumbo | ||||
| Oct-03 | Rate (subject to change) | 3.500% | 3.625% | 5.875% | 6.375% | 6.250% | 6.125% | 5.500% | 5.625% | ||
| Monthly Payment | $729.17 | $755.21 | $1,223.96 | $1,328.13 | $1,539.29 | $1,519.03 | $1,419.47 | $1,439.14 | |||
| Savings over 30yr Conf. | $810.13 | $784.08 | $315.33 | $211.17 | |||||||
| Annual Savings | $9,721.52 | $9,409.02 | $3,784.02 | $2,534.02 | |||||||
| Savings over 30yr Jumbo | $789.86 | $763.82 | $295.07 | $190.90 | |||||||
| Annual Savings | $9,478.32 | $9,165.82 | $3,540.82 | $2,290.82 | |||||||
| Savings over 5/1 Arm | $690.31 | $664.26 | $195.51 | $91.35 | |||||||
| Annual Savings | $8,283.67 | $7,971.17 | $2,346.17 | $1,096.17 | |||||||
| Savings over 5/6 Jumbo | $709.97 | $683.93 | $215.18 | $111.02 | |||||||
| Annual Savings | $8,519.69 | $8,207.19 | $2,582.19 | $1,332.19 | |||||||
| How does an (interest only) product work? | |||||||||||
| An interest only program based on the One Month LIBOR. LIBOR is an abbreviation for "London Offered Rate" and is the interest rate offered by a specific | |||||||||||
| group of international banks located in London for U.S. Dollar deposits, or the flow of U.S. dollars through international banks. The loan has a 25 year | |||||||||||
| term and is interest only for the first 10 years; then it fully amortizes the remaining 15 years. THERE IS NO NEGATIVE AMORTIZATION. It is a simple | |||||||||||
| interest payment which is your interest rate multiplied by your loan amount then divided by 12. (NO PREPAYMENT PENALTY) | |||||||||||
| Other Interest Only Program Advantages: | |||||||||||
| You pay below market rates for jumbo financing, typically you will pay a higher interest rate for loans above $300,000. You pay the same low interest | |||||||||||
| rate for loan amounts of $100,000 and $1,750,000. | |||||||||||
| Tax Advantages - You are paying the lowest possible interest rate on your mortgage loan. Example: 39% tax bracket, you actually would pay 2.3% | |||||||||||
| after tax rate on this mortgage (1/22/02). The likelihood is that you can earn more than a 2% yeild on any other investment, so why tie up all your money | |||||||||||
| paying on a fully amortized loan? Equity builds faster with an interest only loan with direct principal reduction. Any amount you pay each month that is | |||||||||||
| over your interest only payment will go DIRECTLY TOWARDS PRINCIPLE. | |||||||||||
| ****Rates subject to change without notice**** | |||||||||||
| **** Interest Only Rates include ysp (.75 on 1 & 6 mo.) (.375 on 3/6 & 5/6) | |||||||||||
| ****30 Yr Conforming includes 1.125% ysp | |||||||||||
| ****30 Yr Jumbo includes .625% ysp | |||||||||||
| ****5/1 ARM includes 1.0% ysp | |||||||||||
| ****5/6 Jumbo ARM includes .75% ysp | |||||||||||