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Interest
Only Loan in Maryland
DON'T FALL FOR ALL THE MTA HYPE! That 1% start rate sure sounds good... but be sure to ask what the real rate is after month one or month three. Example, an acquaintance, who is very smart (a rocket scientist) almost fell for an MTA Loan that was misrepresented. First I asked him why he did not call Consolidated (he was sorry he didn't)... I explained that the real rate after payment number one would jump to the margin (2.25%) added to the index (4.35 as of 12/16/2005), which is a real interest rate of 6.60%. I further explained that his interest rate would adjust every MONTH. I asked him why on Earth he would pay such a high rate, when the interest only 30 year fixed rate was 6.2389 APR?? He insisted his rate was 1% for the first year, and could only increase 7.5% a year after that. I explained to him that the "payment", not the rate, could increase that much each year (7.5%)... and recommended that he call the loan officer and ask him point blank what the rate would be after his first payment. The loan officer, I am told, did a little tap dance around the question, but finally confirmed what I was saying all along. Of course he did not close on that loan. He still thanks me when I see him around. If you have ANY questions about the MTA or similar loan types, please call our office for honest answers. Those loans DO WORK for some borrowers, based on their individual goals and needs. Yes WE DO OFFER THE "MTA LOAN", and the other versions, but they are NOT for everybody. The Interest Only Loan - This home loan product offered by can be a smart alternative for sophisticated borrowers who view their conforming or jumbo mortgage as a money management tool. With this loan type, borrowers can maximize their cash flow by making fixed rate interest only payments during the first three, five, seven, or ten years of the 30 year loan. By freeing up their funds this loan program allows borrowers to direct their savings to short term investments or other interests. This can add up to substantial monthly savings and increased purchasing power.
These loan
types are not for everyone, please call for additional information including
guidelines, margins, caps, cash out guidelines, down payment requirements,
and other necessary information.
or click
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