The Winning Combination of Home Loan Interest Rates in Chaparral, NM
The Prodigy Lending A-team comprises mortgage professionals all over the United States, with El Paso as their nerve center. We believe in going above and beyond, for our clients, when it comes to delivering the best mortgage solution services. Our unique selling proposition is anchored on the combined sector experience of our team and complemented by a wide range of customized products at the best rates in the market. We cater to different categories of clients, as we believe no one should be locked out of a chance to become a homeowner.
One of the major hindrances to homeownership in El Paso is the prohibitive mortgage rates. At Prodigy Lending, we have sought to respond to the customer sentiment by rewriting the rules. With fixed-rate mortgages becoming more costly and home prices on the rise, we are now providing alternative interest rate packages in the form of Adjustable Rate Mortgages (ARM)
Our El Paso ARM loans begin with a fixed rate for a period, then convert to an adjustable-rate that is pegged on an index. We currently offer the El Paso 7/1 ARM and El Paso 5/1 ARM whose fixed rates start for the first 7 and 5 years respectively.
It is imperative to understand the moving parts of the El Paso ARM rates so that you can maximize savings, which is the only objective when you take up a mortgage. These three moving parts include The Start rate, The Index and The Fully Indexed Rate.
The Start Rate is the fixed rate you lock for the first 7 years for 7/1 ARM Rate and the first 5 years for a 5/1 ARM rate. This rate, that serves as a “teaser” is usually lower than the market rate, as an incentive for assuming some of the risk borne by the lender later in the term of the mortgage.
The Index is an evaluation of financial activity that is published periodically and serves as a benchmark rate for lenders and investors in any given country. These could include The US Treasury Bills (T-Bill), The London Interbank Offer Rate (LIBOR), The Constant Maturity Treasury (CMT) among others. The loan document will caption the index to be used.
The Fully Indexed Rate is the adjustable interest rate you pay upon expiry of the start rate (after year 7 for 7/1 ARM, and after year 5 for 5/1 ARM). For this rate, we have a Margin, a Cap and a Floor. A Margin is a percentage agreed between the borrower and lender that is added to the Index to give the fully indexed rate. Seeing as adjustable rates or the fully indexed rate may go up or down, the borrower and lender agree on an upper limit, known as the Cap and a lower limit known as the Floor. Caps protect borrowers, while floors protect lenders.
Your mortgage officer at El Paso will take you through each of these important parts when entering the mortgage agreement.
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