Our Cash Flow Mortgage (Interest Only) gives you greater control over one of your largest monthly expenses. For the first 5 years, each month you pay only the interest due on your loan.
You can use the principal portion of your mortgage for other purposes, such as paying off higher-cost credit obligations or paying for college or private school tuition.
The Cash Flow Mortgage can also assist you in purchasing a larger, more expensive house. You may be able to trade up to the larger home you need, without increasing your monthly mortgage payment.
After five years, your loan will be amortized for the remaining 25 years and your required payment will revert back to principal and interest.
The benefits of a Cash Flow Mortgage:
- Qualify for 21% more mortgage
- Purchase a larger home
- Pay for a child's college or private school education
- Reduce or eliminate more expensive debt
- Help fund retirement/401(k) plans
The chart below shows a comparison of loan amounts and corresponding purchase prices that would be available based on a 5/1 Adjustable Rate Mortgage with an amortizing payment versus a 5/1 Adjustable Rate Mortgage with an interest only payment. Both examples assume a down payment of 25%.
|
Interest
Rate |
APR |
Monthly
Payment |
Loan
Amount |
Purchase
Price |
| Amortized Payment |
5.875% |
4.137% |
$2,958 |
$500,000 |
$666,667 |
| Cash Flow |
5.875% |
4.109% |
$2,958 |
$604,000 |
$805,334 |
|
21% more house with the same monthly payment!
The example assumes the interest rate remains constant for the initial 60 months
For the 5/1 amortized ARM payment program the APR is 4.137% as of 10-01-09, based on 25% down payment and zero points. Monthly principal and interest payments for the initial 60 months are $2,958 based on a loan amount of $500,000.00, followed by monthly principal and interest payments of $2,230 for months 61 through 360. Rate subject to change after consummation. Subject to credit approval.
For the 5/1 Cash Flow (interest only) ARM payment program the APR is 4.109% as of 10-01-09, based on 25% down payment and zero points. Monthly interest only payments for the initial 60 months are $2,958 based on a loan amount of $604,000.00, followed by monthly principal and interest payments of $2,904 for months 61 through 360. Rate subject to change after consummation. Subject to credit approval.
The chart below shows the payment savings that could be realized each month if you choose the 5/1 ARM Cash Flow Mortgage over the 5/1 amortized ARM for a $500,000 loan amount at an interest rate of 5.875%.
Amortized
Payment |
Cash Flow
Payment |
Monthly
Savings |
Annual
Savings |
| $2,958 |
$2,448 |
$ 509 |
$6108 |
|
Savings over the first 5 years: $30,540
The example assumes the interest rate remains constant for the initial 60 months.
|