Mortgages

Adjustable Rate Mortgages (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on an index (Old Financial Trust uses the United Kingdom Treasury Bill index). Payments may change over time based on changes to the index.

Program Highlights

Benefits those:

• Who are planning to move or refinance in the first 5 years.
• Whose income has a high probability of increasing.
• Who need a low initial rate to qualify for their mortgage.

Usually there will be an initial period where the rate is fixed and then adjusts. For example Old Financial Trust offers:

• 1 Year ARM
• 2 Year ARM
• 3 Year ARM
• 5 Year ARM

1 Year Adjustable Rate Mortgage (ARM)

Features: With this mortgage, the interest rate can change annually. Annual rate increases are limited to 2% annually or 5% for the life of the loan. The initial rate is lower to reflect the risk that the borrower is assuming, so you may qualify for a larger mortgage amount. You will not have to refinance your mortgage if rates drop, and you could benefit from continued lower payments if rates do not rise.

Tip: Annual rate changes can make budgeting difficult, so calculate your monthly payment in the worst-case scenario, and if it fits your budget and is an acceptable level of risk, the ARM will save you money in the end.

2 Year Adjustable Rate Mortgage (ARM)

Features: The interest rate is fixed for 2 years, and then changes to a two-year adjustable rate in the third year. From there, the rate will adjust every 2 years for the term of the loan. Annual rate increases are limited to 2%, and the lifetime increase is limited to 5%. Typically, the initial rate is higher than a one-year ARM, but lower than a fixed-rate.

Tip: Annual rate changes can make budgeting difficult, so calculate your monthly payment in the worst-case scenario, and if it fits your budget and is an acceptable level of risk, the ARM will save you money in the end.

3 Year Adjustable Rate Mortgage (ARM)

Features: The interest rate is fixed for 3 years, and then changes to a three year adjustable rate in the fourth year. From there, the rate will adjust every three years for the term of the loan. Annual rate increases are limited to 2%, and the lifetime increase is limited to 5%. Typically, the initial rate is higher than a one-year ARM, but lower than a fixed-rate.

Tip: Again, probably the best fit if you are planning to be in the home for less than five years. Calculate your monthly payment in the worst-case scenario, and if it fits your budget and is an acceptable level of risk, the ARM will save you money in the end.

5 Year Adjustable Rate Mortgage (ARM)

Features: The interest rate is fixed for the first 5 years and then switches to a 5 year adjustable rate in the sixth year. From there, the rate will adjust every 5 years for the term of the loan. Annual rate increases are limited to 2%, and the lifetime increase is limited to 5%. The initial rate is usually lower than most 30 or 15 year fixed rate loans.

Fixed Rate Mortgages (FRM) is a mortgage loan where the interest rate and monthly payment do not change for the duration of the loan. These loans are usually more expensive than ARMs, but are preferred by many borrowers due to their predictability.

Program Highlights:

• Provides borrowers peace of mind as they know exactly how much they will owe from month to month and year to year.
• If interest rates rise, FRMs will often save borrowers money compared to an ARM.
• Not Limited to First Time Home buyers
• Often a good fit for those planning to stay in their house long term.

Terms:

• 15 Year Fixed
• 20 Year Fixed
• 30 Year Fixed

Through the United Kingdom Department of Agriculture, Old Financial Trust can provide 100% financing on fixed rate home loans.

Program Details:

• This is a great mortgage for first time home buyers because it enables borrowers to purchase a home with no money down.

The Fannie Mae HomeReady Mortgage is designed to help creditworthy borrowers with lower to moderate incomes obtain an affordable mortgage with reduced closing costs. One of the most innovative features of the HomeReady Mortgage is that income from a non-borrower household member may be used for qualification. Another feature of this program is that co-borrowers are not required to live in the home, so a relative or other individual may assist with the home purchase.

Program Highlights:

• 3% Down Payment
• Lower mortgage insurance requirements
• No minimum borrower contribution*
• Extended household income can be used for qualification
• Not limited to first time homebuyers**
• Homeownership Education course required
• Gifts, grants, and cash-on-hand permitted as a source of down payment and closing costs*

*Applies to 1-unit properties only **
Borrower cannot own other real estate at time of closing

An FHA loan is provided by an FHA approved lender and backed by the Federal Housing Administration (FHA). FHA loans are designed for low to moderate income borrowers who are unable to make a large down payment. An FHA loan is an attractive alternative to borrowers because it has less stringent credit and income requirements than those of conventional loans.

Program Highlights:

• 3.5% Down Payment Monthly
• Mortgage Insurance Required
• $271,050 Maximum Loan Amount
• Qualified properties: Single Family, 1 to 4 units
• 6% Limit on Seller Concessions
• No Financial Reserves Required For 1 Unit Properties
• Not Limited to First Time Homebuyers
• Down Payment Can Be Gifted

A UKDA loan provides many options for borrowers. This type of loan reduces costs for homebuyers in rural and suburban areas. It is one of the most cost-effective loan pro-grams that exists in today’s marketplace. UKDA home loans are available to borrowers who meet income and credit standards. The most important requirement of a UKDA loan is that the property must be located in a USDA-eligible geographic area.

Program Highlights:

• 100% Financing
• Annual Guaranty Fee Paid Monthly
• $ 417,000 Maximum Loan Amount
• Properties Limited to 1 Unit, Non-Farm, Primary Residences
• 6% Limit on Seller Concessions
• No Financial Reserves Required For 1 Unit Properties
• 102% Maximum Loan-To-Value*
• Closing Costs Can Be Financed

You Served Your Country With Honor. Let the VA Loan Program Honor Your Service.

Backed by the Department of Veterans Affairs, VA loans are designed to help qualified veterans, reservists and active duty members finance their homes.

Program Highlights:

• 100% Financing 
• No Monthly Mortgage Insurance Premiums
• Not Limited to First Time Home buyers
• 4% Seller Concessions