The Power Option Mortgage Loan

This dynamic mortgage product offers our clients the opportunity and flexibility to strategically manage their cash flow by offering four monthly mortgage home loan payment options. As you know, traditional mortgages such as a 15, or 30 year fixed rate mortgages, offer a single payment choice that consists of principal plus interest. After your lender deducts the interest portion due, the principal is then invested by the lender, with no benefit to you.

With The Power Option Mortgage Loan you have the option to select the payment method that best suits your financial situation every month. Thus, it gives you control over your monthly mortgage loan payment.

The Power Option Mortgage Loan gives you the flexibility to decide whether you would like to match your monthly mortgage loan payments to your variable or seasonal income, or whether you would like to put more money into a business, investments, or large expenses like college tuition.

In essence, it gives you control over how you pay your mortgage payments so you can do what makes sense - for you.

• Power Option Mortgage Loan Payment One - A 15 year fully amortizing payment, which allows you to accumulate equity in your home at a faster rate. This would obviously create a quicker payoff and save a substantial amount of interest over time.
• Power Option Mortgage Loan Payment Two - A 30 year fully amortizing payment, which allows you to pay your loan off in a 30 year timeframe as most families are accustomed to, yet take advantage of fluctuations in the lending market with the Adjustable Interest Rate nature of the program.
• Power Option Mortgage Loan Payment Three - An interest only payment which allows you to take full advantage of the potential tax savings from a 30 year mortgage while investing or utilizing the principal portion for retirement planning, college planning, debt consolidation or any number of other needs that may arise.
• Power Option Mortgage Loan Payment Four - The minimum monthly mortgage payment option, has a low start interest rate (currently 1.95% depending your LTV loan to value). This option not only maximizes cash flow giving you more cash each month for other expenses, but also defers payment of interest on your mortgage loan. This may allow you greater flexibility in managing your tax deductions*

The four mortgage loan payment options let you decide every month how to tailor your mortgage loan payments to achieve your short and long-term financial goals.

How does it work?
Every month, you will receive a monthly mortgage loan payment coupon offering you the four mortgage loan payment options discussed above.

The following example illustrates these four mortgage loan payment options available for a $400,000.00 mortgage. The LIBOR Index was applied to this example with an indexed rate of 1.318% and a margin of 2.55%. Our fully indexed rate is 3.868% and the start rate on the minimum option is 1.95%. Payment due by 2/01/02. Minimum amount due: $1,468.50.

In addition to the information on the coupon, your monthly mortgage loan statement will also contain account activity that occurred since the last statement: i.e., beginning and ending balance amounts; previous payments; interest paid; current ARM interest rate; escrows/other, etc.

How Is The Interest Rate Determined?

The Power Option Mortgage Loan uses a monthly Adjustable Interest Rate concept to determine the actual rate of interest charged. In the above example we used London Interbank Offered Rate (LIBOR). A fixed amount of percentage points (the "Margin") is added to the index which when combined with the indexed rate, established the effective interest rate and as such the monthly mortgage payment.

As in the example above: Indexed Rate = 1.318% plus 2.55% margin = Fully Indexed Interest Rate 3.868%.

Who Should Choose The Power Option Mortgage Loan and Why?

Anyone who wants to take control of their monthly cash flow and financial future. As noted, "The Power Option Mortgage Loan" gives you the flexibility to decide whether you would like to match your mortgage loan payments to your variable or seasonal income or whether you would like to put more money into investments or toward large expenses. The choice is yours!...