We have received a huge influx of ARM submissions since introducing this product. Many are taking advantage of the 4% rate. Streamlines are a large percentage of the closings as well as purchases. Having the option to qualify a borrower at 4% is HUGE. This opens back up the potential for you to generate a ton of streamlines right now as well as stimulate Realtor referral business. I wanted to make sure everyone fully understands the potential you have to write more loans with this ARM product.
1. The Caps are very conservative (1/1/5)
a. 2% Margin on the 1 Yr Treasury (currently approximately 0.5%)
b. With a Start Rate of 4% the Highest your borrowers rate could be in 5 years would be 6%
2. It can be streamlined to a Fixed at anytime
a. At the end of the 3 years there will be enough paid down on the loan to streamline without an appraisal with no cash to close
b. The fact that you can streamline without an appraisal makes the borrower’s home value irrelevant
c. Streamlining from an ARM to Fixed is a benefit in itself and the payment does not have to decrease
d. With any streamline there will be no income or credit qualifying
3. There is a tremendous opportunity right now for you to streamline your clients you put in an FHA loan at 5-6% over the past few years
a. Not only will your borrowers save money each month but will pay down their principal faster just based on the rate
4. Realtors are loving this product!
a. We have seen a spike in purchase loans submitted and closed as ARMs
b. Use this as a tool to gain more referral business
1. Ratios must be within 31/43 (does not apply to streamlines)
2. The borrower is qualified off the start rate
THERE IS A HUGE MARKET FOR THIS ARM PRODUCT RIGHT NOW
IF YOU ARE NOT USING IT TO EXPAND YOUR BUSINESS YOU ARE MISSING THE BOAT
Please do not hesitate to contact me if you have any questions
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