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Cost of Funds Chart

Want to lower your monthly payment AND increase your home’s equity? Then, we’ve got a solution for you. Unlike other mortgage loans, the Equity Builder Mortgage is an Adjustable Rate Mortgage (ARM) product designed to offer an affordable monthly payment, while also offering numerous benefits over traditional mortgage loans. The rate can adjust and does so according to the term of the loan (e.g. a 1/1 ARM has a fixed rate for one year then can increase or decrease each year thereafter). What’s great about the Equity Builder is that when we adjust the interest rate, we do it based on an internal index (our Cost of Funds*) that is not subject to the changes in the short term-interest rates that normally affect the mortgage industry.

Adjustable Rate Mortgage (ARM) Comparisons**


Equity Builder ARM Loan
Typical Industry ARM Loans
Index
Historically stable internal cost of funds.
Volatile standard industry indexes
(LIBOR, CMT).
Adjustment Period
1/1, 3/3, 5/5
1/1, 3/1, 5/1
Private Mortgage
Insurance

Not required up to 95% LTV
Required over 80% LTV
Interest-Only Option (Only available on 1/1 ARM product, full term = 20 years)
Full-term interest-only up to 75% LTV. Rate caps of 1.00% at the time of each adjustment and 6.00% over the life of the loan.
Converts to principal and interest payments after introductory period expires.
Loan Servicing
In-house servicing
Lender typically makes and sell the loans immediately; may make loan payments to several different lenders over the life of the loan.
Monthly Payment
(Approximate)
($350,000 1/1ARM)
$1,475.61
(3.000%/3.043% APR)

$1,498.36
(3.125%/3.964% APR)

For more information, contact Jermaine Medley or Alieu Jallow and be sure to ask about our no-closing cost options!***

Jermaine Medley
(240) 747-2471 | jmedley@lfcu.org


Alieu Jallow
(240) 292-5367 | ajallow@lfcu.org


*The Credit Union’s Cost of Funds is a weighted average of the dividends paid on accounts held at Lafayette Federal and the cost of any money the Credit Union has borrowed. It is calculated monthly and the actual figure is rounded up to the nearest quarter percent for calculation purposes. **APR = Annual Percentage Rate. 3.043% APR quoted is based on a 1-year ARM loan with a maximum LTV of 80%, minimum 700 credit score, applicant with qualified direct deposit and Lafayette Federal checking account, owner-occupied property and a loan amount of up to $417,500. The Equity Builder loan uses the Credit Union’s cost of funds as its index and the interest rate cannot go up or down more than 1% per adjustment for the 1/1 ARM product and 2% for the 3/3 ARM and 5/5 ARM. Escrow for taxes and insurance is required. Borrowers must meet eligibility requirements to join the credit union. Not all applicants will qualify. Other program terms available. Rate can be affected by other terms and pricing. This offer is subject to change and can be discontinued without notice. Payment shown does not include property taxes and required insurance. In the example shown, monthly payments can increase or decrease every 12 months. The maximum rate for months 13-24 is 4.000% with payments estimated at $1,665.40. The maximum rate over life of the loan (360 months) at 9.000% with payments estimated at $2,688.63. Sample industry payment is for a TD Bank 1/1 ARM with 0.00% discount points. ***Excludes prepaids, e.g. escrow and prepaid interest, discount points, or any portion of the down payment. Borrower can take advantage of only one (1) closing costs option per loan. HELOCs and 2nd trust mortgages excluded from the no closing cost option. Must be eligible for membership. $50 minimum balance required to open and earn 0.10% APY**** on LFCU share savings account balances. $5 minimum balance required to open and earn 0.025% APY**** on LFCU checking account balances. ****APY=Annual Percentage Yield. Rates current as of 8/1/17. NMLS #740025 and 189814.
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