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Loan Programs
The Monthly Treasury Average Loan (12-MTA)
This loan is based on average annual yields on U.S. Treasury Securities adjusted to a constant maturity of one year, as made available by the Federal Reserve. MTA home mortgage loans use the 12-Month Treasury Average Index. Adding together the Monthly Yields for the most recently available (12) months and dividing by twelve (12) determine the Twelve Month Average.
Historically, MTA home mortgage loans have not exhibited sharp interest rate increases such as those that occurred in the late 1980s. Additionally, unlike more volatile indices, the 12-MTA has never increased more than .25% in any month for over a decade.
Our Loan Officers can properly explain the differences between the MTA home loan and other types of loans to help you decide which loan would be best for your situation. By becoming an informed homebuyer as to which decision you make, the MTA loan program maybe the best loan that suit your need and may also save you thousands of dollars down the road.
MTA vs. Other Arm Mortgage Indices
The MTA is a very slow moving index and is nearly as stable as the world's most stable index (COSI-Cost of Saving s Index). The MTA adjustable mortgage loans generally have better margins that are fixed through the lifetime of the mortgage. Payment rates can range from 1% to 1.95% for the MTA ARMS. Because the MTA is an average annual yields on U.S. Treasury Securities there is an inherent "lag" in the index, which ultimately causes the index to move very slowly. Again, in any given month the index has never raised over .25% for the last decade.
MTA home mortgage loans have several advantages. Flexibility in the monthly payment: It is one of the main advantages of MTA ARMs. With MTA adjustable home mortgage loans you will have a choice of monthly payment options. You have the ability to change payment options each month.
1. Full principle and interest
2. Minimum payment options - This payment option can range 1% to 1.95%
3. Interest only payment option
4. 15 year amortization payment option
It's very important to point out that all MTA mortgage loans have a 5-year payment recast. A payment recast is when the lender calculates the payment necessary to repay the loan over the remaining 25 years. By adding any and all deferred interest, also called negative amortization, to the remaining loan balance and amortizing the payment over the remaining 25 years.
For example, A loan starts at $200,000 with a payment of $643. After 5 years there has been $15,000 in deferred interest, your new loan will be $215,000 at the then current rate, amortized over the remaining 25 years. If rates were at 6.75% or higher, after year five, your new payment would be $1,485, or higher. North Atlantic Mortgage Corporation offers Option Arm loan programs that do not recast have a 10-year recast. Please contact North Atlantic Mortgage Corporation to determine if one of our many Option Arm loan programs is right for your mortgage needs.
Why Consider an MTA Arm Mortgage Loan?
There are many reasons a homebuyer may consider an MTA Arm home loan. Each reason may be unique to the homebuyer. In the past North Atlantic Mortgage Corporation has recommended varying low payment option ARM's for:
· First Time Home Buyers: This is a great loan for First Time Home Buyers that can afford the higher payment of a 30 year fixed, but want to "grow into" the mortgage payments over time.
· Debt Reduction: Monthly savings can be invested or used to pay off credit cards or to start or augment your savings and investments.
· Asset Accumulation: It is a good mortgage if you have a need to accumulate more assets, or the need to fund retirement accounts (higher return on your investments).
· Self Employed Home Buyers: The MTA is a good fit for homebuyers who own their own business, have a fluctuating income, or live on commission.
· Jumbo Home Buyers: (over $500k in value).
· Flexibility in your monthly payment - you will have a monthly choice of payment options.
· Financial Savvy Home Buyers: The MTA ARM provides more opportunities for financially savvy borrowers who seek more customized and ultimately less costly home-finance choices.
100% MTA Loans
North Atlantic Mortgage Corporation now offers 100% or no money down MTA loans, up to 1.4 million. This 80/20 MTA combo loan is available for a home purchase or a current mortgage refinance. Interest only seconds and HELOC’S (Home Equity Line of Credit) are available! Each month you can chose between the minimums payments, interest only payment, 30 year fixed payment and 15 year fixed payment.
North Atlantic Mortgage Corporation offers other MTA loan options as well, such as 1 month, 3 month and 5 year fixed payment. 40-year amortizations are also available.
If you have questions just ask! Contact North Atlantic Mortgage Corporation @ 800-637-2424 or you can start now by filling out our secure online application.
For more information or to see if you qualify for this loan please contact your North Atlantic Mortgage Corporation loan officer. | | |
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