Option Arm

1
Majestic Mortgage Company
Presents
The Option ARM
Click each frame to move forward more quickly
2
What is the Option ARM?

• A monthly adjustable rate mortgage
• Based on an MTA or COFI index
• Four Flexible monthly payment options

Home
Majestic Mortgage Company [phone]
3
What is MTA?

• The index is the 12 - month average of annual
  yields on actively traded U.S. Treasury
  Securities adjusted to a constant maturity of 1
  year

Majestic Mortgage Company [phone]
Home
4
Because the MTA is an average...

• Higher yields are offset by lower yields on a
  monthly basis throughout the year
• It creates an index which is less volatile
• Interest rate increases take longer to affect MTA
  than other ARM indices

Majestic Mortgage Company [phone]
Home
5
Types of Option ARMs4 monthly payment options
available on loan programs!

• 1 Month MTA 1.00 start rate fixed for one
  month
• 1.00 minimum payment rate fixed for one year
• 3 Month MTA 2.0 start rate fixed for three
  months 2.0 minimum payment rate fixed for one
  year
• start rate and margin differ on COFI index
  products, check with one of our Loan Officers for
  details on the various COFI products.

Majestic Mortgage Company [phone]
Home
6
Financial FlexibilityFour monthly payment
options

• Minimum payment
• Interest only payment
• Fully amortized 30 year payment or a 40 year
  payment
• Fully amortized 15 year payment
• We offer our borrowers a financial planning tool
  that can be managed on a monthly basis!

Home
Majestic Mortgage Company [phone]
7
PurchaseMTA Index 3.326Margin
2.75Fully Indexed 6.076
The 1 Month MTA
Example of a 400,000 Loan Compare to a 30 year
fixed at 6.875 2,627.72

• Min. payment amortizing at 1.00
• 6.076 Interest-only payment
• 6.076 amortizing at 15-years
• 6.076 amortizing at 30-years
• Margin reduced by 20 bps for purchase loans

• Option 1 1,286.56
• Option 2 2,025.34
• Option 3 3.391.87
• Option 4 2,417.78
• Note Interest only (option 2) will not be an
  option if it is less than the minimum payment.

Majestic Mortgage Company [phone]
Home
8
Dont Touch that MTA!!!

• - One of the attributes of our Option ARMs that
  distinguishes it from competing products is an
  index that changes a little bit every month.
• - Our MTA Option ARM rate changes every month to
  the 12-month moving AVERAGE of that same 1-year
  CMT. Its like having 1/12 of your loan re-price
  every month. The rate changes are smoothed out
  over the year, rather than the abrupt and
  volatile change of a 1-year CMT ARM.

Home
Majestic Mortgage Company [phone]
9
The 1 Month MTA is convenient for

• Borrowers with consumer debt
• Earlier payoff higher interest rate debt on
  credit cards.
• Self Employed/Commissioned Borrowers
• Fluctuating monthly income need not affect ones
  lifestyle. As income fluctuates from month to
  month, the borrower gets to make up any deferred
  interest while maximizing his money.
• Resident Doctors / Start-up Professionals
• More home buying power based on future
  income/earnings

Majestic Mortgage Company [phone]
Home
10
Also good for

• First time homebuyers
• Qualify _at_ 6.0 up to 95 LTV
• (Advantage 90 max LTV 89.9 with no mortgage
  insurance)
• Move up buyers
• Avoid payment shock-choose to pay _at_ 1.00
  and buy more of a house
• (bigger yard, better school, pool, etc).
• Multi-family
• Lose a tenant, still pay _at_ 2.85 with
  minimal deferred interest

Home
Majestic Mortgage Company [phone]
11
Option ARM Product Features

• 15 , 30 , and 40 year terms
• Streamline your loan up to 90 or 95
• All occupancy types
• Purchase, refinance, and cash-out refinance
• Low Doc - Stated Income / Stated Asset

Home
Majestic Mortgage Company [phone]
12
Flex 3 Flex 5

• The Flex 3 Flex 5 products are Intermediate
  Option ARMs with an Option ARM feature tied to
  the 12-MTA index after the initial fixed period
  of 3 or 5 years depending on product selected.
  The initial interest rate and payment remains
  fixed for 36 or 60 months.

Home
Majestic Mortgage Company [phone]
13
Flex 3 Flex 5

• 1- 4 unit and condos
• 95 LTV to 400,000
• 80 LTV to 650,000
• Loan amounts to 7 million
• Low Doc options available
• Advantage 90 program available.

Home
Majestic Mortgage Company [phone]
14
Whos It Good For?

• All types of Borrowers
• Commissioned sales people
• Self-employed borrowers / Entrepreneurs
• Salaried borrowers
• Retirees
• Trust Income
• Interest Dividend Income
• Alimony child support

Majestic Mortgage Company [phone]
Home
15
Portfolio ARMSBenefits to you

• Loans to 7 million
• No cash out limitations
• Reduced documentation
• Faster processing time
• No price adjustments for cash out for ARM
  products

Home
Majestic Mortgage Company [phone]
16
Foreign Nationals Benefit Too!

• No Social Security number
• No Alien Registration card
• No income verification
• No add on 70 LTV Purchase (2nd home)
• 75 LTV maximum (primary or 2nd home exception)

Home
Majestic Mortgage Company [phone]
17
Foreign National GuidelinesLow Doc

• No credit in U.S.A. two credit references from
  previous country
• Income from foreign country letter from
  accountant or bank (to strengthen file when
  asking for exception)
• Appropriate Visa and Passport

Home
Majestic Mortgage Company [phone]
18
Gifts Low Doc

• Single family primary residence
• Fixed ARMs 75 LTV - all gift
• Portfolio ARMs 80 LTV - 10 borrower funds -
  10 gift
• Not available for
• Second homes
• Investors
• 2 or more units
• gift may be gift of equity

Majestic Mortgage Company [phone]
Home
19
EXCEPTIONS TO POLICY

• LTV or loan amount exceptions may be granted to
  EXCEPTIONAL borrowers.
• There may be a Cost for exceptions.
• Assets MUST be verified on all loans which
  require an exception.

Home
Majestic Mortgage Company [phone]
20
THANK YOU!
Majestic Mortgage Company
Home