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FAQ

  1. What is an ARM or Adjustable Rate Mortgage?
  2. What are points?
  3. What is the advantage of a longer-term fixed rate loan?
  4. What is the advantage of a shorter-term fixed rate?
  5. What is the advantage of an ARM loan?
  6. What terms are available for ARM loans?
  7. How do I "Lock-In" my rate?
  8. What is a Jumbo loan?
  9. I am retired and not working. Can I qualify for a loan?
  10. I do not wish to provide my income documentation. Can I qualify for a loan without showing my income or assets?

What is an ARM or Adjustable Rate Mortgage?

An ARM loan is a mortgage that has a Fixed Rate for a pre-determined period of time, then adjusts according to market conditions. The rate will then adjusts periodically, usually every 12 months. These loans do have a 30 year payback period.

What are points?

Points are what is paid to a lender at time of closing in exchange for a lower interest rate on a loan. This is considered a pre-paid finance charge. This charge may be tax deductible. For confirmation, please check with your financial advisor or accountant.

What is the advantage of a longer-term fixed rate loan?

The obvious advantage is that by stretching out the payback period over a longer time period, your monthly payments will be lower. For example: a loan on a 30 year term will have a lower monthly payment than the same loan amount on a 15 year term.

What is the advantage of a shorter-term fixed rate?

The shorter you payback period, the less the loan will cost you. By paying a higher monthly note for a shorter time, you may save a substantial amount of interest paid on the loan. Also, you will develop equity in your home faster this way.

What is the advantage of an ARM loan?

An ARM loan may be a good option for someone who wants to refinance the current mortgage on the home but is planning to move in a few years. You may get a lower initial interest rate than if you were to select a fixed term and pay less interest in the meantime.

What terms are available for ARM loans?

ARM have various initial fixed time periods. You may find fixed terms for 1, 3, 5 and 7 years.

How do I "Lock-In" my rate?

Please call your American Fidelity professional to request your rate to be locked. Lock terms available are for 15, 30, 45, 60 days. In some cases you may qualify for a rate lock period of up to 270 days. (*Please note that the longer lock periods may require price adjustments on your loan.)

What is a Jumbo loan?

A Jumbo loan is a loan that exceeds the loan amount requirements for conforming loans. That loan limit is $300,700. Pricing for Jumbo loans are different than conforming loans.

I am retired and not working. Can I qualify for a loan?

Yes. You may still qualify for a loan as long as you can verify your pension or social security income. You will still have to be qualified on your debt to income ratios.

I do not wish to provide my income documentation. Can I qualify for a loan without showing my income or assets?

Yes. American Fidelity has several programs available to qualified borrowers that do not wish to show their income or assets, or both. Please let your AFI loan professional you wish this type of loan while beginning the loan process. (Price adjustments may apply to this option.)

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