With current interest rates in Florida centering below and around five percent, many home buyers are considering the purchase of a new home, or refinancing their current home.  Larger home loan amounts are known as a Florida Jumbo Mortgage, and EZZ Florida mortgage brokers are prepared to help you get the loan you need to move into or keep the home of your dreams. 

Home loan amounts over $417,000 would be considered a Florida Jumbo Mortgage.  Although interest rates were higher in the past, preventing people from jumping into a large home loan, with the fact that interest rates have finally come down to a respectable rate level makes it much easier for them to embark on a Florida Jumbo Mortgage loan or a Jumbo refinance. 

Current interest rates for a Florida Jumbo Mortgage are in the five percent range.  Prior to this time, interest rates for jumbo loans skyrocketed beyond the value in mortgage financing, but with the drop in interest rates, credit is now finally easing up, and thus now is a great time to purchase a new home with a Florida Jumbo Mortgage or refinance Jumbo loans that you have.

Refinancing jumbo loans will save you a great deal of money over the life of the loan.  By dropping even fractions of a percentage point in terms of the interest rate charge for the Jumbo Mortgage, you will save not only on each monthly payment but also overall on the amount of interest charged for the Jumbo refinance.

EZZ mortgage brokers offer all types of jumbo refinance loans and home loans for your consideration.  With a refinance, you can also consolidate your debt or take out equity cash for projects around the home or other purposes.  Our mortgage brokers can explain all aspects of the Jumbo loan, and help you determine which loan is right for you.  We take our job seriously, which is to bring you the lowest interest rates and closing costs possible, and we do so with honesty and competence.  Contact one of our EZZ mortgage brokers today to learn more about the Florida Jumbo Mortgage and how it can work for you.

In simplest terms a 5/1 ARM (Adjustable Rate Mortgage) is a mortgage loan which will have a fixed rate of interest for the first five years, then the rate of interest will change every year thereafter for the remaining life of the loan.  Also note, most ARM loans can be interest only or amortizing.

The trick in understanding the 5/1 ARM however is not the rate of interest for the first five years, this will be clearly disclosed to the borrower at the front end.  The important thing to know about this type loan is what happens to your interest rate after the first five years.  In other words, how will future rate change calculations be made, what are the limits, if any and how much can my payments increase in the future? 

Key terms and calculations for these types of loans can vary widely.  Let’s begin by understanding the basic concepts embedded within all ARM’s:

The four key concepts along with an understanding of key terms for ARM’s are described below:

First key concept:  (Future Adjustment Calculations):  All ARM loans will have a predetermined financial Index and a predetermined Margin.  

                What is an Index:  For our purposes it is a “Reference Point” against which measurements are taken for making future adjustments.  Examples of Indices: Wall Street Journal prime, Federal discount rate, Fed funds rate, 10 year treasury rate or a host of many others.  Lenders are required to identify an index to be used in your interest rate calculations which you the borrower can readily have access to.  The most widely used index used in the 5/1 ARM is the one-year treasury security index.  The reason this is the most popular index is because it assists the lender in predicting their future annualized cost of funds (A this topic for another article).  The important things to know about the index is how to find the current value and it is constantly changing. 

                What is a margin: To keep it most simple for our short discussion, the margin is an arbitrary numerical value which is added to your index in order to calculate your future interest rate changes.  Your margin is set at the beginning of the loan and then remains the same for the life of the loan. 

For example purposes:  Say your lender had chosen a margin of 2.75% for the life of your loan.  To calculate your interest rate for the next period we would simply add the margin to the current index.  Say your current index was 2.87%, adding the two together would be your new rate of interest until the next change period ( 5.62%).  Many times for simplicity the lender will round to the nearest .125%.

The second key concept to understand about ARM loans is the frequency of your interest rate changes after the initial fixed rate period.  In the case of the 5/1 ARM we have already discussed that your rate of interest will change every year after the initial fixed rate period.  This of course would be different if your local lender wanted to offer you a 5 Year ARM, which would imply that the interest rate only changed every five years.

The third key concept is whether or not your loan has periodic interest rate caps.  In other words, how much can your interest increase at any given change date?  Also embedded in this concept is “Life of Loan Cap”.  In other words, is there a life time maximum interest rate?  This information is also required to be disclosed to you.  Common among 5/1 ARM terms, maximum interest rate increases are 2% annual and 5% maximum increase over the life of your loan.

 So with all this unknown jargon and complexity why would someone want a 5/1 ARM over a 30 year fixed rate mortgage?  Usually the 5/1 will always offer a lower mortgage rates compared to the 30 year fixed mortgage rate.   If you are planning on selling within 5 years start counting your savings.

The 30 Year fixed rate mortgage is by far our most popular product for many reasons.  The 30 Year Fixed Rate mortgage offers many options for borrowers to meet their financial goals with long term payments, low interest rates, and more flexibility between lenders.

A 30 Year Fixed Rate mortgage offers predictability unlike mortgage ARM’S.  Generally people in Florida that plan to stay in the home more than 5 years will choose a 30 Year Mortgage rate.  If you decide on a 30 year fixed rate mortgage in Florida and choose to have EZZ Financial for your mortgage company you will have the ease of knowing you are working with a reputable Florida Mortgage Company, we have the lowest rates on 30 year mortgages, and our staff is eager to assist you along the way.

Although the 30 year mortgage rates are slightly higher than our low 15 year mortgage rates it still is beneficial when you are comparing the actual mortgage payment.  Compare 30 Year Fixed Rate mortgage vs. 15 Year Fixed Rate Mortgage.

We strive to meet everyone’s financial goals, but we also like to educate and make people aware of the mortgage payment on a 15 year mortgage term vs. 30 year mortgage term.  Both fixed rate products offer low mortgage rates, but there are obligations associated with both.  When you take a shorter term mortgage rate like the 15 Year Mortgage vs. the 30 year mortgage you are locking yourself into a much higher mortgage payment for 15 years and the only way to reduce your payment back to a 30 year term is to refinance.  With every refinance there are costs associated with it so choose wisely!.  Please make sure you are comfortable with either the 30 year fixed rate mortgage or the 15 year mortgage payment. 

We are glad you are here visiting our mortgage website and it will be most enjoyable helping you achieve your mortgage financial goals together.  Please call with any questions or concerns you may have regarding your 30 year fixed rate mortgage.

To apply for a 30 Year Fixed Rate Mortgage with the lowest mortgage rates on the web – please fill out the form below.

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