The New York Mortgage Company Introduces Its 'Homeowner Protection ARM' With Ten-Year Cap of 6.99%
August 01 2006 - 12:45PM
PR Newswire (US)
First-of-Its-Kind Loan Protects Borrowers Against Interest Rate
Increases But Lets Them Benefit When Interest Rates Decline NEW
YORK, Aug. 1 /PRNewswire/ -- An adjustable rate mortgage with a
rate that can go up only slightly -- but can go down substantially?
The New York Mortgage Company, LLC has introduced just such a
revolutionary concept with an ARM loan that drastically limits
borrowers' interest rate risk while still allowing them to enjoy
the benefits of falling rates. Known as the Homeowner Protection
ARM, the new product is a 30-year loan that starts at 6.50% for
three months and has a 6.99% cap for the first ten years, with a
floor of 4.0%. The rate, pegged to the London Interbank Offered
Rate (LIBOR), is adjusted monthly and has a very low margin of 1.5
percentage points over LIBOR, which gives it a fully indexed
current rate today of only 6.875%. The APR is 7.182%. An optional
interest-only feature is available, at no additional cost, for the
first ten years, after which the mortgage becomes self-amortizing.
Unlike many interest-only mortgage loans available today, there is
no negative amortization. "This is the first monthly adjustable
rate mortgage that almost totally insulates the borrower from
interest rate risk for a period of ten years," says Steven Schnall,
president and chief executive of NYMC. "The ten-year rate cap on
this loan is only negligibly higher than the prevailing rates on a
ten-year ARM or 30-year fixed mortgage, yet unlike these other loan
programs, our rates will drop should market rates drop. The
advantage to the borrower is clear and unmistakable." Mr. Schnall
says the Homeowner Protection ARM, due to its extraordinarily low
ten-year cap, behaves in effect like a fixed-rate loan yet
eliminates the hassle and expense of refinancing when interest
rates fall. "It provides long- term protection against rising rates
along with automatic participation in falling rates; and there is
no negative amortization," he explains. "There is no other product
like it and everyone here is very excited about it." The Homeowner
Protection ARM is available immediately through all NYMC offices
around the country. The company's web site is http://www.nymc.com/.
NYMC, with more than $3 billion of annual loan volume, is a
subsidiary of New York Mortgage Trust, Inc., a real estate
investment trust that is celebrating the second anniversary of its
listing on the New York Stock Exchange (ticker NTR). NYMC is
licensed or authorized to do business in 45 states and the District
of Columbia, and plans are underway for additional expansion.
DATASOURCE: The New York Mortgage Company, LLC CONTACT: Bob
Rumerman, +1-212-499-6567, , or Kristin Olson, +1-212-499-6568, Web
site: http://www.nymc.com/
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