Residential 5/5 Adjustable Rate Mortgage (ARM)A 5/5 adjustable rate mortgage has an initial rate for the first five years and rate adjustments after that once every five years. This allows your payments to rise and fall with the economy, while still allowing you the ability to plan your budget accordingly. All ARMs have caps on them, meaning that your interest rate can only increase by a certain percentage. Our ARM can only increase by up to five percent. Many customers find that ARMs work to their advantage, offering lower interest rates in the short-term, allowing them time to earn more and plan accordingly moving forward.
Our Take on the Residential ARM
If you want peace of mind knowing that your monthly principal and interest payment will remain the same each month, then our 20-year fixed mortgage loan may be a good option for you.
In addition to locking in your interest rate for the life of the loan, a 20-year fixed mortgage loan can help you pay off your home faster and build equity more quickly than a traditional 30-year mortgage. This benefit makes the 20-year fixed mortgage a good option to consider if you are planning to buy a new home or refinance your existing mortgage loan.
At Shore United Bank, we offer a competitive interest rate of 3.5% with an Annual Percentage Rate (APR) of 3.556%2 for terms up to 20 years for your primary residence. The interest rate is slightly higher for secondary residences, which is currently 3.75% with an APR of 3.806%. The maximum loan to value for primary residences is 85% and secondary residences is 80%. Based on the loan amount borrowed, closing costs will vary and are due at the time of closing.
Construction to Permanent Loans
Whether you want to build a new home or make renovations to your existing home, consider a construction to permanent (CP) loan as a single, convenient loan option that will cover everything you need. This loan type consolidates your closing costs, saving you money in fees. It effectively transitions from a construction loan to a mortgage during the permanent or live-in stage of your home. This means that, as your home is being built, you pay interest only on the amount disbursed. But once you move in, you’ll be able to count on a monthly principal and interest mortgage payment plan.
Most construction loans require that you make two closing payments and separate fees for each type of loan: construction and permanent. Because the typical process for construction loans requires both loan types, you may not have the option of negotiating a locked – or max – mortgage rate upfront. This means that if rates go up during your construction, you may be stuck at the highest rate when you apply for a separate, permanent mortgage loan. Furthermore, construction can be expensive and rarely finishes under-budget. If your project has impacted your financial circumstances, you may find it hard to get approved for a mortgage loan after all is said and done.
Construction–Permanent Loans, The Shore United Bank Way
Home Equity Line of Credit
Convenience, control, and flexibility are just some of the benefits of a Home Equity Line of Credit (HELOC). From buying a car to building an addition or paying for college tuition, a HELOC puts you in control of your equity. With a variety of options for using this line of credit, you can truly take advantage of the line of credit as best suits your needs.
A HELOC is a flexible credit option because funds from a HELOC work like a credit card and are available for you to use as you choose. Unlike a one-time lump sum loan, a HELOC provides a revolving line of credit that you can access as you need to. As you pay off the principal, the amount paid goes back to your available credit line. However, because your home is offered as collateral, the interest rate for a HELOC is generally lower than credit card interest rates.
Shore United Bank HELOC
1Adjustable Rate Mortgage (ARM) rates are subject to change every five years during the term of the loan. For example, terms for a $250,000 5-year ARM amortized over 360 months for a single-family primary residence with a down payment of 20% or more would be an initial interest rate of 3.45% effective for 60 months with monthly payment for months 1 – 60 of $1,116.03. Beginning at month 61 and every five years thereafter interest rate would adjust. Based on the current (March 9, 2020) index rate of 3.400% plus a margin of 0.75% the interest rate for months 61 – 360 would be 4.125% and the monthly payment would be $1,198.62. The APR for this loan example would be 3.926%. Payments in this example do not include taxes or insurance. Your payment may be greater.
2The Annual Percentage Rate (APR) is based on the following examples. $250,000 loan for a single-family primary residence with a 20% down payment with an interest rate of 3.5% would result in 240 monthly payments of $1,450.28. $250,000 loan for a single-family secondary residence with 20% down payment with an interest rate of 3.75% would result in 240 monthly payments of $1,482.64. Payments do not include taxes or insurance. Your payment may be greater. Borrower must maintain insurance on the property securing credit.