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Why choose the Macquarie Asset Manager? The Macquarie Asset Manager combines an interest-only (first ten years), variable rate loan with a line of credit to provide maximum flexibility and control over both the monthly payment and the equity. Interest-only payments improve the borrower’s cash flow by reducing the required monthly payment. Interest-only payments allow borrowers the flexibility to make principal payments that suit their lifestyle. Under a traditional home loan, borrowers can only access their home’s equity by taking out a second mortgage. With a line of credit, they can access their home’s equity any time they need it. All they have to do is write a check. Why is the Macquarie Asset Manager a variable-rate loan? The Macquarie Asset Manager is actually a line of credit, which allows the borrower to borrow up to their limit and repay as they choose (as long as they meet their minimum monthly obligations). Like most lines of credit, the interest rate varies with the market. What happens after the interest-only period? Interest-only payments are for the first ten years. After this the loan limit will begin to decrease at 1/240th per month and borrowers may have to make principal payments to comply with it. How that will affect their monthly balance depends on their loan balance in relation to their credit limit at that time. Here’s what actually happens: After the first ten years, the credit line will be reduced each month by 1/240th (the number of months left on the loan at the end of the 10-year interest-only period). If the balance is higher than each month’s new credit limit, the borrower must pay the difference in addition to the interest. But, if they have paid ahead on their loan balance, they will continue to pay interest-only payments until their credit limit reaches their balance. Can additional payments be made toward the principal? Absolutely. In fact, the Macquarie Asset Manager makes it possible to pay down the loan balance much faster than traditional loans. Why is there no escrow for taxes and insurance? When the borrower’s money is sitting in escrow, someone else is earning interest on it. With the Macquarie Asset Manager, the borrower simply pays their taxes and insurance when they’re due, just as they would any other bill. The borrower also has the option of making extra payments to their mortgage in an amount equivalent to the monthly taxes and insurance. This gives them the benefit of reducing their principal balance (and thereby reducing their interest payments) until the taxes and insurance come due, at which time they can draw the funds from their mortgage to pay them (assuming there is sufficient credit available). What index is it based on? Choose between two indexes – Prime or 1 Month LIBOR. The borrower chooses which index they want when the loan is submitted and it cannot be changed once the loan has closed. Can a borrower switch from one index to the other? No. To change their index, the borrower will need to refinance the loan and choose the other index. Is the Macquarie Mortgage Xpress program available? Yes, the Macquarie Mortgage Xpress is a reduced documentation program available for borrowers with a 740 minimum credit score and solid mortgage payment history. Borrowers are not required to provide income or asset disclosure or verification. When is the interest rate set? The initial interest rate is based on the index selected by the borrowers as listed in the applicable Macquarie Mortgages USA Inc. rate sheet, plus or minus a margin. Thereafter, the Prime based index for each month is based on the highest Prime Rate as published in the Wall Street Journal. The LIBOR based index for each month will be set on the first business day of each month as published in the Wall Street Journal, and will apply to the entire billing period. The margin will vary based on many factors; including the index that is chosen, the LTV, the borrowers’ credit scores, and other loan attributes. Please refer to the Macquarie Mortgages USA Inc. rate sheet for specific margin information. How is the payment calculated? Monthly payments are calculated as follows: Average daily balance for the month For example: $100,000 x 6.60% = $6,600 Monthly payments on all Macquarie Mortgages USA Inc.'s loans are due the 15th of each month, and cover the billing period for the prior month. The first and last payments on each loan will be pro-rated accordingly. The minimum monthly payment is the interest calculated on the average daily loan balance during the previous month. Because direct withdrawal of the monthly payment reduces costs and helps keep fees low, Macquarie Mortgages USA Inc.’s pricing assumes this payment method. If a borrower wants to make monthly payments by any other method (e.g. check) additional charges will be applied. Why does Macquarie Mortgages USA Inc. pay the mortgage insurance? Mortgage insurance protects the lender, not the borrower. At Macquarie Mortgages USA Inc., we just think it’s fair that we pay those premiums. Is there a fee for closing the credit line early? Yes, there is a fee whenever allowed by state law, which in most cases is a three-year early termination fee. In most states these fees are based on the credit line amount at the time the line is closed. There is also an option available which has no early termination fee, but it includes a higher interest rate and a limited YSP to the broker. The annual fee, when allowed by state law, is payable following the first 12 months of the loan and consists of two $30.00 payments each year – one in March, and one in September. Are transaction fees charged for credit line advances? No, there are no transaction fees charged to the borrower – they can take as many advances against their credit line as they want, as long as they have sufficient available credit. |
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