...a new feature offered on many of our mortgage loans.
What is the HarmonyLoan™ feature?
The HarmonyLoan™ feature of your new mortgage gives you greater economic security--you can initiate interest rate changes at the “click” of your mouse. In other words, after closing on your mortgage, if interest rates fall, you simply log in to a special website and “click” a button to lower your rate without going through a painful, costly refinance. What can be better than that? No New Points! No New Closing Costs!! No Kidding!!! This is a special feature of several of our Adjustable Rate Mortgages (ARMs) and Fixed Rate Mortgages. Check with us to see which products offer this feature.
- You must wait 6 months after closing on your mortgage before the first opportunity to lower your rate.
- After the initial 6 months you can lower your rate as often as every 120 days.
- Your loan must be current with NO late payments in the past 12 months.
- To lower your rate, the new rate must reduce your current rate by at least .25%.
Do you need to re-qualify to reset the rate with the HarmonyLoan™ feature?
No! There is no new appraisal, no underwriting, no credit check, no additional paperwork and no closing to attend!!
Will my loan term start over again?
No. When you “click” to lower your interest rate using the HarmonyLoan™ feature your remaining term stays the same. For example, if you “click” the button after 36 mortgage payments on a thirty year amortized loan you will still only have 27 years left on your mortgage.
Will my principal balance ever increase?
No, since there are no closing costs associated with the HarmonyLoan™ feature your principal will decrease with normal monthly mortgage payments.
ADJUSTABLE RATE MORTGAGES:
How does this work if I have an Adjustable Rate Mortgage (ARM)?
When you originated your loan you may have selected a mortgage where you have a fixed rate for a period of time and then your rate may change annually. For example, if you chose a 5/1 ARM, this means your rate is fixed for 5 years and at the end of 5 years your rate may change annually thereafter. This is an Adjustable Rate Mortgage, more commonly referred to as an ARM. If you take advantage of the HarmonyLoan™ feature on your ARM, you receive a new fixed period with a new interest rate. For example, if you have a 5/1 ARM and after 3 years you “click” to change your rate you will receive a new fixed rate for another 5 years. After 120 days you can still “click” again if the rates change.
Why would you “click” to reset to a higher interest rate on an ARM?
If you have an ARM that is nearing the end of the fixed rate period, for example you are in your 4th year of a 5/1 ARM, you may want to “click” the button at a higher rate to lock in another five year fixed period. Remember, if rates fall during the new 5 year fixed rate period you can always “click” the button again and lower the rate. However, if you never “click” to change your rate during your initial fixed rate period you will lose this feature at the end of that initial five year period.
Can you reset your interest rate below the interest rate “floor”?
Yes. The interest rate “floor” pertains to the adjustment at end of the fixed rate period, not the HarmonyLoan™ feature. If the interest rate falls below the interest rate floor, you can reset the fixed rate period of your loan at the prevailing reset interest rate even if it is lower than the interest rate floor.
FIXED RATE MORTGAGES
For the eligible fixed rate mortgages the interest rate upon each “click” can only go down and never back up. You have this feature throughout the entire term of the fixed rate loan.