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Loan
Options
CHECK
OUT TODAY'S RATES
Fixed Rate Mortgage
The most common type of loan program.
The interest rate and the monthly payment for
principal and interest remain the same for the
loan term. This allows you to accurately predict
your monthly payments. Fixed-rate mortgages
are available for 10, 15, 20, 25 and 30 years.
Monthly payments consist of principal, interest,
taxes, and insurance and are designed to fully
amortize the loan over the term. Pinnacle's
fixed rate loans provide competitive interest
rates with a number of terms from which to choose.
Adjustable Rate Mortgage
Products (ARMs)
The interest rate on these loans
is fixed for a specified period of time and
then adjusts periodically for the remainder
of the loan. An example is a 10/1 ARM; the interest
rate is fixed for the first 10 years and then
is subject to annual rate adjustments for the
remaining 20 years. The adjustments are based
on a pre-selected index. The most common indices
are US Treasury securities, London Interbank
Offered Rate Index (LIBOR) and Cost of Funds
Index (COFI).
Due to the increased risk assumed
by the borrower (the possible increase in the
interest rate), the lender generally offers
a lower interest rate for the initial period.
In some cases this can help applicants to qualify
for a larger loan amount or to save money during
the initial period compared to a fixed rate
loan. Pinnacle's ARM products include:
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1/1 ARM (30 years) The interest
rate is subject to adjustment annually.
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5/1 ARM (30 years) The interest
rate is fixed for the first five years and
is then subject to adjustment annually.
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7/1 ARM (30 years) The interest
rate is fixed for the first seven years
and is then subject to adjustment annually.
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10/1 ARM (30 years) The
interest rate is fixed for the first ten
years and is then subject to adjustment
annually.
In all cases, the principal is
amortized over a 30-year period.
Balloon Mortgage
A balloon mortgage loan has a
short term, typically 5 or 7 years, at the end
of which the remaining principal balance is
to be paid in a lump sum. Monthly principal
payments during the term are calculated based
on a 30-year term. The borrower may decide at
the end of the term to refinance the remaining
balance with a new mortgage. A 5/25 or a 7/23
convertible loan program provides the option
to convert the balloon mortgage after the initial
term to a fixed rate mortgage at the prevailing
interest rate at the time of conversion.
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