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Adjustable-Rate Mortgage

Want to start with the lowest possible mortgage interest rate? Thinking of moving to a new home or refinancing your mortgage in a few years? Then you’ll want to know about all the advantages of an Adjustable Rate Mortgage from ESL.

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  • Features & Benefits

    With an Adjustable-Rate Mortgage (ARM), your interest rate changes periodically, based on market conditions and the current rate environment. 

    For many borrowers, that’s a big advantage because the initial interest rate will almost always be lower than with a fixed-rate mortgage.

    But that’s not the only benefit. With an ARM from ESL, you may be able to:

    • Qualify for a larger loan amount because your initial payments will be lower
    • Save money with a lower initial rate
    • Take advantage of a lower rate if interest rates decline
    • Protect yourself from big changes in monthly payments when interest rates are volatile, thanks to the automatic “rate caps” built into the mortgage

    ARMs are also a great option if you’re planning to own your home for a short period or you’re thinking of refinancing down the road.

    Learn More About Our Great ARM Options

    • We have three Adjustable-Rate Mortgage options to choose from.  The five-year, seven-year, and ten-year ARM products feature fixed-rate terms of five, seven, and ten years respectively. Payment adjustments for all products occur every 12 months after the fixed rate period.
    • Combine an ESL ARM with a Home Equity Solution to eliminate Private Mortgage Insurance, get “cash out” from your equity, or qualify for a 10% down payment + closing costs. Find out more about Mortgage + Home Equity Financing.

    Call 585.336.1502 or 800.352.6669, x1502, to speak with a helpful member of our Mortgage Team today.

     
  • Specifics

    Our adjustable rate mortgage is based on the LIBOR (London InterBank Offered Rate) index, with an initial fixed rate term of five, seven, or ten years. Rates and payments are adjusted every 12 months thereafter. The payment is based on a 30-year term. Available for both jumbo and conventional mortgage amounts.

    Eligible Properties 

    Owner-occupied 1-4 unit residence, condominiums, modular homes, and planned unit developments (PUDs), or second homes.

    Ineligible Properties 

    Manufactured homes; cooperative housing (co-ops); property used for agriculture, farming or commercial enterprise; vacant land; investment property, and multi-family (5+ units).

    Lending Area 

    Property must be within any county within New York State.

    Mortgage Insurance 

    Mortgage insurance is required if the loan to value (LTV) is over 80%.

    Payment Due Date 

    Payment due date will be determined when the loan is disbursed.

    Payment Options

    No prepayment penalties

    When you get a mortgage from ESL, you can pay it off at any time without worrying about any prepayment penalties.

    Interest Rate – APR (Annual Percentage Rate)

    Rates subject to credit evaluation. Actual rates may vary. Rates may increase during your loan term. All rates quoted are for properties located in upstate New York.

    Index 

    One-year LIBOR is the average of the one-year rate paid on deposits between international money center banks in the Eurodollar market quoted in U.S. dollars, as published in The Wall Street Journal. LIBOR is a widely monitored international interest rate indicator.

    Margin 

    A fixed percentage that is added to the LIBOR rate at each adjustment period. The margin we use is as low as 2.25%.

    Rate Caps 

    • 5/1 ARM – Following the five year fixed-rate period, the rate can increase or decrease up to 2% during the first adjustment period and 2% per year after that, with a lifetime cap of 5% above the initial rate.
    • 7/1 ARM – Following the seven year fixed-rate period, the rate can increase or decrease up to 2% during the first adjustment period and 2% per year after that, with a lifetime cap of 5% above the initial rate.
    • 10/1 ARM – Following the ten year fixed-rate period, the rate can increase or decrease up to 2% during the first adjustment period and 2% per year after that, with a lifetime cap of 5% above the initial rate.

    Rate Change 

    The new rate will be the index in effect 45 days prior to the change date plus the margin rounded to the nearest one eighth of one percentage point (0.125), except as limited by the caps (see above). The new payment amount will be sufficient to fully amortize the remaining balance at the new interest rate for the remaining term.

    Rate Lock Options 

    The interest rate may float from time of application to a few business days prior to closing.  Anytime during this float time period, the interest rate may be locked.  Conventional mortgage rates are quoted based on a 45-day rate lock.  Extended rate lock options up to 180 days are available upon request.  

    • The conventional mortgage rate may be locked for 45 days and there's no lock fee.
    • Extended rate lock options up to 180 days are available upon request. Extended rate lock fees will be charged a fee at the time the rate is locked.
    • Optional extended rate lock fees are non-refundable if the borrower fails to close. These fees are fully refundable if ESL declines the loan.
     
  • Rates

    Adjustable Rate Mortgage - Full Closing Cost Program

    Product
    Initial Rate
    Points
    APR
    Margin
    Product5/1 LIBOR ARM
    Initial Rate3.125%
    Points0.000
    APR3.186%
    Margin2.250%
    Product7/1 LIBOR ARM
    Initial Rate3.375%
    Points0.000
    APR3.436%
    Margin2.250%
    Product10/1 LIBOR ARM
    Initial Rate3.750%
    Points0.000
    APR3.811%
    Margin2.250%

    Rates accurate as of


    APR = Annual Percentage Rate. Rates subject to credit evaluation. Actual rates may vary. Rates may increase during your loan term.

    All rates quoted are for properties located in upstate New York.

    No maximum loan size (conforming and jumbo at same rate). Up to 95% LTV financing.

    Counties in upstate New York include: Allegany, Broome, Cattaraugus, Cayuga, Chautauqua, Chemung, Chenango, Clinton, Cortland, Delaware, Erie, Essex, Franklin, Fulton, Genesee, Hamilton, Herkimer, Jefferson, Lewis, Livingston, Madison, Monroe, Montgomery, Niagara, Oneida, Onondaga, Ontario, Orleans, Oswego, Otsego, St. Lawrence, Saratoga, Schenectady, Schoharie, Schuyler, Seneca, Steuben, Tioga, Tompkins, Warren, Washington, Wayne, Wyoming, and Yates.

    Rate lock options:

    • The ESL standard mortgage rate lock option is 45 days and there's no lock fee.
    • 90-day and 120-day rate locks: 1/2 point fee paid at time of lock.
    • 150-day and 180-day rate locks: 1 point fee paid at time of lock.
    • The fee associated with the rate lock is non-refundable if the borrower fails to close. These fees are fully refundable if ESL declines the loan.
    • For loans that do not close prior to the rate lock expiration date, the interest rate and total points can change. This determination will be made by ESL as of the day after the rate lock expires. If the new interest rate is the same or lower than the old locked rate, the new interest rate will be the same as the old locked rate and the member will pay the total points associated with that rate and an additional 1/4 of 1-point at closing. If the new interest rate is higher than the old locked rate, then the new interest rate will be the higher interest rate and the member will pay the total points associated with that rate and no additional fees will be charged. Under each situation, the rate will be re-locked for 30-days.
    • Material changes in loan terms brought about by credit qualifications, collateral value, or other factors may void a rate lock.
    • Other adjustable rate and point combinations are available. Please contact us for additional information.

    Payment Examples

     
  • Fees
    Understanding ESL Mortgage Closing Costs and Fees 

    Here’s something important to remember when you’re shopping for a mortgage: 

    We carefully manage and control the mortgage process from start to finish. Our goal? We want to minimize the costs our members pay. That’s one of the reasons why our closing costs are among the lowest in our area.

    We also make sure that our entire approach to closing costs is straightforward and easy to understand. That’s why you’ll know exactly what’s due prior to closing. And you won’t have any unexpected, last-minute expenses that may delay the closing process.

    A Quick Reference Guide to Closing Costs

    At ESL, we realize that buying a home can be a complex and confusing process for many home buyers. That’s why we want to make sure you understand all of the specific costs involved in your closing

    Here’s a quick recap of these common closing costs:

    • Origination charges cover our fees for processing your mortgage application, including your application and underwriting fees, the costs involved in document preparation, and the settlement and attorney costs. 
    • Discount points are paid voluntarily in exchange for a lower interest rate. They are calculated as a percentage of your loan amount and usually paid at closing.
    • Mortgage Insurance will be required on loans with over 80% LTV to protect the lender in the event of default of the borrower.
    • Other expenses for third-party services obtained on your behalf. These expenses include the costs for your title insurance and fees for appraisals and credit reports.
    • Taxes and other government fees cover your state and county mortgage taxes and the recording fees paid to the county clerk.
    • Prepaid items include property taxes, homeowners insurance, and prepaid interest. They may also include mortgage insurance.
    Estimate Your Closing Costs

    To make a sound financial decision about a mortgage, it helps to estimate your closing costs in advance. 

    That’s why we provide a helpful Mortgage Closing Calculator. It will help you find a mortgage that fits your financial situation and your budget.

    Use our Mortgage Closing Calculator today.

    Post-Closing: Potential for Late Fees

    At ESL, there’s only one fee that may be assessed after your closing. And that only happens if your mortgage payments are late. If we do not receive the full monthly payment 15 calendar days after the scheduled due date, you’ll have to pay a late fee that is 2.0% of the total overdue payment of interest and principal.

    Please remember, however, that there are easy ways to avoid late fees. Just make sure your mortgage payments are made on time every month. View Loan Payment Options

     
  • How to Apply

    Once you’ve evaluated your options and made your mortgage selection, you are ready to apply. 

    Below are handy tools that guide you through:

    Call 585.336.1502 or 800.352.6669 x1502, to speak with a helpful member of our Mortgage Team today​.  Or email us and we'll contact you at a time that's convenient for you.