| than for home purchase. The Freddie Mac analysis does not track the use of funds made available from first horizon mortgage refinances. A mortgage lender will sometimes charge a penalty for the early payoff of a loan. Usually, the penalty is only for an early payoff in the first few years of the loan. The penalty is considered an interest first horizon mortgage and is deductible in the same manner as the underlying mortgage interest. For example, if it's a home mortgage loan on your first or second home, the penalty would be deductible on Schedule A as home-mortgage interest. If the loan is for a rental property, then the interest would be deducted on Schedule E. What is the difference between a hybrid and a traditional ARM THE dominant loan product first horizon mortgage today's marketplace. They are often packaged as the 5/1 ARM or the 2/28 ARM (most popular products). The loan is a "Hybrid" because a true ARM adjusts for the same periods for the life of the loan, ie. a 6 Month ARM first horizon mortgage fixed for the first six months and adjusts every six first horizon mortgage afterwards. The 2/28 "Hybrid ARM" is a 6 month ARM that the borrower has purchased a "Rate Lock" or introductory rate for the first 2 years (this is also done in 3,5,7 year fixed periods), and then the loan becomes a 6 month ARM thereafter, rather than a loan that does only first horizon mortgage every 2 years. The benefits This loan product has actually lowered the costs of borrowing in the early years of loans, but first horizon mortgage is a source of continuing refinance business to the Mortgage industry. They let borrowers take advantage of special pricing, by saving money on payments when the borrower's a) salary is rising such as for young professionals or b) when the borrower knows they are going to move up |
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