How The Mortgage Works
VIENNA, Va.-Here is how HarmonyLoan answers questions about its product:
Q: What mortgage products are available under the HarmonyLoan Program?
A: Conforming and Jumbo 5/1, 7/1, 10/1 ARMS and 15 year fixed.
Q: What does the member get when they "click" the reset button?
A: For the 5/1, 7/1, and 10/1 ARM, the member receives a new fixed-rate portion of their ARM with a new interest rate (possibly lower, but could stay the same or be higher, depending on market conditions). For example, if you have a 7/1 ARM and after three years you "click," you receive a new rate fixed for another seven years. For the 15-year fixed the interest rate upon each "click" can only go down and never back up.
Q: Why would a member click the button at a higher interest rate on the ARM?
A: If the member has an ARM and is nearing the end of the fixed-rate portion, for example the member is in the 4th year of a 5/1 ARM, they may want to "click" the button at a higher rate to lock-in another five-year, fixed rate. If the member "clicks" the button on the 7/1 they get a new fixed rate for seven years. If they "click" the button on the 10/1 they get a new fixed rate for 10 years.
Q: Does the loan term start over again?
A: No. When the member lowers their interest rate under the HarmonyLoan, the remaining term stays the same. For example, if the member "clicks" the button after 12 mortgage payments on a 30-year amortized HarmonyLoan, the member will still only have 29 years left on the mortgage.