About the MTA Loan 

MTA = Monthly Treasury Average

MTA Loan (Low Payment ARM)

ARM = Adjustable Rate Mortgage

Today's Start Rate is: 1.25 %

America's First Funding Group has created this website specifically geared around 1 loan type, The MTA Loan or Cash Flow Option ARM. This website is dedicated toward educating you so you may make an educated well informed decision on the type of mortgage that will best suit you. The MTA Loan is an alternative mortgage to the Conventional 30 or 15 year fixed rate Mortgages and with the drastic rise in House prices and the need to keep monthly payments at a minimum the MTA Loan may be the right loan for you.
The MTA Low Payment ARM gives you control over your monthly cash flow by reducing your mortgage payment during the early years of the loan.

The MTA ARM provides more opportunities for financially savvy borrowers who seek more customized and ultimately less costly home-finance choices. This makes the MTA ARM a great financial tool for homeowners.

In a speech to a credit union group, Fed Chairman Alan Greenspan questioned whether fixed-rate mortgages were the most cost-effective means of financing a home purchase. He said "American homeowners clearly like the certainty of fixed mortgage payments" but pay several thousands of dollars a year for the benefits.

Greenspan said homeowners "might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade"

Greenspan also noted that if “homeowners are willing to manage their own interest-rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home." Feb. 24, 2004

Advantages of MTA ARM:

• Low monthly payments: Monthly payments are based upon below market rates. Example: a $300,000 loan at a 1% start rate will have a minimum monthly payment of $964.92

• Check out our Calculators for more specific calculations.

• Low initial rate: Most MTA ARMs are offered with a very low initial rate. This can allow you to qualify for a larger loan due to this initially lower rate.

• Flexibility in the monthly payment: It is one of the main advantages of MTA ARMs. With MTA-indexed ARMs you will usually have a choice of payment options. Besides fully indexed and minimum payment options your MTA ARM will probably have an interest only payment option and you will be able to change payment options every month if you like.

• Tax Planning: MTA ARMs may be used for tax planning. The borrower can defer interest payments and at the end of the year, analyze their tax situation. If it serves their tax interests, they can make a lump sum payment toward any interest that has been deferred and deduct it for tax purposes.

• Easy qualifying: If qualified, homebuyers can apply without documenting their income, assets, or source of down payment. This can be helpful for self-employed or commissioned borrowers.

Why Consider an MTA ARM?

The MTA minimum monthly payment can save you hundreds or even thousands a month over a conventional loan of the same loan amount for the next 5 years.

Monthly savings can be invested and/or used to pay off credit cards.

It is a good mortgage if you have a need to accumulate more assets, or the need to fund investment accounts (higher return on your investments).

The MTA is a good fit for people who own their own business, have a fluctuating income, or work on commission.

The MTA is very popular with people who invest in real estate.

The MTA is a good mortgage for those with less than perfect credit or if your debt ratio is too high.

It offers flexibility in your monthly payment - you will have a choice of payment options.

MTA Loan Stability:

The MTA Index does not move up or down as rapidly as other market interest rates because the MTA is an average of annual yields on U.S. Treasury Securities over a 12-month period. 

As a result:

• Higher yields are offset by lower yields on a monthly basis throughout the year

• It creates an index which is far less volatile than other pure-rate indices

• Interest rate increases take longer to affect the 12-MTA than other ARM indices

• Historically, home loans tied to the 12-MTA have not exhibited sharp interest rate increases such as those that occurred in the late 1980s.

MTA vs. Other Indices

The MTA is a very slow index. The index is nearly as stable as the world's most stable index, The Cost of Savings Index (COSI). However, MTA mortgages generally have better margins than the COSI making the MTA a better deal. 

How it works:
 
*Initial start rate will be in effect for one month and then change to the Fully Indexed Rate which has been ranging between 3.9%* and 4.9%* (*call 888-686-0063 for current rate) You will have the option to pay your loan as if the rate was still at your start rate.
Example:
A $300,000. Loan at a start rate of 1.25% would be a minimum mothly payment of $999.76 for the first month or making the fully indexed rate payment of (aprox avg)$1661.26 giving you more flexibility than a fixed rate mortgage.
You have the option of continuing to make that low payment of $999.76 for 12 months. Your next payment increase which can happen, will be the start of the 2nd year and is payment capped at 7.5% of the previous years minimum payment. So in this case your payment cap = a maximum of only $74.98 for the second year. This means your second year's minimum mothly payment minimum payment would be $999.76 + $74.98 totaling $1,074.74
This max payment increase of 7.5% of the previous years minimum monthly payment can continue every year for 5 years. Even if it takes the max increase every year, your payment, even in the 5th year, is still much less than the 30 year fixed at 6% interest. Don't forget 7.5% is the max increase and could be less, depending upon the MTA index.

The Lifetime interest rate cap is 9.95%

After the 5^th year, your payments will be based upon your outstanding principle balance using the fully indexed MTA loan rate

• Can be done with as little as 5% Down payment

• Stated Income with 20% Down payment or equity

• Start Rate: as low as 1.00% (with 20% equity or Down     payment)

• Cash Out OK

• Investment Properties OK

• Below market initial interest

• Loan amounts up to $1,500,000.00

• Low monthly payments for up to five years

What are the disadvantages to the MTA Mortgage?

1. Adjustable - No matter how you slice it, this mortgage is adjustable. For people who do not intend on utilizing the MTA mortgage flexible loan options and intend on living in their home for 30 years, you may be better off in a 30-year fixed mortgage. Because 30-year fixed mortgages rates are so low right now, you may as well lock in the 30-year fixed rate instead of opt for an adjustable mortgage that can, over time, exceed the current 30-year mortgage rates.

2. Little or $0 Downpayment - The MTA mortgage does not allow for less than a 5% downpayment. If you require 100% financing and wish for a low payment, you should consider 1, 3, 5 year interest only ARMS.

* For more information call 1-866-468-2111 to get Pre-Approved or for the current MTA Loan rates. We have the expertise to answer any questions about our rates and products.
* Rates may vary depending on equity, downpayment and credit.
* Before making any financial decision please consult with your financial advisor for the most accurate information available. This should be used only a reference and not as a basis for making any financial decision.
*Consult a licensed mortgage professional for details pertaining to any and all available home loan programs.  Not every applicant qualifies nor is every program available for each unique borrower in different US States. Different US States have different lending guidelines so please check with your Loan Specialist for State guidelines pertaining to this or any other Loan Program.