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-Tony Marks

Many of you have ARM’s, or “Adjustable Rate Mortgages” that up until recently were very popular choices for mortgages. My current database of customers is riddled with ARMs that are in the 3% to 5.5% range. Some of them are ”option arms” or ”interest only”, others are traditional 5/1 ARMs. All of them are without pre-payment penalties. (I discourage prepay-penalties, even when they may mean a lower rate.) So what if you have an adjustable rate mortgage? Is it still a financially strong mortgage? Are you prepared for your mortgage adjustment?

Or Do You Have an “Olive Oyl” ARM?

(I love saying that.)

If you’ve been shopping for a mortgage you’ll find in many cases, that ARMs have higher rates than the more conservative 30 Year Fixed Mortgage. (as of Sept. 12th/07). This is largely do to a Wall Street driven stance on what’s considered risky for banks. Furthermore, ARMs just aren’t that profitable to lenders right now. So let’s focus on the ARM you currently have. In order to asses the “strength” of your ARM you need to know the terms. When will you adjust? What is your index? What is your Margin? You’ll discover these terms by referencing your “Adjustable Rate Loan Disclosure.” (you signed this when you closed on your loan. For those of you in my database, contact me, I can pull this disclosure from my archives.)

Ok, first things first, you need to determine exactly when your adjustment date is. If you’re within a year or two, I recommend exploring your options. Lending guidelines have been changing rapidly, and although rates remain historically low, the future is unknown. Consulting with a Mortgage professional or even a reputable Financial Planner can help you determine your best options.

Secondly, your INDEX. Most ARMs are tied to either the MTA index, or the LIBOR index. Ok, the “what?“ & “what?” index? The MTA is the “Monthly Treasury Average” and it’s the 12 month average of the monthly average yields of U.S. Treasury securities adjusted to a constant maturity of one year. What your really need to know is where the MTA is through the month of August 2007: 4.933%

The LIBOR is the “London Inter Bank Offering Rate” and it’s an average of the interest rate on dollar-denominated deposits, also known as Eurodollars, traded between banks in London. There are a few different averages used for this index, so make sure you know which one you have. (6 month and 1year are the most common.) The 1 Year LIBOR as of 9/11/07 is: 5.06938

So, you know your adjustment date, and your figured out your Index. Now what? Now you need to add the margin to the index. The margin can be found on your ARM disclosure we mentioned earlier. Usually, it’s around 2.25% or 2.5%. If your index is the MTA, then you take 4.933%(index) + 2.5%(margin) = 7.433%.

I posted the above photo of Olive Oyl flexing her arms because I believe it humorously depicts many of the adjustable rate mortgages out there. The image of her flexing muscles and showing strength doesn’t hide the fact that she has very, very skinny arms.
7.5%…that's probably a considerable jump in your monthly payment for many of you. That’s why it’s important to know the strength of your ARM.

Whether you’re a homeowner, a potential buyer or seller, Trulia.com is an online source to consider. On the other hand, many of us have been using realtor.com for years, as it has been the primary “go-to” website for buying and selling homes. So which is better? Depends on who you ask. Can you really have both? Sure…it’s like Coke and Pepsi.

Very much in the way we choose sides between Coke and Pepsi, many real estate professionals and consumers alike are pledging their loyalties to either Trulia.com or Realtor.com.

Ok, so I’m a Coca-Cola Classic kind of guy. But that’s where the analogy ends. You see, when it comes to soft drinks, I want to stick with the old standard. I’m actually dissappointed when a restaurant only has Pepsi products. My taste buds, for whatever reason, are “tuned in” to Coke. You could try, but I’ll pass the “Pepsi Challenge” any day of the week. I don’t want change, I don’t want to see attempts to improve upon, just leave Coca-Cola as is…
On the other hand, for the exact opposite reason, I prefer Trulia.com over Realtor.com. In the online world I’m searching for the next big thing, and Pete Flint, CEO of Trulia, chose to do just that. He’s created an online collaboration of home listing searches with trends and tools, and an online community of real estate professionals called Trulia Voices that has provided a new voice for the online world of real estate. Simply put: change , a little risk taking, and more forward thinking. If Pepsi were an internet company I’d choose them over Coca-Cola…Pepsi then, would truly be the “choice of the next generation.”

I guess that makes me part of the “Trulia Generation”.

Race for the Cure

As a loan professional with First Horizon, I'm proud of our national commitment to support the Susan B. Komen Race for The Cure. We will donate more than $1 Million nationally over a 5 year period to the Komen Breast Cancer Foundation.

To do my part, I've created a team in Saint Petersburg, FL to raise money, and to walk the 5K on October 6th, 2007 at Vinoy Park. This will be my 4th year leading a team, and for those of you who haven't participated, it really is a fun and relaxing day. It's only $30 to donate and recieve a t-shirt.

I know, I know, some of you don't want to get up at 7am on a Saturday...uggh. But! I have a solution: Sleep in for the Cure Registration is only $35.00. You can select this option to join the Race in spirit and "Sleep In" race morning. They'll even mail you a Sleep in for the Cure pillowcase. So, if you want to walk, or donate, or just sleep in, click here, and join my team!

Lastly, my personal pledge includes a portion of every loan I close between September 1st and October 1st. This means I'll donate $100 for every loan you close with me or refer to me during this time.

Thanks everyone for supporting this worthy cause!

What Makes First Horizon Different?

What makes First Horizon Home Loans different? What makes any mortgage company different? I believe it's the relationship formed between the Loan Officer and you, the customer. From the first time you made application until now, I've been your Relationship Manager. But, many of you aren't using my services as much as you could. I'm not just here in case you need to buy a new home, or refinance an existing mortgage; I'm here for "All Things Financial". I'm available for questions regarding Checking, Savings, Online Banking, CD's, Wealth Management, Home Equity Lines, the list goes on.
More importantly, I'm here for any questions or concerns you have about your account with First Horizon. Need help with your Escrow? Need to know if your Homeowner's insurance has been paid? What about paying down your principle? What if you're a few days late on making a mortgage payment, or your just want to know if you can set up a bi-weekly program. I can assist you with all of these concerns or questions. I'm tempted to even tell you to throw away the "customer service number"; why wait on hold, when you can call me directly, or shoot me an email? (800-453-7170 ext. 103 or admarks@fhhlc.com)
This is what makes First Horizon Home Loans different. As your Relationship Manager I'm working hard to make our bank stand apart from the crowd, and to make your experience with us exceed all of your banking expectations.
As your Relationship Manager, I encourage you to keep checking this blog. I'll update periodically to inform you of industry insights, banking info, and new products. If you have a topic you'd like me to discuss, let me know...this blog is "All Things Financial" and your opportunity to learn more about relationship banking with First Horizon.