Here are some frequently asked questions from our clients.
ARM stands for Adjustable Rate Mortgage. This means that the interest rate on the loan, like a South Carolina home mortgage, for instance, can be adjusted for a disclosed period of time. All ARMs should clearly denote the initial interest rate, the adjustment period, the index rate, and interest rate caps. An ARM may mean smaller payments at first, but borrowers run the risk of higher payments once the adjustments are complete.
A fixed-rate mortgage, on the other hand, means that the interest rate doesn’t change. Payments are the same over the entire repayment schedule. Your rate it, in essence, “locked in” so long as you do not refinance.
Because we’re an agricultural credit cooperative, ArborOne--part of Farm Credit--is owned by the member-borrowers who purchase stock and participation certificates in the cooperative. At the end of every fiscal year, our Board of Directors may choice to retain the net income of the Association to strengthen the company’s capital, or distribute some or all of the net income to members by declaring a dividend on stock or a patronage refund.
That means at the end of the fiscal year, you may qualify for money back on the interest paid on your loan. This not only reduces the costs for the company itself, but lowers your overall costs as well. In 2006, ArborOne returned 25 cents on every dollar earned by members. This effectively lowers the overall impact of your South Carolina mortgage rate.
Recent new coverage has talked a great deal about the subprime crisis. What subprime means, essentially, is that lenders are giving mortgages to borrowers who do not qualify for the best rates due to a bad credit history. This poses a problem for lenders and borrowers, as rates tend to be extremely high, and the proportion of defaults even higher. Subprime loans can lead to foreclosure, which has happened to hundreds of thousands of borrowers in the last few years. Though some view the practice as a second chance to help borrowers build their credit, recent trends have indicated that the risks far outweigh the benefits.
ArborOne does not offer subprime loans. Our rates are competitive for those who qualify.
Interested in hearing more about our programs? Contact us or drop by one of our locations to discuss how we can help.
Knowledgeable ag lenders, patronage refunds, friendly service and competitive rates - that's the ArborOne advantage.
We are with you every step of the way throughout the lending process. From small tracts to large tracts, new construction to renovations, lot purchase to recreational properties – ArborOne can do it all.