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Frequently asked questions about the Macquarie Asset Manager™
Why choose the Macquarie Asset Manager? The Macquarie Asset Manager (MAM) combines an interest-only (first ten years), variable rate loan with a home equity line of credit to provide maximum flexibility and control over both the monthly payment and the equity. Interest-only payments improve the borrower’s cash flow by reducing the required monthly payment. Interest-only payments allow borrowers the flexibility to make principal payments that suit their lifestyle. Why a Home Equity Line of Credit (HELOC)? Under a traditional home loan, borrowers can only access their home’s equity by taking out a second mortgage. With a HELOC, they can access their home’s equity any time they need it. All they have to do is write a check. Why is the Macquarie Asset Manager a variable-rate loan? The Macquarie Asset Manager is actually a line of credit, which allows the borrower to borrow up to their limit and repay as they choose (as long as they meet their minimum monthly obligations). Like most lines of credit, the interest rate varies with the market. What happens after the interest-only period? Interest-only payments are for the first ten years. After this the loan limit will begin to decrease at 1/240th per month and borrowers may have to make principal payments to comply with it. How that will affect their monthly balance depends on their loan balance in relation to their credit limit at that time. Here’s what actually happens: After the first ten years, the credit line will be reduced each month by 1/240th (the number of months left on the loan at the end of the 10-year interest-only period). If the balance is higher than each month’s new credit limit, the borrower must pay the difference in addition to the interest. But, if they have paid ahead on their loan balance, they will continue to pay interest-only payments until their credit limit reaches their balance. Can additional payments be made toward the principal? Absolutely. In fact, the Macquarie Asset Manager makes it possible to pay down the loan balance much faster than traditional loans. Why is there no escrow for taxes and insurance? When the borrower’s money is sitting in escrow, someone else is earning interest on it. With the Macquarie Asset Manager, the borrower simply pays their taxes and insurance when they’re due, just as they would any other bill. The borrower also has the option of making extra payments to their mortgage in an amount equivalent to the monthly taxes and insurance. This gives them the benefit of reducing their principal balance (and thereby reducing their interest payments) until the taxes and insurance come due, at which time they can draw the funds from their mortgage to pay them (assuming there is sufficient credit available). Why does Macquarie Mortgages USA Inc. pay the mortgage insurance? Mortgage insurance protects the lender, not the borrower. At Macquarie Mortgages USA Inc., we just think it’s fair that we pay those premiums. Choose between two indexes – Prime or 1 Month LIBOR. The borrower chooses which index they want when the loan is submitted and it cannot be changed once the loan has closed. Can a borrower switch from one index to the other? No. The borrower will need to refinance the loan and choose the other index. Is the Macquarie Mortgage Xpress program available? Yes, the Macquarie Mortgage Xpress is a reduced documentation program available for borrowers with a 750 minimum credit score and solid mortgage payment history. Borrowers are not required to provide income or asset disclosure or verification. When is the interest rate set? The initial interest rate is based on the rate as listed in the applicable Macquarie Mortgages USA Inc. rate sheet, plus or minus a margin. Thereafter, the Prime based index for each month is based on the highest Prime Rate as published in the Wall Street Journal. The LIBOR based index for each month will be set on the first business day of each month as published in the Wall Street Journal, and will apply to the entire billing period. The margin will vary based on many factors; including the index that is chosen, the LTV, the borrowers’ credit scores, and other loan attributes. Please refer to the Macquarie Mortgages USA Inc. rate sheet for specific margin information. How is the payment calculated? Monthly payments are calculated as follows:
Average daily balance for the month For example:
$100,000 x 6.60% = $6,600 Monthly payments on all Macquarie Mortgages loans are due the 15th of each month, and cover the billing period for the prior month. The first and last payments on each loan will be pro-rated accordingly. The minimum monthly payment is the interest calculated on the average daily loan balance during the previous month. Because direct withdrawal of the monthly payment reduces costs and helps keep fees low, Macquarie Mortgages USA Inc.’s pricing assumes this payment method. If a borrower wants to make monthly payments by any other method (e.g. check) additional charges will be applied. Is there a fee for closing the credit line early? Yes, there is a fee whenever allowed by state law, which in most cases is a three-year early termination fee. In most states these fees are based on the credit line amount at the time the line is closed. There is also an option available which has no early termination fee, but it includes a higher interest rate and a limited YSP to the broker. The annual fee, when allowed by state law, is payable following the first 12 months of the loan and consists of two $30.00 payments each year – one in March, and one in September. Are transaction fees charged for credit line advances? No, there are no transaction fees charged to the borrower – they can take as many advances against their credit line as they want, as long as they have sufficient available credit.
Important Information The Macquarie Asset Manager is offered by Macquarie Mortgages USA Inc.. This information is provided as general information for Mortgage Professionals only and is not an advertisement to extend credit as defined by Reg Z, sec 226.2. Please refer to the current Macquarie Rate Sheet for full information on rates and states of product availability. Full loan terms and conditions are set out in the relevant loan agreement, and fees and charges apply. Early termination fees are subject to state law limitations. All loans are subject to credit approval. Rates, fees, products, and processes may change without notice. Please refer to the information contained in the Terms and Conditions for more important product and licensing information.  Rancho Funding - 611 K St Suite #B-204 - San Diego, CA 92101 Fax: 1-877-814-7718 Toll Free Phone: 1-877-664-6368 Loan approval is not guaranteed and is subject to verification of specific information that requested at the time of application. Specific rates may not be available for all borrowers. Rates subject to change. California Dept. of Real Estate, Broker #01421018 “Home Ownership Accelerator” and the yellow flying house logo are trademarks of CMG Financial Services, Inc Home Ownership Accelerator® is a proprietary financial product innovated and funded by CMG Mortgage Services, Inc., San Ramon, CA, for assignment and servicing by GMAC Bank®, Member FDIC, Horsham, PA. This is not a bi-weekly program usually refered to as the Mortgage Accelerator or Mortgage Excellerator. Macquarie Asset Manager(TM) registered trademark of Macquarie Mortgage USA Programs available in: Alabama, Al, Alaska, AK, Arkansas, AR, Arizona, AZ, California, CA, Colorado, CO, Connecticut, CT, Deleware, DE, Florida, FL, Georgia, GA, Hawaii, HI, Idaho, ID, Illinois, IL, Indiana, IN, Iowa, IA, Kansas, KS, Kentucky, KY, Louisiana, LA, Maine, ME, Maryland, MD, Massachusetts, MA, Michigan, MI, Minnesota, MN, Mississippi, MS, Missouri, MO, Montana, MT, Nebraska, NE, North Carolina, NC, Nevada, NV, New Hampshire, NH, NEw Jersey, NJ, New Meico, NM, New York, NY, North Dakota, ND, Ohio, OH, Oklahoma, OK, Oregon, OR, Pennsylvania, PA, Rhode Island, RI, South Carolina, SC, South Dakota, SD, Tennessee, TN, Texas, TX, Utah, UT, Vermont, VT, Virginia, VA, Washington, WA, West Verginia, WV, Wisconsin, WI, Wyoming, WY
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