• Intermediate LIBOR ARM
• Temporary Buydown

Intermediate LIBOR ARM

SunTrust offers a wide range of ARM products, all the way from our One Month ARMs to our 10 Year ARM loans. Those ARMs with the first rate change more than 1 year after closing are typically referred to as Intermediate ARMs. This includes:

• 5/1 ARMs - which have a fixed rate for five years, an adjustment, and then change annually thereafter
• 7/1 ARMs - which have a fixed rate for seven years, an adjustment, and then change annually thereafter
• 10/1 ARMs - which have a fixed rate for ten years, an adjustment, and then change annually thereafter

Intermediate ARMs can offer the best of both worlds - a lower initial rate than a fixed rate mortgage but also the stability of a fixed rate for a specified period of time.

• 95% loan-to-value on almost all intermediate ARMs.
• Lower initial rate than fixed rate program.
• May be able to qualify at start rate depending on loan-to-value ratio.
• Extended timeframe to first adjustment - can be as much as 10 years.
• Great for people moving before initial ARM period is over.
• Can prepay loan and lower your monthly payment at rate adjustment dates.
• Loan sizes to $2,000,000.
• Based on the 12 month LIBOR Index.

To see examples of monthly payment terms, view our APR Examples.

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Temporary Buydown

Many of our loan programs permit the use of temporary buydowns. A temporary buydown is when you or someone else (the seller, perhaps) pays money at closing which is used to reduce the payments you make early in the loan term.

How it works: you or, perhaps, the seller will pay a sum to the lender which is equal to the amount of money needed to make up the difference between interest that would be (in the example below) due with a payment at 4.5% or 5.5% instead of the actual 6.5% on the Note. The lender will inform the borrower of the exact amount due in monthly payments on the mortgage loan during the buydown period.

For example, a seller might offer to provide the buyer of one of his houses funding for a "2-1 Buydown." If the interest rate which the borrower agrees to pay on his or her fixed rate mortgage note at closing is 6.50%, then a 2-1 Buydown will mean that the borrower will actually make monthly payments for the first 12 months based on a rate 2 points below the "note rate" or at 4.50% in this example. For the following 12 months, payments would be based on 5.5% or 1% below the note rate. At the end of 24 months, the borrower would make payments based on the note rate of interest, 6.50%, for the remainder of the loan.

Again, a 2-1 Buydown offered on a 6.50% loan for $250,000 with 2 origination points and an APR of 6.708% (if the seller is funding the buydown the APR is 6.695%) would mean that payments are made by the borrower as follows:

• 1st 12 monthly payments of $1,266.71 @ 4.5% interest
• 2nd 12 monthly payments of $1,419.47 @ 5.5% interest
• Remaining term: 336 monthly payments of $1,569.19 @ 6.5% interest

SunTrust has other buydown features. Please see additional information about our ARM Alternative option.

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