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Argent Product Lowers Initial Monthly Payment

Irvine, CAWholesale lender Argent Mortgage Company here is offering a fully amortized 40/30 loan program that helps make homeownership more affordable and less risky to homebuyers, all the while enabling them to consistently build equity on their house.

These features are expected to serve well the current shrinking market where borrowers and lenders alike are looking for new efficient lending options.

"While the idea of lowering mortgage payments is attractive to most borrowers, many people are also looking for ways to avoid balloon payments and maintain their equity building potential," Argent president Sam Marzouk told MSN. "Argent Mortgage Co. found a modern approach for a traditional 30-year-term program that allows mortgage professionals to help their customers meet these goals."

Irvine, Calif.-based Argent said the 40/30 loan option is designed "to perform like a 40-year loan for the first 10 years of the loan term." It provides borrowers with the option to extend the time period, during which they can pay less money for their monthly mortgage, avoid balloon payments, reduce principle during the entire life of the loan and build equity.

The 40/30 product caters to both the needs of low- to medium-income borrowers and those living in higher-cost real estate markets where a 40/30 loan helps increase their buying power.

Mr. Marzouk noted upon the release of the product a few months back, "As one of the first loans of its kind from a major lender, our fully amortized 40/30 product gives mortgage professionals who work with Argent an attractive solution for many borrowers who want to reduce their payments without sacrificing their equity-building potential.

"The borrower would have 10 years at a 40-year amortized payment. After the initial 10 years, the monthly payment re-amortizes over the remaining 20 years. Overall, the loan is paid off in 30 years without a balloon payment."

Argent's goal, Mr. Marzouk added, is to provide the tools and products brokers and other mortgage professionals need to offer their clients "affordable and sustainable homeownership" solutions.

And one of the most beneficial features of Argent's fully amortized 40/30 loan product, the company said, is that "homeowners have the potential to build equity during the entire term of the loan."

It features a loan payment term of 30 years, meaning it is a 30-year loan that is operated as a 40-year loan for the first 10 years of the loan term. So if a borrower has paid the mortgage for the initial 10 years, as part of a 40-year amortized payment, after the first 10 years, the monthly payment loan re-amortizes over the remaining 20 years. This way the borrower can pay off the loan in 30 years and at the same time avoid having to deal with a balloon payment and related financial obligations and potential hardships.

In addition, since the loan amortizes as a 40-year term loan for the first 10 years, the mortgage is more affordable for homeowners for a longer time. Plus, during the remaining term the loan is fully amortized.

Moreover, by combining the payment of interest and principle during the life of the loan, borrowers continuously build equity.

Argent maintains that its 40/30 is a very competitive option in the market given that it is different from similar, 40-year programs available to borrowers in today's marketplace, which "do not have the progressive features" the company has incorporated in the product.

However, Argent offers the 40/30 loan following certain guidelines and restrictions.

The loan is only offered on owner-occupied and second-home properties that are single-family residences, condominiums, planned unit developments and one- to two-unit residences.

SNAPSHOT: Argent's 40/30 Loan

1st 10 Years 40-Year Amortization

2nd 20 Years Reset on 20-Year Amortization

Result Loan Fully Paid after 30-Years

Source: Argent Mortgage

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