Toll Brothers Rolls Out An Adjustable-Rate Mortgage
10 Julio 2009 - 3:52PM
Noticias Dow Jones
Toll Brothers (TOL) is bringing back the adjustable-rate
mortgage: The luxury builder said Friday it is offering a 7/1 ARM
for 3.75%.
The deal for contracts signed on or after Saturday is available
for loans under $417,000 - the majority of the company's buyers -
in many communities nationwide.
The builder said it isn't worried about the bad reputation that
ARMs have gotten, because this special rate will not quickly reset
with crippling or unexpectedly high payments. After the seven-year
rate lock, the loan's lifetime cap is 8.75%.
Given that many owners stay in a home for just a few years,
"some buyers may choose not to pay that 30-year premium," said Don
Salmon, chief executive of TBI Mortgage Co., Toll's mortgage
subsidiary. "I think this is a viable product for many
consumers."
Should the buyer desire a 30-year fixed-rate loan, that is 4
3/8%. A true jumbo loan could get a 7/1 ARM at 4.75%. The
fixed-rate for loans above $417,000, but below $729,000 is 4.5%.
There are no points for consumers.
The rates, which are among the lowest the company has offered,
could be pulled at any time, it said.
The continued downturn has forced builders to get creative to
move inventory. They've tried everything from free vacations to
paid closing costs. In January, Toll stunned the industry with a
fixed 3.99% rate for 30 years, a deal that ended several months
ago.
It was successful, but many consumers instead chose a slightly
higher rate that let them pick options, such as an upgraded
kitchen, Salmon said.
-Dawn Wotapka, Dow Jones Newswires; 212-416-2193;
dawn.wotapka@dowjones.com