Countrywide’s PayOption ARM puts you in control.

Countrywide’s PayOption ARM

puts you in control.


OVERVIEW

With Countrywide’s PayOption ARM, qualified

buyers can take control of their finances with

choices that suit their lifestyle.

1


OVERVIEW

• During the initial 1 or 3 month introductory period, enjoy a very low introductory rate of 1.00% / 4.145% APR*(one-month introductory period) or 1.75% 4.145% APR*(three-month introductory period).

• After the introductory period, choose from up to FOUR different payment options, providing you with the power and flexibility to control your finances.

† See disclosures on final page of presentation for important terms and conditions..

2


PAYMENT OPTIONS

• Minimum Payment using the introductory period interest rate.

• Interest Only.*

• Full principal and interest to amortize loan over 30-year term.*

• Full principal and interest to amortize loan over 15 years.*

* These three payment choices are available only if they are higher than the minimum payment.

3


MORE OPTIONS

In addition to the monthly payment options, you have a choice of indices to base the loan upon, giving you even more control to choose what is best for you.

• 11th District Cost of Funds Index (COFI). This index is based primarily on the interest rates paid to customers in the 11th Federal Home Loan Bank District (California and Nevada) on savings and checking accounts, and other sources of funds. COFI lags market rates in both uptrend and downtrend movements.

• MTA (Monthly Treasury Average). The Monthly Treasury Average is based on the interest rate paid to holders of United States bonds (U.S. Treasury securities) The MTA index generally fluctuates slightly more than the 11th District COFI, although their movements track each other very closely.

• LIBOR (London Interbank Offered Rate). LIBOR is an average of the interest rates on Eurodollars traded between banks in London. The LIBOR is more open to quick and wide fluctuations than the COFI or MTA index.

4


• 30-Year loan term.

• Fixed start rate for the first 1 or 3 months.

• Payments adjust every 12 months (interest rate can adjust

monthly)1.

• As little as 5% down payment on loans up to $400,000.

• Loans amounts up to $6,000,000 (maximum 60% LTV/70%

CLTV).

1Making the minimum payment may result in negative amortization.

FEATURES

5


ADDITIONAL FEATURES & BENEFITS

• Available on Owner-Occupied, Second Home or Investment Property.

• Available on 2-4 unit (up to $650,000) and High-Rise Condos (90% LTV).

• Stated Income / Stated Asset and reduced documentation loans available (owner-occupied residences only).

• Can pay any amount over-and-above the monthly payment to reduce the principal and lower future payments.

6


MORE BENEFITS

Piggyback a HELOC with the PayOption ARM and free up finances for other purposes.

• Avoid mortgage insurance with an 80/10/10 (up to $650,000).

• With only 5% down use an 80/15/5.* Ask for details.

7


MORE BENEFITS

The PayOption ARM features a Reduced Rate Option (Prepayment Penalty Option).

Homeowners can pay down the principal by up to 20% each year without penalty.

8


Monthly payment reduction using a PayOption ARM during the first 5 years: 25,295.21.*Payment changes assume maximum 7.5% increase each year. Example assumes a loan amount of $400,000, 20% down payment, $4,000 in closing costs and a Pay Option ARM start rate of 1.00%/4.145% APR and the initial Interest Only program rate at 5.75%, 5.842% APR. The initial minimum PayOption ARM payment would be $1,287.00, maximum payment not to exceed $1,718.75 after 5 years. The initial Non-Conforming 5/1 Interest Only payment would be $1,916.67, maximum payment not to exceed $1,916.67 after 5 years. Interest rates are based on current market rates and are subject to change without notice and are for informational purposes only. Interest is accrued at a fully amortized rate that is a higher rate than the effective rate. Minimum payment may result in an accumulation of deferred interest, also known as negative amortization. See last page for important loan disclosure information.

1.78% 1 month LIBOR2.20% Margin3.98%

Interest Only Payment 1,326.66$ 30yr Am Payment 1,905.05$ 15yr Am Payment 2,954.74$

5.75 RateMin Payment 1,916.67$ PaymentYear 1 (Start Rate 1.00) 1,287.00$ 15,444.00$ Year 1 23,000.00$ Year 2 7.5% Increase 1,383.53$ 16,602.30$ Year 2 23,000.00$ Year 3 7.5% Increase 1,487.29$ 17,847.47$ Year 3 23,000.00$ Year 4 7.5% Increase 1,598.84$ 19,186.03$ Year 4 23,000.00$ Year 5 7.5% Increase 1,718.75$ 20,624.99$ Year 5 23,000.00$

Total Min Payments 89,704.79$ Total IO Payments 115,000.00$

SAVINGS 25,295.21$ Based on $400,000 Loan Amount

NonConf 5/1 LIBOR Interest Only

Pay Option vs. 5/1 Interest Only - 5 yr Payment Comparison

NonConf LIBOR Pay Option

9


Negative amortization (deferred interest) builds when the payment option selected isn’t enough to cover all of the interest due each month. (The loan is recast when negative amortization reaches 115%, 110% in New York.)

NEGATIVE AMORTIZATION

• In certain circumstances, a qualified borrower may wish to permit negative amortization to build, and then pay it off if it becomes advantageous from a tax perspective, perhaps the result of higher income due to bonus, job change or higher commission. Consult your tax advisor.

• Also, every fifth year this smart loan will recast (if not sooner), meaning that the loan balance will be recalculated and re-amortized to allow the loan to be paid off within the original term.

10


PAYOPTION ARM - REVIEW

Low introductory start rate for the first 1 or 3 months of the loan.

Thereafter the interest rate changes monthly. (The payment is fixed for 12 months.)

11


PAYOPTION ARM REVIEW (continued)

After the introductory period, the borrower can choose from these payment options:

Minimum Payment: The lowest payment allowed based on the initial start rate. This payment amount may be lower than the interest-only payment and may result in deferred interest.

Interest-Only Payment: The amount that would pay only the interest portion of the payment. The principal balance will not be paid down, but this option allows low payments without deferring interest (negative amortization).*

Full principal and interest to amortize the loan fully within the original term (30 years).*

Full principal and interest to amortize the loan fully over 15 years.*

* These three payment choices are available only if they are higher than the minimum payment.

• The first payment change date will occur after the first 12 months and every 12 months thereafter.

12


With so many choices,


is the clear choice.

13


† Important terms and conditions, page 3

Interest rate and APR assume a $400,000 loan amount, a 30 year loan term, and 80% LTV. The first minimum required payment amount (“effective rate” payment) will adjust on the first of the

month on which the thirteenth monthly payment is due and every twelve months thereafter for the first five years.

PayOption ARM loan is recalculated every five years or immediately if negative amortization reaches 115% (110% in New York).On each payment change date, the payment (Full Payment) changes to the fully amortizing amount at the then-current interest rate, principal balance and remaining term, subject to the payment cap.

The minimum payment may cause negative amortization to occur. Since the minimum effective payment may not fully amortize your loan after 30 years, your loan balance and APR may increase.

The fully indexed interest rate adjusts on the fourth monthly payment and monthly thereafter. Lifetime interest cap 9.95%. Ask for details. ARM rates subject to increase during loan term. Program terms are subject to change.

Interest rate is based on 1-month LIBOR as of 9/14/04 plus a margin.

14


Equal Housing Lender. © 2004 Countrywide Home Loans, Inc., 4500 Park Granada, Calabasas, CA 91302. Trade/servicemarks are the property of Countrywide

Financial Corporation and/or its subsidiaries. Arizona Mortgage Banker License Number BK8805; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act; Georgia Reg. #5929; Illinois Residential Mortgage Licensee; Massachusetts Mortgage Lender License No. ML 1623; this is not an offer to enter into an interest rate lock-in agreement under Minnesota law; Licensed by the New Hampshire Banking Department; New Jersey (818) 313-6526, Licensed Mortgage Banker, NJ Department of Banking and Insurance; Licensed Mortgage Banker, NYS Banking Department; Registered with the Pennsylvania Banking Department; Rhode Island Lender's License. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved.

Countrywide is a national leader in residential finance and is a member of the prestigious Standard & Poor’s 500 and Fortune 500.

15

Countrywide’s PayOption ARM puts you in control.

Documents

Transcript of Countrywide’s PayOption ARM puts you in control.