ING Direct started out as a European bank. They had a long history of doing business throughout the continent and had a number of prestigious subsidiaries including Britain’s venerable Barings Bank. They entered the United States consuming banking market as an internet-only direct bank offering a number of products including the high-interest rate Orange Savings Account and a number of mortgage products through their Orange Mortgage subsdidiary.
ING Direct was acquired by Capital One on February 15, 2012. Capital One is a large US-based consumer financial services firm, best known for their credit card offerings. As a result of the acquisition, ING Direct Orange Mortgage’s products will likely continue to evolve and become even more competitive.
ING Direct offers two key refinancing products. Both are adjustable rate mortgages, billed as 5/1 and 7/1 Orange Mortgages. They give either a five or seven year fixed rate period then adjust once per year. While they may seem unattractive since they are not traditional 30-year fixed rate loans, ING points out that they actually match the average life of a mortgage for an American homeowner. In other words, if you’re only going to keep your mortgage for five to seven years, it makes little sense to pay a higher rate to lock the loan for a longer period.
ING Direct Rates
ING’s rates are very competitive. Since they only offer ARM products, their mortgages fall on the lower end of the rate scale. In addition, they maintain a policy of not charging points which means that their low rates are real. You get a low rate from them without having to buy it down to get there.
ING also offers a generous rate lock policy. When you take out an Orange Mortgage for a new purchase, they will lock your rate for 60 days, giving you the time you need to close your new home transaction. They also include 45 days rate locks on refinance mortgages. This insulates you from changes in the interest market while you are going through the process of closing your loan.
Sizing ING Refinances
ING Direct’s Orange Mortgage is different from other lenders in that it does not follow the traditional “conforming” loan limit of $417,000. ING Direct mortgages are available at preferential rates all of up to a loan balance of $750,000. For borrowers who need more than $750,000, ING Direct offers the same loan programs but just at slightly higher rates. While rates vary depending on market conditions, you can expect to pay a rate that is roughly 10 percent higher for a large loan. In other words, if ING’s rate for a $250,000 mortgage is 4.0 percent, $900,000 loans should carry rates of approximately 4.4 percent.
While ING is aggressive about their loan limits, their loan-to-value ratios are conservative. Since they do not participate in private or government low down payment programs, their mortgages and mortgage refinances do not go over a traditional 80 percent LTV ratio. In other words, if you want to borrow $250,000, your home will need to be worth at least $312,500.
ING Easy Orange Mortgages
In addition to innovating in jumbo lending, ING Direct also offers a unique Easy Orange Mortgage program. This is a 30-year amortization loan with a five or ten year fixed rate period and the opportunity to automatically extend the time that the rate is fixed.
What makes the Easy Orange loan so unique is its bi-weekly payment plan. What ING does is to calculate a traditional 30 year loan’s monthly payment, divide it in two, and have you make a payment every other week. Doing this not only gives you the effect of making an extra payment every year but also reduces the amount of interest that you pay, since reduce your balance twice every month. This is an excellent product that can save you a great deal of money over the life of your mortgage.
Doing Business with ING Direct
ING Direct Orange Mortgage has always distinguished itself as being an internet-based lender. In fact, their “Pajama Promise” encompasses a number of different features with the overarching theme that you can do business with them in your pajamas. At the same time, you can also get face to face with them at their ING Direct cafe-style branches. There are eight of them located in eight cities from New York to Honolulu to St. Cloud, Minnesota. Their merger with Capital One should expand their presence by letting you also do business with them through Capital One bank branch locations.
ING Direct’s Orange Mortgage and Easy Orange mortgage products are different from what many other financial institutions offer. In exchange for focusing on qualified customers that meet their business approach, ING Direct offers low rates, easy online execution and very low closing costs. At the same time, they also have customer friendly terms and payment options. If you are looking to refinance a traditional 80 percent LTV mortgage, call or click over to ING Direct to see how their programs match up with your needs.
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