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SHORT-TERM MORTGAGES OFFER ADVANTAGES OVER TRADITIONAL FIXED-RATE MORTGAGES

 TROY, Mich., March 9 /PRNewswire/ -- Lower interest rates, lower monthly payments and increased flexibility are among the reasons why today's homeowners are considering short-term mortgages instead of traditional longer-term fixed-rate mortgages.
 "Short-term mortgages allow borrowers to tailor a mortgage to meet their particular needs and financial condition," said William R. Yaw, vice president of Standard Federal Bank (NYSE: SFB). "We expect short- term mortgages to be a more popular home financing option in the future, particularly as customers become more aware of the advantages they offer."
 A common short-term mortgage option is the 5/25 balloon mortgage which offers lower interest rates and lower fixed monthly payments for the first five years of the mortgage than is typically charged on a 30-year fixed-rate mortgage. The loan requires a large balloon payment at the end of the five-year term, but also includes a conditional right to refinance the loan for the remaining 25 years at a new fixed interest rate if the borrower meets certain conditions provided in the loan documents.
 "Short-term mortgages also may provide home buyers with more purchasing power than longer-term fixed-rate mortgages," added Yaw. The lower interest rates and lower monthly payments available with short- term mortgages allow the prospective homeowner to qualify for a mortgage more easily or even to qualify to borrow more money than they could with a long-term, higher-priced, fixed-rate mortgage.
 Short-term mortgages provide flexibility to transferees who plan to move within five to seven years, or first-time home buyers who plan to "move up" into a larger home within a few years. Also, since mortgages often are replaced or refinanced within seven years, short-term mortgages may be suitable for some homeowners, thus eliminating the need to pay the higher interest rates associated with long-term, fixed-rate mortgages.
 "The final decision about which type of mortgage is best for a homeowner will depend on a lot of factors," concluded Yaw. "But with the potential advantages of short-term mortgages over conventional long- term fixed-rate mortgages, a borrower should look carefully at short- term options."
 Not all financial institutions offer short-term mortgage options, but more and more lending institutions are recognizing their benefits and making them available to their customers.
 Standard Federal, headquartered in Troy, has current assets of $9.6 billion and operates 123 banking centers throughout Michigan, Indiana and Ohio.
 -0- 3/9/93
 /CONTACT: William R. Yaw Jr., vice president, Standard Federal Bank, 313-637-2520 or 800-643-9600/
 (SFB)


CO: Standard Federal Bank ST: Michigan IN: FIN SU:

JG -- DE017 -- 4611 03/09/93 15:25 EST
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Date:Mar 9, 1993
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