No-Refi Rate Drop

(a) (1) The No-Refi Rate Drop is a feature available on the following fixed-rate mortgage products with Navy Federal Credit Union: Homebuyers Choice, Military Choice, or 15- and 30-year Jumbo Fixed loans (collectively, "Covered Loan Products"). This feature modifies certain rights and obligations under the Note and Security Instrument for your loan solely with regard to the interest rate, as described in this disclosure (the “Rate Reduction”). It does not entitle you to receive cash out and is not available on any cash-out refinance transactions.

(2) When eligible, the Rate Reduction works by reducing the existing interest rate applicable to your loan by a calculated amount based on current Navy Federal rates, resulting in a new reduced rate. Your existing interest rate in effect for your loan will be the interest rate stated in your Note subject to any previously exercised and approved Rate Reduction option requests (“Note Rate”). The eligible reduced interest rate will be calculated by determining the applicable interest rate for your loan product in effect at the time you request to exercise the Rate Reduction option (“Base Rate”), adjusted to reflect the specific characteristics of your loan (“Eligible Reduced Rate”). Any origination or discount points used to obtain your Note Rate will not be applied to the Eligible Reduced Rate calculation. The rates published on Navy Federal’s website and other marketing materials are “as low as” rates and typically reflect origination and discount points; therefore, the Base Rate used to calculate your Eligible Reduced Rate may be higher than Navy Federal’s advertised rates.

(b) To be eligible to exercise the Rate Reduction option and receive a reduction to the interest rate on your loan, you must meet all the following criteria:

(1) You must contact us and request to exercise the Rate Reduction option; (2) the Eligible Reduced Rate for your loan must be at least 0.25% lower than your Note Rate when you request to exercise the Rate Reduction option; (3) your loan must be current with no more than 1 monthly payment, which includes principal, interest, taxes, and insurance, that has been 30 days late or more within the last 6 months of your request; (4) you have made at least 6 consecutive monthly payments, which includes principal, interest, taxes, and insurance, on your loan since closing or the last time you exercised your Rate Reduction option; (5) you do not have an active bankruptcy case pending or you have not filed for bankruptcy protection within 6 months prior to your request; (6) your loan is not in an active loss mitigation option, process, or consideration; and (7) there have been no transfers of ownership and you continue to own the property.

(c) You must pay a $250 fee each time that the Rate Reduction option is exercised. There is no limit on the number of times the Rate Reduction option can be exercised if all applicable criteria are met each time.

(d) Exercising the Rate Reduction option will permanently reduce your Note Rate, as well as the remaining principal and interest payments on your loan, but will not modify any other terms contained in your loan documents, including the principal balance, maturity date, and additional amounts due for escrows as part of your monthly Periodic Payment under your Security Instrument.

(e) RATES AND TERMS ARE SUBJECT TO CHANGE AT ANY TIME WITHOUT NOTICE. To exercise the Rate Reduction option, you must contact Navy Federal. You are solely responsible for maintaining your eligibility status and determining when to exercise the Rate Reduction option, subject to the eligibility criteria identified above. Contact Navy Federal at 1-703-255-8665, Option 1 to check your eligibility and your Eligible Reduced Rate. Navy Federal will only reduce the interest rate of a Covered Loan Product under the Rate Reduction option if all applicable criteria are satisfied at time of your request to exercise the option and the fully executed Rate Reduction Exercised Option Agreement was returned within ten (10) business days from the date of such agreement. These terms and conditions do not constitute a commitment to lend, nor a guarantee that you will be approved for a mortgage loan from Navy Federal Credit Union.

(f) Choice loan products require a 1% origination fee, which may be waived for a 0.25% increase in the interest rate; they are subject to a funding fee of 1.75% of the loan amount; and the funding fee can be financed into the loan up to a maximum of 101.75% LTV, or the fee can be waived for a 0.375% increase in the interest rate. Purchase loans require no down payment in most states. LTV restrictions apply to refinance and non-primary residence loans. One active Choice loan is permitted per member. All loans subject to approval. To be eligible for a Military Choice loan, at least one borrower must be Active Duty, Reservist, or a Veteran.

Product features subject to approval. Available for purchase loans only. Occupancy restriction applies. Subject to funding fee, which may be financed up to the maximum allowed loan amount.