Pay Option ARM

A pay option or cash flow mortgage type of loan is best for anyone who likes or needs flexible mortgage payments.

From a lending perspective, a pay option or cash flow mortgage is best for the self-employed borrower because monthly income is not always predictable. As a borrower, you may want the freedom of a low minimum monthly payment for slower months and you may want to pay a fully amortized 15-year payment when you have greater cash flow. As long as you can make the minimum monthly payment you will never make a late mortgage payment. With alternate conventional programs you may be locked into a fixed monthly payment. If you cannot fully meet the monthly payment obligation, you run the risk of having late payments on your credit report.

This product incorporates the LIBOR index with a margin. Each month your payment is determined by adding the index to the fixed margin. Your payment can change monthly, however, you have the stability of the fixed minimum payment as a safeguard.

When considering any loan program, determine what you want to achieve with your mortgage. There are many reasons to consider pay option or cash flow mortgages: If you are expecting a child, if you have a child going off to college, if you are planning on making home improvements, or if you are looking to invest your money, the pay option arm or cash flow mortgage may be exactly what you are looking for. This product gives you flexibility along with an extremely low minimum payment.

With a pay option or cash flow mortgage product the borrower determines when to pay down principal and when to make only the minimum payment. A highlight of this program is that your monthly statement calculates the different payments for you.

On a $225,000 mortgage look at these options!