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Pay-Option ARM

This loan type is called an Option ARM for the reason that every month there are three to four payment options on the mortgage statement. Due to a low introductory start rate of an Option ARM, borrowers can qualify for larger loan amounts. ARM refers to adjustable rate mortgage which offers added flexibility.

Minimum payments, which are set at twelve month intervals, can keep your payments affordable, but are not sufficient to pay the interest due. Deferred interest is accrued onto the principal loan amount. A payment cap (maximum mortagage amount) limits how much it can increase or decrease.

Interest only will avoid deferred interest; interest on the loan is paid based on changes in the ARM index while the principal is paid off when the loan term ends. Fully Amortizing Payment  thirty years with fully amortizing payments both principal and interest are kept on loan schedule, payments are calculated monthly through the fully indexed rate. Accelerated Amortizing Payment (fifteen years):  If you prefer to pay the loan on an accelerated schedule, and can afford higher monthly payments, fifteen year payment option allows you to repay the loan twice as fast and save more than half the interest cost of a thirty year loan.

Mortgage Rates NY will be happy to advise you on what loan type and program is right for you. 

Call Mortgage Rates NY today, at (888) 996-9529.