What is a Pay Option ARM?
It is an adjustable rate mortgage that gives you the option of selecting how much to pay each month based
on the options listed below and your financial goals.
Who Can Benefit From a Pay Option ARM?
• Self Employed and Commissioned Borrowers – adjust your monthly payment according to your
monthly earnings.
• Borrowers With Consumer Debt – Lower home payments allow you to pay off higher
interest rate debt.
• Move-Up Homebuyers – Low Start Rate and Interest Only option gives buyers more home
purchasing power.
How Does it Work?
With the Pay Option ARM loan you have four payment options to select from each month. Each option has
unique advantages and you select the best one for your needs.
1. Minimum Payment – The lowest payment option (includes interest and principal, if applicable). Frees
up extra money and keeps monthly payments low.
2. Interest Only – Low payment option, keeps your monthly payment manageable while paying all
accrued interest.
3. Fully Amortizing Payment – Traditional loan payment designed to pay off both interest and
principal in 30 or 40 years.
4. 15-Year Fully Amortizing Payment – Provides faster equity build up and substantial savings on interest.
Designed to pay off both interest and principal in 15 years.
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