Pay Option ARM Program - The pay option ARM program can be an excellent mortgage program for someone who needs to pay down credit card debt, but cannot qualify for a Cash-Out Refinance.

The pay option ARM program frees up a tremendous amount of cash flow.

Pay option ARMs are a great way to manage your cash flow. However, keep in mind that, when you make minimum payments, you are not paying all the interest due for that month. This unpaid interest is added to your mortgage balance.

Pay option ARM mortgages can be used to refinance your current mortgage or to finance a home purchase. Pay option ARMs are also known as option ARM, 12 month MTA, cash flow ARM and other titles.

Option arms or the pick your payment loan can adapt to fit your lifestyle. They offer flexible payment options and qualification standards. Investors like them for there low payments and cash flow potential.

Pay Option Arms are good for investment properties, where a higher cashflow is desired in the first few years of ownership.

This loan very popular with borrowers who are self-employed, work on commssion or have variable income sources. They enjoy the payment flexibility that the PO ARM program offers. In a month when income is low and money is tight there is the minimum payment to fall back on as conversely in a month where things are good they can make a higher payment.

Pay option ARMS usually have hard pre pay penalties that range from 1-3 years. Ask your mortgage broker about different pre pay options and how they will fit into your future financial plans.

A few words of caution: If you choose to pay the minimum payment option, your payment will not cover the cost of the interest payment and your loan balance will increase. This is called Negative Amortization. If you find yourself with a negative amortization option arm, you'll be adding to your mortgage debt every month. The difference between the minimum payment and the interest-only payment is not discarded - it goes back into your principal loan amount - in effect growing the amount you owe every month. It's best to only use the minimum payment option in the case of a tight money month.

Pay Option Arms are fantastic opportunities for Apprentice workers to purchase a home they will be able to afford 3-4 years from now when there apprenticeship is done, right now.

Most homeowners consider Pay Option ARM for one or more of the following advantages this mortgage program offers:

1. To be able to buy more home with the same income
2. To be able to allocate a bigger portion of income towards other debts
3. To have control over tax deductability of mortgage interests from year to year
4. To off set seasonal incomes
5. To take advantage now of anticipated increase in income

A Pay Option ARM is one of the fastest growing mortgage products available. This program allows the borrower the most flexibility with their mortgage payment each month by allowing, usually, 3-4 different payment options on each mortgage billing statement each month. Option 1 is generally the lowest payment option which can incur negative amortization. Option 2 is usually an interest only mortgage payment. Option 3 may be a 15 year mortgage payment. Finally Option 4 may be a 30 year mortgage payment. The Pay Option ARM is great for self-employed and commissioned borrowers who may not receive a steady income. This gives these borrowers the opportunity to pay incredibly low monthly mortgage payments during slow months and pay their normal payments during the other months.

Pay Option ARM Program
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