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Payment Option ARM 40 Year
Nationwide Mortgage Loans offers a few different payment option arms, including a purchase option that includes a start rate of 1.25%. Borrowers can change which type of payment they want to make each month.
The payment option arm allows you to select a payment option each month.
- 40 Year- Principal & Interest (Fully Amortized Payment)
- Interest Only Option
- Negative Amortization Option
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Get a break with mortgage payments that start out over 40% lower than traditional 30 year fixed rate payments! |
Full Documentation or Stated Income Options: Apply Now
Negative amortizations are controversial, because the low payment option adds up to an increased mortgage balance at the end of the year. It all comes down to.
Will your home gain more equity than it looses with the negative amortization?
Negative AM Payment Example:
*$400,000 First Mortgage at 1.25% Intro
Monthly Payments at $ 1,333.01
40 Year - Fully Amortized Payment Example:
$400,000 First Mortgage at 6.5%
Monthly Payments at $ 2,341.83
Payment Option ARM: Negative Amortization Mortgages: |
The benefits of an option ARM are low payments and the fact that rates and payments may go down if rates improve. You may also qualify for higher loan amounts and there are no balloon payments.
One of these payment options allows you to pay less than the interest, which means an increasing mortgage balance instead of the principle being paid down. There are inherent risks to this, but you have more flexibility and they may be a good decision if your home equity increases faster than the negative amortization. |
Finance Tips and Loan Advice
Benefits:
Lower intro rate
Low payments can increase home-buying power
7% Cap of payment increases for first 5 years
Concerns:
Loss of Equity with negative amortization
Limited second mortgage options for future refinancing
- Cash Out Refinance
- Stated Income Second Mortgages
- Debt Consolidation of High Rate Credit Cards
- Low Rate Home Equity Loans
*1.25% for $400,000 is an Intro rate of First Mortgage that may cause negative amortization resulting in loss of home equity.
Don't wait any longer, Call 1-877-212-9478 to speak with a seasoned loan professional live. We offer a helpful consultation that includes a free loan quotes with no obligation. |
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ARM vs. Fixed Rate Calculator
How does a fixed rate 1st or 2nd mortgage compare to an adjustable rate mortgage or home equity line of credit? |
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