1% Pay Option ARM Loans
If you've ever heard of a 1% pay option arm loan you know there are huge advantages and disadvantages. You need to be fully aware of all facets of these unique program before deciding upon it for your mortgage.
A 1% Pay Option ARM loan gives you 4 payment options:
-30 yr fixed payment option
-15 yr fixed payment option
-Interest only payment option
-a neg. am. payment equal to 1% interest
The last option allows you to pay less interest than you owe in any given month. This payment while being ultra low, will get you in trouble if you only pay it every month and never pay the other options. Your principal balance will actually increase and you can end up owing more than you originally borrowed!
1% pay option ARM loans are adjustable mortgages from day 1. If interest rates go up, so does your payment. This product is a great option for someone that understands the potential downside of the loan.
For this type of loan we highly recommend you allow us to explain it to you in more detail. As stated above, it's a great product for someone that fully understands it.
We also recommend you look at the Fixed pay option loan, it may be a better fit.
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