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Do you have control over your finances each month? Can you choose how much of your mortgage to pay depending on your cash flow and other expenditures? There is a mortgage program that allows just that every time you make a payment.  Some lenders call this a Payment Options Loan, others call it a Pay Option Loan or Option ARM.

Choose from these 4 PAYMENT OPTIONS each month and gain control of your monthly expenses.

  • Pay As Low As 1% each month
  • Interest-Only Payments
  • 30-Year Amortization
  • 15-Year Amortization

Be Weary.  Even while you have multiple payment options to choose from, interest still accrues on the loan each month.  Most Payment Option Loans (or Option ARMs) are variable rate loans based on one of the following indeces:

  • COSI: Cost of Savings Index
  • COFI: Cost of Funds Index
  • CODI: Cost of Depsits Index

    it is possible, but extremely rare that an OptionARM could be based on the following:
  • LIBOR: London Inter Bank Offered Rate
  • Prime: Interest rates banks are charged in the U.S.

You decide what to pay, each and every month. Pay a little. Pay a lot. With a Payment Options Loan it is up to you. Not all borrowers will qualify.

UPDATE: Wachovia and some other lenders are beginning to market a similar Payment Option loan product that is based on a Fixed Rate.  You can still choose to pay a small minimum monthly payment (as low as 1% in some cases), interest-only, or a payment based on 15 or 30 year repayment.  The difference with this new program is that interest accrues at a fixed rate rather than a variable one.

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