I’ve heard it said that these option loans are considered to be the “Best Cash Flow Loan in America.” Very prominent individuals that sit in key positions in our government would agree, and I share the same opinion. With higher qualifying power, lower payments, and payment options – What more can you be looking for in a mortgage loan?
Option ARMs are a powerful financial tool that put you in control of your finances and cash flow. The strength is in the ability to choose your desired payment option every month. With an Option ARM, you decide how much to pay each time you send a payment:
Option ARMs are quickly becoming the most popular ARM product available today, and are known by many names and variations: Pay Option ARMs, Pick-A-Payment Loans, 1-Month Option ARMs, CashFlow Option Loans, Pay Option Loans, etc.
The Most Common Concerns About Option ARMs is Deferred Interest:
What is deferred interest?
With an options loan you may have payments that may not cover all the interest due that month on your mortgage. When that happens, you “defer” the extra interest by adding it to the outstanding balance of your mortgage.
Deferred interest may occur if:
However, the factors that cause deferred interest are also the factors that make this loan affordable:
How will I ever pay off my loan if deferred interest is causing my balance to go up?
While there are occasions when deferred interest can add to your loan balance, there are many other periods when your loan pays off faster than usual. Over time, these periods of deferred interest and faster payoff offset each other. Don’t forget if you are selling your home, you will have appreciation that will also offset any higher balance concerns.
Must I have deferred interest on my loan?
The simple answer is NO. This loan is controlled by YOU. With the four payment options available, you decide if you want to have deferred interest in any given month. These payment choices are clearly listed on the payment statement each month. You can, if you choose, pay all interest as it accrues, thereby avoiding deferred interest being added to your loan balance.
Electing not to pay deferred interest will mean more cash in your pocket. Choosing this option makes financial sense if it helps you:
Pay It Or Don’t Pay It – Either Way YOU WIN!
The truth is, mortgages cannot be isolated in today’s environment, but must be integrated with the rest of your financial planning process in order to be most effective.
Navigating the Pitfalls That Can Damage Your Credit Score
Your credit score is a crucial indicator of your financial health, often determining your eligibility for loans, credit cards, and even rental agreements. However, many individuals are unaware of the common missteps that can significantly lower their credit score. By understanding the factors that influence your FICO score and avoiding certain pitfalls, you can maintain and improve your creditworthiness.
Uncontrollable Debt Leads to Poor Health
Various studies show that people who have higher debt have a higher level of stress. In other words, our level of stress can be traced right back to the level of debt one has. Marriage and relationships are also impacted due to financial matters. Couples argue more about money than any other topic. The effects of debt can also account for feelings of guilt, shame, and a sense of powerlessness. Debt stress can be linked as far back as the Great Depression where lives were changed when the crash of the stock market caused some Americans to substance abuse and even death.
UNDERSTANDING YOUR LEGAL RIGHTS
Know you legal rights when it comes to dealing with debt collectors, and the credit reporting agencies. You have the right to sue!
