Friday, July 6, 2007

 

Pay Option Arms

Interest rates have risen steadily this past week as well as the week before. I expect that trend to continue with a typical 30 year fixed rate well in the 7% range shortly.

PAY OPTION ARMS - or otherwise known as a flex pay, 1% loan, minimum payment loan etc..... I have not always been a huge fan of this loan as it can have massive negative effects upon your loan balance in addition to the fact the true interest rate changes every month! Loan Originators typically sell this as a means to increase cash flow and advise to invest the difference. The truth is, it takes a very disciplined person to actually accomplish this.

There is a new twist on this pay option loan.... fixed % rate for five years - minimum payment is 50% of regular P & I payment - limited documentation programs available - you must understand these loans before you agree to one. Call me with questions if you are considering this type of loan. I have become well versed in explaining this difficult to understand program.

Labels: minumum payment loans, pay option arms

posted by Lewis Poretz  # 7/06/2007 01:23:00 PM

 

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