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WHY A PAYOPTION ARM?
The PayOption ARM is a creative financial tool that can be used to increase cash flow when needed. Each month it offers payment flexibility that allows homeowners the ability to stretch cash as needed without having to tap more expensive financing. With a PayOption ARM you have the ability to defer a portion of the accrued interest on your loan when you choose to make the minimum payment required. This can significantly reduce your monthly mortgage payment, therefore keeping more cash on hand. Deferred interest may be repaid when desired and the balance protection cap ensures that the deferred interest is managed responsibly.
MONTHLY PAYMENT OPTIONS
These options will be available to you each month when you receive your monthly mortgage statement.
I. MINIMUM PAYMENT: this is the minimum amount that your lender will accept for your payment. The amount is determined from your last payment change date. If this amount is not sufficient to cover the amount of interest due, negative amortization will occur. The deferred interest is added to your loan balance.
2. INTEREST ONLY PAYMENT: The amount that would pay the interest portion of your mortgage payment at the current interest rate. The principal balance will not be decreased by making this payment. However, you can avoid negative amortization by making the interest only payment.
3. 15 YEAR AMORTIZED PAYMENT: The amount necessary to pay the loan off (principal and interest) within a 15 year term from the first payment due date in substantially equal payments. This payment amount is calculated on the assumption that the current rate will remain in effect for the remaining term.
4. 30 YEAR (or FULLY AMORTIZED) PAYMENT: The amount necessary to pay the loan off (principal and interest) at the maturity date, in substantially equal payments.
The PayOption ARM puts YOU the borrower in control of your finances. You can manage your money how you see fit with these 4 monthly payments options.
More Than Just A Mortgage
Become Your Own Financial Advisor!
If you have Credit Card Debt or other high interest loans, you know that paying the minimum monthly payment is just spinning your wheels. A PayOption ARM loan will free up that extra cash you need to start paying those balances down and improving your overall financial situation.
Also, if you've ever dreamed of owning that 2nd Home at the beach or Investing in Stocks, Bonds, Annuities or Real Estate, you can use the cash you save as additional capital to build your financial portfolio and increase your wealth for those retirement years.
Other benefits of a PayOption ARM:
• Flexible monthly payment
• Tax Planning
• Easier Qualifying
• Low Initial Rates
Here are the basic items Equidigm will need to process a Stated Income - PayOption
loan:
• 1003 Application completed
• Borrowers authorization form signed and completed
• Copy of drivers license for borrower(s)
• Copy of last two months bank statements (need to verify two months reserves)
• Homeowners Insurance Declaration Page
• 2 Yrs. Business license or CPA letter verifying that the CPA has filed your taxes for at least 2 years as self-employed
EQUIDIGM will notify you if additional items are required.
The TRUTH about "Negative Amortization!"
Negative amortization occurs when the monthly payments on a loan are insufficient to pay the interest accruing on the principal balance. The unpaid interest is added to the remaining principal balance due. Negative amortization can be avoided by paying the additional interest owed monthly.
Adjustable rate mortgages with payment caps and negative amortization are usually reamortized at some point so that the remaining loan balance can be fully paid off during the term of the loan. Most “ARM” loan programs have a limit on the amount of negative amortization allowed, usually no more than 110% to 125% of the original loan balance.
“Negative Amortization can be avoided by paying the additional interest owed monthly”
“Being informed is the ONLY way for you to determine which loan is best for you”
ARM loans that allow "Neg Am" can also increase home affordability and may even lower the cost of interest paid over other types of mortgages, provided that interest rates don’t persistently rise.
As with most any financial transaction, benefits often come with a level of risk. Being informed is the only way for you to determine which loan is best for you.
But when utilized properly and responsibly, a negative amortization loan can be a valuable tool in helping you better manage your monthly cash flow.
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