1.0% Option ARM Example

Home Loans

1.0% Option ARM Example
(presented by www.refinance-refinance.net - mortgage lenders)

By Ben Afzal

Basics This type loan has the following factors:

Initial payment rate
Initial payment
First payment adjustment
Initial note rate
Maximum deferred interest
Potential recast
Index
Margin
Qualifying rate
Note rate adjustment
Maximum debt to income ratio

Initial Payment Rate This is the minimum payment the loan offers. In this example, the minimum payment rate is 1.0%. The actual interest rate on this loan is the interest rate plus margin on the loan, which can be over 6% or 7%. The difference between the minimum payment and the interest only payment is added onto the principal of the loan.

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HOME LOANS ADVERTISEMENT

Initial Payment The initial payment is the actual monthly mortgage payment made. This payment is at the 1% payment rate. Use a mortgage calculator to get this number.

First payment adjustment

This is the first time the loan

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