Can anybody tell me wht they think about Option ARM Minimum payment plan for refinancing home loans?

Question by Bolder: Can anybody tell me wht they think about Option ARM Minimum payment plan for refinancing home loans?
Trying to refinance my mortgage to keep my home during my divorce. Is this a smart move or very stupid?…Thanks!

Best answer:

Answer by MortgageGuy
It really depends on your financial situation, but yes there are many benefits with an Option ARM program…

This particular loan option is perfect for someone who needs the added flexibility of multiple payment options on a monthly basis…

If when going through your divorce, it is going to be hard to make a full prinipal and interest payment, then having the interest only, and ESPECIALLY the MINIMUM payment option makes alot of sense…

On top of that, depending on the lender you are working with, you can get an Option Arm that is based off the T Bill, rather then a traditional ARM loan that is usually a libor based product…

What that boils down to is the T bill has been very stable over the past 10 years.. The rates don’t move naywhere near as wuickly as what you see on a Libor Arm.. The Libor ARM has been increasing steadily over the past few years…

In all, yes the option ARM can be a great program if it suits what you need.. (lower payment options)

For someone that simply wants to pay the house off as soon as possible, an option ARM program may not be the best bet..

Now, do you have financing lined up? Are you currently working with a mortgage broker? I ask because i wonder why he/she hasn’t explained the pro’s and con’s of an option ARM progam..

If you are open to seeing hwat you qualify for, ill let you knwo that I work with multiple investors.. Each have their own versions of the Option Arm (all absed off T Bill) Some have low start rates, others have a very common 50% of your P&I Payment = your Minimum payment… (Most companies dont offer such a low Minimum option (it is usually around 65-70%)

My name is Jason Fry, I am a licensed Mortgage Originator for Providential Bancorp.. I would be happy to assist you further in determinig which loan program is best for you..

I have helped multiple here on this site both purchase a home, and refinance an existing mortgage as well.. Feel free to look over my profile page.. All of my answers are open to the public for viewing…

You can reach me at 312-264-6448 for more advice…

Thanks, and good luck to you!

Jason Fry
Licensed Mortgage Consultant
Providential Bancorp (serving most of the US)
312-264-6448

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