What should I keep in mind when it comes to an I-O mortgage payment or a payment- option ARM?

Both types of loans can be flexible and allow you to make lower monthly payments during the first few years of the loan. You can repay […]

Does the type of loan and loan payment plan make much difference?

Yes. . . for both the growth of your investment in your home and the amount of your monthly payments during the term of the loan. […]

What are some important target dates in an I-O mortgage or a payment-option ARM?

•   Introductory period. Many option ARMs have a 1-month or 3-month introductory period at the beginning of the loan. During this period, lenders use a […]

What are the alternatives to I-O mortgage payments and payment-option ARMs?

If you are not sure that an I-O mortgage payment or a payment-option ARM makes sense for you, there are several other alternatives you could consider. […]

When might an I-O mortgage payment or a payment-option ARM not make sense?

Interest-only or option-ARM minimum payments may be risky if you won’t be able to afford the higher monthly payments in the future. For example, suppose you […]

What are the risks with I-O mortgage payments and payment-option ARMs?

• Rising monthly payments and payment shock. It is risky to focus only on your ability to make I-O or minimum payments, because you will eventually […]

What is a payment-option ARM?

A payment-option ARM is an adjustable-rate mortgage that allows you to choose among several payment options each month. The options typically include a traditional payment of […]

What is an I-O mortgage payment?

Traditional mortgages require that each month you pay back some of the money you borrowed (the principal) plus the interest on that money. The principal you […]

Interest-Only Mortgage Payments and Option-Payment ARMs

Owning a home is part of the American dream. But high home prices may make the dream seem out of reach. To make monthly mortgage payments […]
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