110% Negative Amortization Loans
110% Negative amortization loans are available from several lenders. I have converted my home and investment property to 110% negative amortization loans. I am a mortgage broker specialized in 110% Negative Amortization Loans with 37 lenders offering 110% Negative Amortization Loans to ensure you get the best loans for your specific situation
An issue for many is managing income and expenses. Income varies and unplanned expenses come up. Our mortgage payment is our largest expense and the least flexible. 110% negative amortization loans were designed to give you control over your mortgage payment. Choose one of four payment options each month based on your cash flow needs.
Minimum Payment A payment is set for 12 or 60 months at a reduced rate. The minimum payment rate for the 12 month option is 1.00%, and the 60 month option is 1.90%. This option maximizes cash flow and may also defer payment of interest allowing flexibility in managing your tax deductions. This minimum payment can not increase by more than 7.5% each year. Negative amortization is the difference between the minimum payment and the interest only payment. This difference is added to your mortgage balance and most lenders will cap your negative amortization balance at 110% of your original balance. However, I am seeing some versions with a 125% balance cap. Read about the important tax considerations of 110% negative amortization loans. If you have concerns over deferred interest, read about the small amount of appreciation required to offset it.
Interest Only Payment Defer paying principal and improve cash flow. This option is not available if the interest only payment is less than the minimum payment.
Fully Amortizing Payment Options You have the ability to make a principal and interest payment based on either a 30 year or 15 year payment schedule. I have included a 110% negative amortization loans statement.
The Option Arm allows you to choose your index from the 1 month LIBOR or the MTA.
Here is a 10 year average comparison between a 30 year fixed and fully indexed LIBOR, MTA, COFI, and the 1 year Treasury Index in chart form.
Additional Options If you want the security of a fixed payment while taking advantage of the low negative amortization payment rates, there is a 5 year fixed payment option. With the Option ARM 5 year Fixed Payment, you have a fixed minimum payment for five years. You have the four payment options to select from monthly to manage cash flow. Increase the term of your option arm from 30 to 40 years lowering your payment further. LTVs are available up to 100%
The Minimum Payment Advantage The example below is based on a $400,000 mortgage. It compares a traditional 30 year fixed rate payment based on the above 10 year average to the minimum payment based on the 10 year average. Assumes that the Minimum Payment increases by the maximum 7.5% per year.
30 Fixed Minimum Monthly Savings Annual Savings
Savings over 3 years $52,872
I have developed a document detailing how this program works. Send me an email requesting a copy of "Understanding 110% Negative Amortization Loans".
I have a website dedicated to the 110% Negative Amortization Loans
Here is a useful 110% negative amortization loans payment calculator
Read important information about 110% Negative Amortization Loans Prepayment Penalties
Read more about 110% negative amortization loans Closing Costs
I have an article "Buying your home in 2008" by email explaining negotiating strategy in today's market.
As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your consumer and mortgage debt is structured today can have a life changing effect in the years to come. Read more about this free, no obligation service.
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