1 Month Arm

1 Month Arm products are flexible. 1 Month ARM products are used for my home and investment property. "Understanding the 1 month arm" is available by email.

1 month arm products help manage income and expenses. Income varies and unplanned expenses come up. Our mortgage payment is our largest expense, and the least flexible. Choose one of four payment options each month. Read important information about 1 Month Arm Prepayment Penalties

1 Month Arm Minimum Payment A payment is set for 12 or 60 months. The payment rate for the 12 month version is 1.00% and the 60 month is 1.90%. This maximizes cash flow and may defer payment of interest allowing flexibility in managing tax deductions. This payment can not increase by more than 7.5% each year. Read about the tax considerations of a 1 month arm. For 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 Make a full payment based on either a 30 year or 15 year payment schedule. I have included a sample statement that may be useful.

Choose from either the LIBOR or the MTA indexes.

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 For the security of a fixed payment while taking advantage of the low payment rate, there is a 5 year fixed minimum payment option. Increase the term of your loan from 30 to 40 years lowering your payment even further. LTVs are available up to 100% on 1 month arm products.

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. This example assumes that the Minimum Payment increases by 7.5% per year.

30 Fixed Cash Flow Minimum Monthly Savings Annual Savings

Year 1        $2,855                                $1,287                                        $1,586                                    $18,816
Year 2        $2,855                                $1,384                                        $1,471                                    $17,652
Year 3        $2,855                                $1,488                                        $1,367                                    $16,404

Savings over 3 years $52,872
Savings invested at 8% $56,885

I have added a website dedicated solely to the 1 month arm

Here is a useful 1 month arm payment calculator

Read very important information about Prepayment Penalties