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Fixed Payment Option LoansFixed Payment option loans are flexible. Fixed payment option loans are my choice for my home and investment property. Fixed payment option loans help manage monthly income and expenses. Fixed payment option loans give you control over your mortgage payment. Income varies and unplanned expenses come up. Our mortgage payment is our largest monthly expense, and the least flexible. Choose one of four payment options monthly based on your needs. Request a copy of "Understanding Fixed Paymet Option Loans" by email. It is an Adobe document explaining how the 5 year option arm works. Fixed Payment Option Loans Minimum Payment A minimum payment is set for 60 months at a greatly reduced rate. The current minimum payment rate is 1.90%. This option maximizes cash flow and may defer payment of interest allowing greater flexibility in managing tax deductions. Read about the important tax considerations of fixed payment option loans. For concerns over deferred interest, read about the small amount of appreciation required to offset it. Fixed Payment Option Loans Interest Only Payment Defer paying principal and improve your cash flow. This option is not available if the interest only payment is less than the minimum payment. Fully Amortizing Payment Options Make a principal and interest payment based on either a 30 or 15 year payment schedule. I have included a 5 Year fixed payment option loans statement. You may choose your index from either 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 You also may want to increase the term of your loan from 30 to 40 years lowering your payment even further. This is the approach I use on my own loans. If I want to use the minimum payment, I want that number as low as possible. LTVs are now 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 available based on the 10 year average. Assumes that the Minimum Payment increases by the maximum 7.5% per year. 30 Fixed Cash Flow Minimum Monthly Savings Annual Savings Year 1
$2,855
$1,287
$1,586
$18,816
Savings over 3 years $52,872 Read more about Fixed payment option loans Closing Costs I have recently added a website dedicated solely to Fixed Payment Option Loans. Read very important information about Fixed Payment Option Loans Prepayment Penalties 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. New! View my Wealthbuilder presentation and learn the safe way to manage your debt and fund your retirement.
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