Flex Mortgage

Flex mortgage products have been developed by several lenders. Flex mortgage products are used on my home and investment property.

An issue for many is managing income and expenses. Income varies and expenses come up. Our mortgage payment is our largest monthly expense, and the least flexible. Flex mortgage products are designed to give control over your mortgage payment. Choose one of four flex mortgage payment options monthly based on your cash flow needs.

Flex Mortgage Minimum Payment A flex mortgage payment is set for 12 or 60 months at a greatly reduced rate. The minimum payment rate for the 12 month flex mortgage option is 1.00% and the 60 month flex mortgage option is 1.90%. This maximizes cash flow and may also defer payment of interest allowing greater flexibility in managing your tax deductions. Plus, this minimum payment on your flex mortgage can not increase by more than 7.5% each year. Read about the important tax considerations of a flex mortgage. For concerns over deferred interest, read about the small amount of appreciation required to offset it. Read about Flex Mortgage Closing Costs

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 may make a principal and interest payment based on a 30 year or 15 year payment schedule. I have included a Flex Mortgage statement as well.

The product allows you to choose your index based on your own needs. You can chose from the 1 month LIBOR (London Interbank Offered Rate) or the MTA (12 Month Treasury Average).

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 for the additional security of a fixed payment while still taking advantage of the extremely low payment rates, there is a 5 year fixed payment option. With the 5 year Fixed Payment, you are guaranteed a fixed minimum payment for five years. You still have the four payment options to select from to manage cash flow. And, you may increase the term of your loan from 30 to 40 years lowering your payment even further. LTVs are 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 on the flex mortgage 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
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 an Adobe document detailing how this program works. Send me a quick email requesting a copy of "Understanding the Flex Mortgage".

Here is a useful Flex Mortgage payment calculator

Read very important information about Flex Mortgage 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.

Prequalify for your Flex Mortgage

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