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Flex Pay Mortgage

Flex Pay mortgage products are just that, flexible. Flex Pay mortgage products are used on both my home and investment property. 

An issue for many is managing income and expenses. Income varies and unplanned expenses occur. Our mortgage payment is our largest expense, and the least flexible. The flex pay mortgage was designed to give you control over your mortgage payment. Choose one of four flex pay mortgage payment options 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 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. Read about the important tax considerations of a flex pay mortgage. 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 may make a principal and interest payment based on either a 30 year or 15 year payment schedule. I have included a Flex Pay Mortgage statement as well.

The product 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 still taking advantage of the low payment rates, there is a 5 year fixed payment option. With this option, you have a fixed minimum payment for five years. You still have the four options to select from to manage cash flow. You also may increase the term of your loan 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 loan. It compares a traditional 30 year fixed rate based on the above 10 year average to the minimum payment available on the product again 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

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 developed an Adobe document that goes into detail on how the product works. Send me a quick email requesting a copy of "Understanding the Flex Pay Mortgage". I will send it by return email

Read more about Flex Pay Mortgage Closing Costs

Read very important information about Flex Pay Mortgage Prepayment Penalties

Here is a useful Flex Pay Mortgage payment calculator

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 debt is structured today can have a life changing effect in the years to come.  Read more about this free, no obligation service.

    Flex Pay MortgagePrequalify for your Flex Pay Mortgage

 

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