MTA Option ARM
MTA Option ARM products have been developed by several lenders. I have converted my home and investment property to an MTA Option Arm.
The MTA Option ARM was designed to give you control over your mortgage payment. An issue for many homeowners is managing monthly income and expenses, or "cash flow". Income varies and unplanned expenses come up. For many, our mortgage payment is our largest monthly expense, and also the least flexible. You can choose one of four MTA Option Arm payment options monthly based on your specific 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 but may also defer payment of interest on your mortgage allowing flexibility in managing your tax deductions. This minimum payment can not increase by more than 7.5% each year. Read more about the important tax considerations of an option arm. If you have concerns over deferred interest, read more about the small amount of appreciation required to offset it.
Interest Only Payment Defer paying principal and improve your monthly 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 full payment based on either a 30 year or 15 year payment schedule. I have included an MTA Option ARM statement as well.
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 payment rates, there is a 5 year fixed payment option. With the 5 year Fixed Payment option, you are guaranteed a fixed minimum payment for five years. You have the ability to increase the term of your option arm from 30 to 40 years lowering your payment further. MTA Option Arm LTVs are available up to 100% !
The Minimum Payment Advantage The example is based on a $400,000 mortgage. It compares a 30 year fixed rate payment based on the 10 year average to the minimum payment available on the Option ARM again 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
Savings over 3 years $52,872
Learn more about MTA option arm closing costs.
I have developed an Adobe document detailing how this program works. Send me an email requesting a copy of "Understanding the MTA Option Arm".
I have added a website dedicated solely to the MTA Option Arm.
Read very important information about MTA Option Arm Prepayment Penalties
Here is a useful MTA Option Arm 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 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 MTA Option ARM