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Payment Option Mortgage

Payment Option Mortgage products are flexible. I have converted my home and investment property to a payment option mortgage.

An issue for many is managing income and expenses. Income varies and unplanned expenses come up. Our mortgage payment  is our largest expense, and the least flexible. The payment option mortgage was designed to give you control over your mortgage payment. Choose one of four payment options each month based on your needs.

        Payment Option Mortgage Minimum Payment    A payment is set for 12 or 60 months at a reduced rate. The minimum payment rate for the 12 month version is at 1% and the 60 month option is at 1.90%. This maximizes cash flow and may also defer payment of interest allowing greater flexibility in managing your tax deductions. This minimum payment option can not increase by more than 7.5% each year. Read about the important tax considerations of a payment option mortgage. If you have concerns over deferred interest, read about the small amount of appreciation required to offset it.

        Interest Only    Defer paying principal and improve cash flow. This choice is not available if the interest only payment would be less than the minimum payment.

        Fully Amortizing Choices    You may make a principal and interest payment based on either a 30 year or 15 year payment schedule. I have included a Payment Option 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 comparison between a 30 year fixed and fully indexed LIBOR, MTA, COFI, and the 1 year Treasury Index in chart form.

Additional Choices    If you want the security of a fixed payment while taking advantage of the extremely low rate, there is a 5 year fixed payment version. With the 5 year Fixed Payment, you have a fixed minimum for the first five years. You  have the four payment options to select from to manage cash flow. And, you also have the ability to increase the term of your loan from 30 to 40 years lowering your payment even further. LTVs on the Payment Option Mortgage are 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 based on the above 10 year average to the minimum payment available on the product again based on the 10 year average. Assumes 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 detailing how this program works. Send me an  email requesting a copy of "Understanding the Payment Option Mortgage".

Please email me with any questions about the Payment Option Mortgage

Learn more about Payment Option Mortgage Closing Costs

I have added a website dedicated solely to the  Payment Option Mortgage.

Here is a useful Payment Option Mortgage payment calculator

Read very important information about Payment Option 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.

    Payment Option MortgagePrequalify for your Payment Option Mortgage

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