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Pick A Paymentsm Mortgage

The Pick A Paymentsm mortgage is also described as an option or cash flow arm These products are being developed by several  lenders. I am so confident in this product, I have recently converted both my home and investment property to the Pick A Paymentsm  Mortgage. 

An issue for many homeowners is in managing your income and expenses, referred to as "cash flow". Income varies monthly for many reasons and unplanned expenses come up when least expected. For many, our mortgage payment  is our largest monthly expense, and the least flexible. The Pick A Paymentsm  Mortgage was designed to give you greater control over your mortgage payment. You can choose one of four payment options monthly based on your specific cash flow needs.

        Minimum Payment    A payment that is set for 12 or 60 months at a greatly reduced rate. The minimum payment rate for the 12 month option is 1.00% and the 60 month option is 1.90%. This option maximizes cash flow but may also defer payment of interest on your mortgage allowing greater flexibility in managing your tax deductions. Plus, 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 on your loan 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    You have the ability to make a principal and interest payment based on either a 30 year or 15 year payment schedule. I have included a Pick A Paymentsm  Mortgage statement as well.

The Cash Flow Arm series 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 are looking for the additional security of a fixed payment while still taking advantage of the extremely low Cash Flow ARM payment rates, there is also a 5 year fixed payment option. With the 5 year Fixed Payment Mortgage, you are guaranteed a fixed minimum payment for five years. You still have the four payment options to select from monthly to manage your 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 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 payment based on the above 10 year average to the minimum payment available on the Pick A Paymentsm  Mortgage 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

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 this new program works. Send me a quick email requesting a copy of "Understanding the Cash Flow Arm". I will send it by return email

Here is a useful Pick A Paymentsm  Mortgage payment calculator