Power Option ARM
Power Option ARM products are flexible. I have converted my home and investment property to the Power Option ARM.
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 Power Option ARM was designed to give you control over your payment. Choose one of four payment options monthly based on your 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 maximizes cash flow and may also defer payment of interest allowing greater flexibility in managing your tax deductions. Plus, this minimum payment can not increase by more than 7.5% each year. Read about the important tax considerations of an option power arm. 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 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 Power Option ARM statement as well.
The Power Option Arm series 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 Power Options If you want the additional security of a fixed payment while taking advantage of the low Option Power ARM payment rates, there is also a 5 year fixed payment option. With the 5 year Fixed Payment, you have a fixed minimum payment for five years. You still have the four options to select from to manage your cash flow. 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 based on the10 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
I have developed an Adobe document detailing how this program works. Send me an email requesting a copy of "Understanding the Power Option Arm".
Please email me with any questions about the Power Option Arm
Learn more about Power Option Arm Closing Costs
I have added a website dedicated solely to the Power Option Arm.
Here is a useful
Option Arm payment calculator
Read very important information about
Power Option Arm 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.
for your Power Option ARM
Read very important information about Power Option Arm 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 Power Option ARM