Virginia Interest Only ARM
I am a Virginia Mortgage Broker specializing in Virginia interest only
ARM mortgages. An Interest only ARM can be an excellent choice for many Virginia borrowers.
Interest only ARM products are designed to offer the lowest payment possible as you are not paying
toward the principal in your normal monthly payment. Because of the
lower payment, the interest only ARM may mean that you can buy more Virginia home than
with a fully amortizing mortgage. Of course, you may make additional payments
toward your principal balance at any time.
The interest only arm product was originally designed for individuals whose income is
cyclical. For example, an individual who is a sales executive with a relatively
low base salary but commission or bonus payouts quarterly would benefit from an
interest only mortgage. You would have the lowest possible payment during months
when no bonus is paid and you would be able to make contributions to the
principal balance when the quarterly bonus is paid. However, I am seeing
individuals in many situations choosing this option as a method of lowering
their payment, sometimes significantly.
Generally, interest only ARM mortgages are available for a 30 year
term, with the first 5 or 10 years interest only (depending on the lender
selected) and the final 20 to 25 years fully
amortizing although I am now seeing some progressive lenders offering this
option on ARMs. Some lenders who offer an interest only
mortgage
require a
prepayment penalty for the first 1-3 years and have caps on the amount your rate
can change at any time and over the life of the loan. I always try very hard to
avoid prepayment penalties on these and other types of loans and can usually
work around the requirement. Another useful feature of some interest only
mortgages is that if you choose to make a principal payment during the interest
only period, your balance is reduced the following month lowering your payment
further.
Again, an interest only
ARM mortgage is not the right choice for everyone, but it can be a very effective
choice for some individuals. Please give me a call or send an email
and I will be happy to discuss this alternative with you.
An example of how powerful this tool can be:
On a $250,000 mortgage at 6.000% for 30 years-
Principal and Interest payment= $1498.88
Interest Only mortgage payment at 6%= $1250.00
Total Monthly savings= $248.88
If you want to make the comparison for your own specific
situation, calculators to find the
amortizing payment are available on this website. The math to find the simple
interest payment is, Loan Amount x Interest Rate / 12.
Of all of the programs available, the Cash
Flow Interest Only ARM offers the greatest flexibility by far.
New! I
have just developed a short PowerPoint presentation in .pdf format on it,
some real world examples, and some suggestions on how best to use them available
by email
As a
Certified Mortgage Planning
Specialist, I offer an analysis of
your situation today can make suggestions on how small changes in how
your debt is structured today can have a life changing effect in the years
to come. Read more
about this free, no obligation service.
New!
 Prequalify
for your Virginia interest only ARM.
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