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Virginia Interest Only ARMI 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: 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 Learn more about investing 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! View my Wealthbuilder presentation and learn the safe way to manage your debt and fund your retirement. I hope the information on this page was useful to you. Please scroll down to view my Mortgage Market Guide. It is a weekly publication explaining the financial markets from a consumer's perspective that is available on this website or by email subscription. I have nearly 8,000 subscribers today and would be happy to have you as well. Your email address will never be used for any other purpose.
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