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Virginia Option ARMsOption ARMs products, available in Virginia, are available from several lenders. I have converted my Virginia home and investment property to Virginia Option ARMs. An issue for many homeowners is managing income and expenses. Income varies and unplanned expenses come up. Our mortgage payment is our largest monthly expense, and least flexible. The Virginia Option ARM was designed to give you control over your mortgage payment. Choose one of four payment options each month based on your cash flow needs. Email Virginia Option Arms questions. Minimum Payment A payment is set for 12 or 60 months at a 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 on your mortgage allowing greater flexibility in managing your tax deductions. This minimum payment can not increase by more than 7.5% each year. Read about the important tax considerations of Virginia option arms. If you have concerns over deferred interest, more about the small amount of appreciation required to offset it. Interest Only Payment Defer paying principal 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 may make a principal and interest payment based on a 30 year or 15 year payment schedule. I have included a Virginia Option ARMs statement as well. The 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 Options If you want the additional security of a fixed payment while taking advantage of the low Option ARM payment rates, there is a 5 year fixed payment option. With the 5 year Fixed Payment Mortgage, you have 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 have the ability to increase the term of your option arm from 30 to 40 years lowering your payment further. 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 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
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 Option Arm". I have added a website dedicated solely to Option Arms.
Here is a useful
Option Arm
payment calculator
Read very important information about
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