If your budget is being pressured by rising rates and increased minimum payment requirements there are a number of mortgage products designed to give you extra breathing room.
Often referred to as option arms or misleadingly as 1 percent mortgages, the irresistible attraction is the low minimum monthly payment. These products are also popular with savvy investors looking for maximum cash leverage.
Here's some examples of payments available
with a five-year option arm. The payments quoted are FIXED for FIVE years and include interest rate caps for the life of the loan.
Five year fixed payment*
*Payments based on a 1.95 percent start rate and a 40 year amortization with a 6.875 percent APR that is subject to change
Warning: Do not jump into this product without understanding the risks as well as the advantages. Speak with a professional that knows how to clearly explain all the details.
Some people who are great candidates for this loan product are self- employed or commissioned borrowers who experience fluctuations in their income from month to month.
The minimum payment can be made during slow periods while principal reduction can be achieved when extra funds are available.
The option arm mortgage is also valuable to young professionals expecting to realize income growth each year. Qualifying for a larger home now can save buying and moving expenses later as well as optimize tax advantages.
If you believe, as many experts do, that mortgage rates are approaching a peak, would you want to lock into a long term fixed rate at today's levels?
Adjustable rate mortgages were originally designed to save money when fixed rates have risen in anticipation of stable or declining rates.
There is no such thing as a one-size-fits-all mortgage and innovative mortgage products are constantly being introduced to accommodate different borrower circumstances and interest rate environments.
Your home mortgage is one of the most important financial decisions in your life. Make sure it doesn't end up being a costly mistake.
If you would like to enjoy the confidence of knowing that the best mortgage specialists in the business are serving your best interests call (561) 745-5575 in Jupiter or (772) 335-5556 in Port St Lucie and make an appointment for a free mortgage planning session.
We are also proud to announce the opening of our new office in Brevard, N. C. to service your vacation home needs.
Daniel J. Poulos is the president of Elite Lending.