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tagged: adjustable-rate mortgage, arm index, deferred interest, minimum payment, optional adjustable-rate mortgageInterest-Only Payment on an Option ARM
Posted by GuestPoster in Personal Finances
This type of payment on your optional adjustable-rate mortgage can be very confusing, but a little bit of clarification and understanding can make it all better. This interest-only payment allows you to avoid deferred interest when one of the other options, minimum payment, does not cover the monthly interest amount that is due. The one exception where this kind of payment is not available to choose from is if your interest-only payment added up together does not equal up to or above your minimum payment. Unfortunately, even if you get to pay this mortgage, your principal balance will not reduce at all, and that should be taken into consideration before deciding to use this as a monthly form of payment. Payments can change monthly due to differences in the ARM index. Looking for more information on mortgages, visit Portland Mortgage Brokers for tons of tips and advice.
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