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Best Option per month for Option ARM?
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   Types of Loan Programs-> Pay Option ARM, Pick-a-Payment, Cash Flow LoanMessage format
Posted 7/26/2006 9:59 AM (#1229)
Subject: Best Option per month for Option ARM?
Hi All,

I have considered Option ARM to be my loan type of the house.

Since it is having four options each month, I kind of get confused whether to put the minimum or something else.

For Example: If I have 3000 in pocket one of the months, which of the following is the best to pay and why?

A- Still pay the minimum (1000$)
B- Pay interest Only (1500$)
C- 15 Year Full Amo. (2900$)
D- 30 Year Full Amo. (1800$)

I asked two mortgage experts and they say it does not make sense to pay any extra money than the minimum for the first few years.

what's the calcuation behind it? Can some one please brief on that?

One thing in this ARM is we may add interest to the capital each month right? so, it really does not make sense to pay some capital after some time.. but then too, I want to get expert advise..

Posted 7/27/2006 7:27 PM (#1234 - in reply to #1229)
Subject: RE: Best Option per month for Option ARM?
if you pay the minimum payment you will owe more money than you took out. NEG-AM some serious research before gettin into this loan. I would only recommend if you plan on sellin in a year or so. And don't let your "mortgage professional" lock you in a 3 year pre-pay on one of these.
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