Article: Secrets Of The Option ARM Loan
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Secrets Of The Option ARM Loan
How Does an Option ARM Loan Work?
Option ARM (also called Pick A Payment or Pay Option ARM) loans work by providing the borrower with four payment options each month.
Before we get into the payment options, let's review some of the important terms and concepts involved with this loan program.
ARM - Adjustable Rate Mortgage. An ARM is a mortgage whose interest rate is raised or lowered at periodic intervals according to the prevailing interest rates in the market. Also called variable-rate mortgage.
Principle - The original amount of money provided in a loan is the principle. This amount, plus the interest accrued must be paid back in full by the end of the loan's term.
Interest - Interest is the cost paid to borrow ...
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