is 6.5%, so you are going 2.5% negative against the interest in addition to paying $0 principle payments. So, let's say you borrowed $500,000 and made the minimum payment of $1666 for 5 years. At the end of 5 years you now owe about $566,000 on a loan you took out 5 years ago. Plus yoWell, I thought I had seen it all when the 40 year, then the 50 year mortgage was introduced. Now we have the Pay Option ARM Mortgage. Some companies market this loan under the name "SMART LOAN." I don't know if I will agree that the name SMART s necessarily an intelligent name to call it. A Pay Option ARM mortgage is somewhat complex and difficult for many consumers to adequately understand. A Pay Option ARM gives you monthly payment options, usually three. One payment choice is paying the principle plus as low as 1% of the interest. Another option is paying say 4% of the interest and no principle payment. Option 3 would be the true reality of it all being a Principle and Interest payment, just like a normal conventional mortgage program.

Well it is simple to assume that what you owe the lender based on say a 30 year loan is an interest payment plus a principle payment. Say your loan balance is $500,000 on your home's mortgage and you decide to pay the minimum payment of let's say 4% of the interest and no principle, your payment amount is about $1666.00 that month. Sounds good huh? The true interest rate let's say is 6.5%, so you are going 2.5% negative against the interest in addition to paying $0 principle payments. So, let's say you borrowed $500,000 and made the minimum payment of $1666 for 5 years. At the end of 5 years you now owe about $566,000 on a loan you took out 5 years ago. Plus yo

l it. A Pay Option ARM mortgage is somewhat complex and difficult for many consumers to adequately understand. A Pay Option ARM gives you monthly payment options, usually three. One payment choice is paying the principle plus as low as 1% of the interest. Another option is paying say 4% of the interest and no principle payment. Option 3 would be the true reality of it all being a Principle and Interest payment, just like a normal conventional mortgage program.

Well it is simple to assume that what you owe the lender based on say a 30 year loan is an interest payment plus a principle payment. Say your loan balance is $500,000 on your home's mortgage and you decide to pay the minimum payment of let's say 4% of the interest and no principle, your payment amount is about $1666.00 that month. Sounds good huh? The true interest rate let's say is 6.5%, so you are going 2.5% negative against the interest in addition to paying $0 principle payments. So, let's say you borrowed $500,000 and made the minimum payment of $1666 for 5 years. At the end of 5 years you now owe about $566,000 on a loan you took out 5 years ago. Plus yo

4% of the interest and no principle payment. Option 3 would be the true reality of it all being a Principle and Interest payment, just like a normal conventional mortgage program.

Well it is simple to assume that what you owe the lender based on say a 30 year loan is an interest payment plus a principle payment. Say your loan balance is $500,000 on your home's mortgage and you decide to pay the minimum payment of let's say 4% of the interest and no principle, your payment amount is about $1666.00 that month. Sounds good huh? The true interest rate let's say is 6.5%, so you are going 2.5% negative against the interest in addition to paying $0 principle payments. So, let's say you borrowed $500,000 and made the minimum payment of $1666 for 5 years. At the end of 5 years you now owe about $566,000 on a loan you took out 5 years ago. Plus yo

payment plus a principle payment. Say your loan balance is $500,000 on your home's mortgage and you decide to pay the minimum payment of let's say 4% of the interest and no principle, your payment amount is about $1666.00 that month. Sounds good huh? The true interest rate let's say is 6.5%, so you are going 2.5% negative against the interest in addition to paying $0 principle payments. So, let's say you borrowed $500,000 and made the minimum payment of $1666 for 5 years. At the end of 5 years you now owe about $566,000 on a loan you took out 5 years ago. Plus yois 6.5%, so you are going 2.5% negative against the interest in addition to paying $0 principle payments. So, let's say you borrowed $500,000 and made the minimum payment of $1666 for 5 years. At the end of 5 years you now owe about $566,000 on a loan you took out 5 years ago. Plus you now only have 25 years to repay the $566,000. Also, this is based off the best case scenario. You could actually owe more than this, as let's remember this is an adjustable rate loan.

So now are you ready to start evening things up by paying $3821.00 per month? Quite a jump in monthly payment! Will you have no choice but to sell the home and move into a lower priced home? Personally, I think that Pay Option ARMS are a good choice for very few people. If your your an average person that makes an equal income month after month, in my opinion this program is setting you up for an end disaster. What happened to people wanting to build equity and get get their mortgages paid off before retirement? It's like this, pay it now or pay it later, but if you want to own it and keep it, you have to pay for it sooner or later. Now, do you think a Pay Option ARM is such a SMART loan?