Option
ARM Mortgages
No Longer Available
Option ARM mortgages were programs that allowed borrowers
to choose from up to four payment options every month
(typically a 30 year, 15 year, and an interest only
option, plus a minimum payment alternative based on
a rate as low as 1.00% for the first year). This final
option led to negative amortization where the consumer
would actually end up owing more on their mortgage
than they would prior to their payment. Option ARMs
have come under a great deal of scrutiny in recent
years as they played a role in the mortgage and real
estate problems of 2005-2010. Many clients benefited
greatly from these loans in the earlier part of the
decade as real estate prices skyrocketed and homeowners
enjoyed tremendous appreciation while they kept their
payments at a minimum. The problem, like with most
riskier loans of that era, was that people in the
industry got more greedy, qualifications became more
relaxed, and homeowners were either not well educated
of the potential risks or simply chose to ignore them.
Many consumers found themselves stuck in these programs
as real estate prices plunged and rates began to tick
upwards. Default rates on option ARMs are and were
well above average. We do not know of any lenders
who offer pick-a-payment option arms at this time.
Today, traditional fixed
rate mortgages and longer term (3-10
year), fully amortizing arms are back en vogue
and for good reason. AAXA still has access to interest
only loan programs (in most states) and adjustable
rate loan programs so that you can keep your payments
at a minimum. Give AAXA a call today for a free quote
and consultation.
Request mortgage rate and program information three
ways:
-
Call AAXA toll-free at 877-RATE-LOW
(877-728-3569) for mortgage rates
-
Research current mortgage rates using our AAXA
Mortgage Quote Form
-
Apply using our Secure
Online Mortgage Application