Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Andy — Fri, 02 Mar 2007 13:00:00 GMT

To Steve who cannot commit: I am new to this type of mortgage, however, the adjustments that can occur on the minimum payment are nominal in my opinion compared to the power of what you can do with the increased cash flow. Simply run the numbers and look at the incredible gain as opposed to the small adjustment that might not even take place. At the end of year 3 you should be looking at refinancing to get any extra equity that may be there and not have the pre payment penalty at that point.

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

KIM — Sat, 09 Dec 2006 13:00:00 GMT

I was thinking of doing a cash out refi w/a PO arm (5 yr fixed @2.95%) on 2 investment properties and my primary and using the $$ to purchase another investment property...any idea of the going rate for the prepayment penalty as I will surely refinance after the 5 years...would it be worth it with the closing costs and penalties

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Angela — Sat, 28 Oct 2006 11:00:00 GMT

I've been providing consumers and investors with a great POA product with rates as low as 1.50% with credit scores as low as 640 with yearly payment caps for up to 5 years. It is definitely a great product to build savings for investment needs.

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Shelley — Thu, 06 Jul 2006 11:00:00 GMT

I've been educating borrowers on the Pay Option loan for the last year and I have seen nothing but success. Basing your decision on the media's uneducated opinion isn't a wise idea. The POA is just half of the investor experience. You can't expect to golf like Tiger Woods by using his clubs. It's the swing that matters. Just food for thought. I

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Chris — Sun, 18 Jun 2006 11:00:00 GMT

Does anyone here think it would be OK to use an Option ARM on an investment property that I will be converting to condos and then selling out within 5 years? As condo conversions typically yield big margins, I am thinking I can build the negative amortization into the project costs of the condo conversion, thereby enjoying the significant cash flow between now and when we condo. If anyone has opinions I would love to hear them.

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Steve — Thu, 08 Jun 2006 11:00:00 GMT

Tom- why not look at a 40 or 50 year mortgage? Depending on how long you plan to keep the property this may lower your payment but keep it fixed as opposed to floating.

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Tom — Fri, 07 Apr 2006 11:00:00 GMT

I am interested in lowering my monthly payment on some of my rental properties. However, I do not wish to incur the risk of an adjustable rate. I like the idea of the Pay Option ARM, but I cannot seem to get myself to commit. Is there such a thing as a Pay Option Fixed Rate mortgage??? This would be the best of both worlds. I could not possibly be the first to think of it. Is it available is the question.

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Aaron — Thu, 02 Mar 2006 13:00:00 GMT

I clearly don't agree with Roy's comment about the COSI being a more stable index than the MTA. If you look at the 1 year avg of the MTA it has been at 2.47% and the COSI at 2.45% (not too far off...right?) Now look at the 3 year average and the MTA was at 1.85% and the COSI at 2.21%. Finally, look at the 5 year average and the MTA was at 2.78% and the COSI at 2.98%. These numbers are based on facts, not numbers that have been biased based upon what type of loans that you are selling.

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Roy — Wed, 05 Oct 2005 11:00:00 GMT

True, the option arm is not for everyone, but it can be a very powerful tool in ones investment future. When looking at this product, the interest should be put on the index. Most companies use Libor, MTA, as their index. There in only one company that uses their own. Cost of Savings Index or COSI. The MTA it has gone up almost 200% in the last year, same story with LIBOR.The COSI index has only moved 39%. The COSI Index, is far more stable.

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Anonymous — Thu, 22 Sep 2005 11:00:00 GMT

What is a 51 LIBOR Non-Convertible Mortgage Loan?

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Jay Martin — Sun, 14 Aug 2005 11:00:00 GMT

You should not make any decisions without speaking directly to a loan professional that specializes in these products. Every transaction is very specific to an individuals needs, time frame and resources. To plan any mortgage based on media reports or articles is simply not the way to analize the value of these mortgage tools. You can look at all of the data but, if you dont understand the product you will not know all of the right questions to ask. These can be valuable mortgage options.

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Jay — Mon, 25 Jul 2005 11:00:00 GMT

Ive had a P.O. ARM for over 2 years and have been making the min. pymt each month. The pymt is $1200 as compared to the 30-year amortized pymt of $2000 (which I can pay if I chose). The difference is $800/month, in which I have been able to invest in a growth fund that historically averages 8-10%/year. I have about over $19,200 in savings/investments. I am simply doing what the banks have been doing for decades. I have control of my own money. The tax advantages are beneficial as well.

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

Dale — Fri, 22 Jul 2005 11:00:00 GMT

I am doing some Hard Money brokerage lending. I am working with Private and Syndicated lenders. I am particularly interested in a few lenders that will consistantly work in this envirmnment, and work with REHAB loans for small properties, and small FICO Scores. I have, and will continue to do at least the upfront due dilagnece.

RE:Option Mortgage - Intriguing New Product Or Ticking Timb Bomb?

nyapple — Mon, 18 Jul 2005 11:00:00 GMT

Interest only Libor mortgage, low adjustable rate mortgages, negativeamortizationmortgage, Bla Bla Bla ??? Big words I dont understand, all over the place. I hear all these terms and I dont even know where to start when Im looking for a loan. This is all really confusing.