Explore the Mortgage101 Library
Check Local Mortgage Rates
Loan Program Choices
Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator
An option ARM loan is a type of adjustable rate mortgage that allows buyers a flexible repayment period. This type of mortgage has exploded in recent years and millions of people now have them. This type of loan has some advantages and disadvantages. Here are the pros and cons of option ARM loans.
- Affordable payments - An option ARM loan will help lower your monthly payments initially and make them affordable.
- Flexibility - You can choose to reduce or increase your monthly payment schedules, depending on your personal financial circumstances.
- Negative equity - Only paying interest will result in a higher loan balance to pay off in the end because the negative amount is added to your loan balance.
- Growing payments - Because the rates are adjustable, your monthly payment could increase drastically over the years.
- 3 Reasons Banks Reject Short Sales
- FHA Loans for a First-Time Home Buyer
- What To Do When Mortgages Default
- 3 Warning Signs of Loan Modification Scams
- How to Get Approved for an FHA Loan despite Bad Credit
- 3 Common Short Sale Mistakes
- Appraisal Basics
- Should You Refinance? Make Sure the Timing is Right
- Second Mortgages: Advantages and Disadvantages