Selecting the Right Option Florida Home Loan

When it comes to non-traditional Florida home loans, critics abound. Many professionals believes these mortgage products cause more harm than good - whether or not this is the case, borrowers are likely to continue using them as means toward property purchasing ends.

With in mind, here’s a look at various Florida home mortgage resources that you may be considering:

Interest-Only Payment

An interest-only payment is equal to the amount needed to repay the interest due each month. Just like any other interest-only loan, you’re not paying any principal balance for a certain time period, just enough to cover the interest.

15-Year and 30-Year Amortization Payment

If you decide to make the 15-year or 30-year amortization payment, you’re paying an amount that is needed to pay off your loan in 15 or 30 years (respectively) from the date you closed your loan. The 15-year payment is the higher of the two and it pays down your loan’s principal balance the quickest.

Minimum Payment

This is the lowest payment option and covers an amount less than what it would take to pay the full interest in a given month. For example, if you have a $100,000 Florida home loan at 6.25 percent, the interest equals $520.83. Depending on how your minimum payment is calculated, your minimum payment would be less than that.

Generally speaking, your minimum payment may change each year, but it can only increase a certain percentage of the previous year’s minimum payment amount. Every five years, your loan gets recalculated. After each recalculation, your new minimum payment is based on your current interest rate, your unpaid principal balance and your remaining term.

Benefits of Option ARMs

Why apply for an An option ARM? It can give you the benefit of a lower rate because it’s an adjustable rate Florida home mortgage. Moreover, you have the ability to choose which type of payment you want to make, depending on your financial situation for a given month.

The minimum payment can significantly help you if you need more cash for other things, such as consolidating high-interest credit card bills or investing more in your 401k. The 15-year payment can help you pay off your loan faster, if that’s your goal. Various advantages abound.

There are many option ARMs available. If you’re considering applying for one - and many lenders don’t believe Florida mortgage loans such as this cause problems - talk with a broker today. Our cost-free form atop this page can help.