Question:

Is there a subprime Option ARM?

Answer:

Yes, there are. However, the subprime Option ARM is a high risk to lenders, so expect low LTV and high equity requirement. And a credit score requirement of 600 in the least.

How about a real subprime Option ARM?

70% LTV, FICO 540 and stated income - is that possible with a subprime Option ARM? Yes, it could be. If you are in need of a subprime Option ARM, try the big lenders first. Other popular names for an Option ARM are Pick-a-Payment, Flex Pay, Cash Flow ARM, Power Option ARM and others similar products, telling borrowers how great it is to be able to pay at rate of 1% for... 3 months.

Having a subprime Option ARM is possible; the question is should you get one? Yes, there are many self-employed borrowers and investors who can put these loans to work but lenders are selling subprime Option ARMs to borrowers who think they'll have to pay the 1.5% rate for the life of the loan.

You have to understand why you are taking an Option ARM, and even more so when you are taking a subprime Option ARM, or you could end up in a very high rate loan within a year and have to pay heavy prepayment penalties to refinance out.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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