What are the most attractive features of stated income Option ARM?


A stated income Option ARM can be a great product. Even without support from many lenders to offer it to the general public, stated income Option ARM home mortgage loans are a very good option for a homebuyer who is able to keep a check on their personal finances and does not want to verify income.

Actually, it is exactly the beneficial features of those adjustable rate flexible payment mortgages that have to be studied by the general public before they get carried away and fail to use them properly.

Stated income adjustable rate mortgages are recommended to consumers with good money management skills. If you are less experienced in doing this, use the services of a personal financial advisor if you wish to benefit from these loans with less risk.

Stated income loans in general require much less documentation, income is not verified, only sources, and they carry higher interest rate than fully documented loans. Stated income and stated assets documentation choice for Option ARMs add to the existing attractiveness of those loans.

Most attractive features of Option ARM mortgage are payment control and flexibility.

  • The minimum payment option can easily go to 1% for as long as your loan negative amortization cap is not reached.
  • There is also interest-only for 5 or 10 years and fully amortizing payment plans after that available for different periods (15, 30, or 40 are the most popular of those).
  • Stated income will require higher credit score.
  • MTA, COSI, LIBOR, and COFI are the most popular indexes for Option ARMs.
  • Stated income Pick-a-Pay home loans (another name for Option ARM) are available for both investors and homeowners. However, allowed LTV for investors will usually be lower.
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