What is a Pick-a-Payment mortgage?


Pick-a-Payment mortgage loans are the well-known Option ARMs advertised in a flashy manner. Pick a Payment mortgage products will offer the typical Option ARM features and flexible payment plans:

  • Minimum payment is often as low as 1-1.25%;
  • Interest only payments;
  • True and Standard bi weekly plans;
  • Fully-indexed payments with 15 or 30 year amortization periods.

Pick-a-Payment mortgage loans are fancy products. They also go by the names Flex Option ARM, or Cash Flow ARM, etc. There are also even more exotic variations of the Pick-a-Pay mortgage loan - as the Fixed Rate Pick-a-Pay loan. This is a mortgage that offers all the features of a standard Pick a Pay, but carries lower fixed rates for up to 3 years that convert into adjustable rates afterwards.

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