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• The PayOption ARM is:

  • A powerful money management tool
  • The type of loan that allows your borrowers to finance their house, manage their home equity and cash flow at the same time
  • The only mortgage that gives your clients payment options to manage their finances based on their needs or preferences at any given time.
  • 
    
• The PayOption allows your borrower to have:
  • Financial flexibility
    • Borrowers with inconsistent stream of income
    • Borrowers on commission
    • Borrowers experiencing a lifestyle change
  • Cash flow management capability

  ·        Self-employed borrowers or business owners

  ·        Investors in real estate or in stock market

  ·        Borrowers who need to invest in their retirement plan (i.e. 401K, Roth IRA)

• Let’s talk about payment options:

  • Minimum Payment
    • Based on the start rate of 1.00%-1.75%
    • Adjusts annually
  • Interest Only Payment
    • Based on the Fully Indexed Rate (F.I.R. =  Index + Margin)
    • Adjusts monthly
  • 30-Year Amortized Payment
    • Based on the Fully Indexed Rate (F.I.R. =  Index + Margin)
    • Adjusts monthly
  • 15-Year Amortized Payment
    • Based on the Fully Indexed Rate (F.I.R. = Index + Margin)
    • Adjusts monthly
  • Any amount greater than the minimum payment
    
    
    
    

    Fixed for                                 Adjusts monthly
      1 year                        Available after the intro period

    Example: $400,000 loan.	Minimum    Payment	Interest Only Payment	30-Year Amortized Payment	15-Year Amortized                  Payment
    PayOption 1-Mo Intro:1.00% FIR: 4.875% (MTA)	$1,286.56	$1,621.13	$2,114.39	$3,141.59

     What happens to the minimum payment in the following years?

    • Each year, the minimum payment is set as the lower of:
      • The previous year’s minimum payment increased by 7.5%

    Or

    • The 30-year amortized payment at the current fully indexed rate of that month, based on the remaining balance 

    PayOption 1-Mo. Intro: 1.00%

    FIR:  4.875% (MTA)

    Year 1	Year 2	Year 3	Year 4	Year 5
    $1,286.56	$1,383.05	$1,486.78	$1,598.29	$1,718.16

    (Subject to the 7.5% minimum payment cap per year) 

    Recast:  when, what, how?

    • Recast occurs:
      • Automatically every 5 years
      • When the deferred interest limit of 115% (NY = 110%) is reached

     

    • Recast keeps the loan on track to be paid in 30 years.  During the recast month, the 7.5% payment cap is not available and the borrower has 1 payment option only – a full payment based on:
      • The current fully indexed rate
      • The current balance
      • The remaining term
    • The recast P&I payment becomes the minimum payment for the remainder of the year, and the whole cycle starts over again with your payment options and with the 7.5% payment cap applicable to the minimum payment each year. 

    Why Choose the PayOption ARM?

    • Financial Flexibility
    • Cash flow management capability
    • Tax planning benefits 

    WITH THE LOWEST MORTGAGE PAYMENT POSSIBLE!