Aimloans, Target Pay Option ARM

You make the choice each month how much YOU want to pay on your option ARM loan.

Each month you select the payment option that's right for you, allowing you to better respond to you everyday needs.  You have up to four payment options each month so you are in total control.

You options are:

1) Minimum Payment  -- this option allows you to conserver your cash or redirects it to better uses to pay off other debt or put into investments.  This payment may not be enough to pay all of the interest that is due and may not pay down any of the principal balance.  This is called "negative interest" or "deferred interest".  Most loans allow "deferred interest" to accumulate to a preset level, usually 110% or 125% of the original loan amount.  You minimum payment usually will stay the same for a period of 12 months.  However, you interest rate can change monthly.

So why would any sane person choose this option?  Simple, in many area of the country the value of homes are appreciating faster than the deferred interest amount.  Second, many families can put the extra money to better use; such as paying off other more costly bills, paying for college, medical bills or other expenses, fluctuating income streams that cause a need to minimize payments during slow times.

2) Interest Only Payments -- Similar to the minimum payment this payment will not have any amount applied to the principal balance of the loan.  The advantage of this option is the lower payments than options 3 and 4 without the possibility of the "negative interest" or option 1.  This is a favorite choice for investors who want to maximize their rental cash flow.  The advantage of this option is similar to the advantages noted in number 1 above.

3) Full Principal and Interest Payment -- With this option you pay all of the interest and scheduled principal based on the remaining scheduled term of your loan. 

4) Full Principal and Interest Payment Based on a 15 Year Term -- This option shows you the payment to enable you to pay your loan off in 15 years from the origination date, regardless of what your prior payments have been.  This puts you on an accelerated amortization and will same you thousands of dollars in interest.

Payment Options That Put You In Control

This is the mortgage of "choices."  Whether you are buying your first home, relocating to a new home, moving up to your next home, or managing cash flow and interest expenses, the Target Payment ARM makes it easier.  It offers flexible qualification standards and loan limits, which can make it easier to find the right loan for you.

To find out more information about this loan option, please call 888-317-6423 and ask to speak with a Loan Officer. 

You may also reach us through Customer Service.

Back to Tools