A fixed rate mortgage has the same payment for the entire term of the loan. The Option ARM uses a low initial rate to calculate your initial minimum monthly payment. Although the interest rate will increase after 1 to 3 months, your low payment will remain fixed for the entire year. This can produce a much lower monthly payment than a traditional fixed rate mortgage, or even an adjustable rate mortgage (ARM).
KJE Computer Solutions, LLC's information and interactive calculators are made
available to you as self-help tools for your independent use and are not
intended to provide investment advice. We cannot and do not guarantee their
applicability or accuracy in regards to your individual circumstances. All
examples are hypothetical and are for illustrative purposes. We encourage you
to seek personalized advice from qualified professionals regarding all personal
finance issues. More