The  Options  Loan

 This is a perfect product for the buyer who wants a comparatively low interest rate, any number of payment amounts each month, and wants to keep their income and asset information private.   It is ideal for a person who would like to invest now with money from deferred loan/principle payments or pay their loan off quickly and enjoy dropping monthly payments.  While other loan rates are going up, this rate is still going down!!

• A low 4.28% fully indexed rate – not the 6 7/8% to 8% range of interest rate found on fixed over time with some brief exceptions lower and higher.
• The CD that consistently offers you the worst rate for your deposit money, thus keeping the 3 month CD index low. 
• Consistently beats a fixed over time due to the Index being simply the 12 month rolling  average of 3 months CD’s on deposit  in the United States.
• Have four payment options to allow you full control over your money

1. Minimum due pays nothing to principle and maybe not all of the interest.

2. Pay interest only

3. 30 year payment

4. 15 year payment

5. Or anything in-between

• No prepayment penalty
• As explained above you will free up money for investment purposes while still meeting the mortgage holder’s payment requirement.  Or pay off debt.
• Use stated income on the application to qualify instead of having to turn in W-2’s or tax returns and only 20% down.  Or only 10% down on a 75-15-10.
• Put 30 % down and not have to be employed.
• Pay down your loan in the future ( possibly with money made in investments) and be able to have your payment dropped based on the new loan balance.
• Receive monthly statements which show current balance, rate, etc.. and not coupon books.

 Why choose an Options Loan over a 5 Year Interest Only Loan

 Many borrowers have chosen 5 Year Interest Only Loans over conventional financing in a desire to have a lower payment.  Although the need for a lower payment is real, the 5 Year Interest Only Loan only solves this problem on the surface and with possible dire consequences after a few years.

 This type of loan is structured with a fixed interest rate and payment for the first five years and during this time only interest payments are required.  This gives the borrower about a 30% lower payment than a conventional loan.  This lower payment gives the borrower the ability to save more for retirement, payoff high debt or afford a larger home.

After the first five years are completed, the payment is recalculated (re-amortized) using the original loan amount and the remaining 25 years at the current interest rate.

This will force the payment to increase between 40% and over 100%.  See the following example based on a $300,000 loan amount 

 Obviously this is a dangerous strategy unless the borrower can guarantee that they will be out of the loan within 5 years, but then what do they choose at that time.  They will probably end up with the same percentage increase.

 But there are other loans available that can give an even lower payment with out the down side risk of large payment increases in the future.  The Options loan gives an initial payment over 40% lower than conventional financing with payments that are guaranteed to not increase more than 7 ½ percent in any one year for the next 10 years.  See the following example based on a $300,000 loan amount

 Guaranteed Pmt Schedule        

1.     $1,035     Initial Minimal Payment

2.     $1,113     7 ½ % Increase

3.     $1,196     7 ½ % Increase

4.     $1,286     7 ½ % Increase

5.     $1,383     7 ½ % Increase

6.     $1,486     7 ½ % Increase            16 % Lower than “5 Year Interest Only Best Case Scenario”

7.     $1,598     7 ½ % Increase

8.     $1,718     7 ½ % Increase