Option Refinance

Pay Option Refinance is an increasingly popular strategy amongst borrowers who are currently in Option ARM mortgages. While a limited number of Option ARM borrowers choose to refinance into interest only or fully amortized mortgages, the majority are opting to refinance theiir option payment mortgages into fixed rate cash flow mortgages which possess all of the same payment options as their old option ARMs.

Fixed Option Refinance loans are an increasingly prudent choice for homeowners who want to protect themselves from unforeseen events. Interruption of income due to unemployment, illness, disability, or family emergency such as a death in the family is the leading cause of foreclosure in the USA. The correlation between income interruption and foreclosure is due to the very low level of savings for our average American household. Not having enough money saved for a "rainy day" can mean missing mortgage payments, and you don't have to miss more than a couple to lose your home. By refinancing into a Fixed Rate Pay Option mortgage, families can protect themselves from temporary emergencies and declines in income due to seasonal or other factors. By having a low minimum payment option available, often half what a normal mortgage payment would be, you and your family can weather the storm more easily. Once your income is restored or the emergency is resolved, you can then return to making an interest only or principal & interest payment.

Pay Option refinance mortgages are often associated with Option ARM mortgages. You can refinance your Pay Option ARM and save a considerable amount of money and secure a long term fixed rate option mortgage and give yourself a great deal of flexibility.

Option refinance should be considered by borrowers who plan on keeping their home for at least 3 years. They may be able to save money going to a conventional Mortgage and avoiding negative amortization.

Many Wall Street Executives and Employees who receive large annual bonuses can benefit from a pay option refinance. This is because the mortgage payment can be a lower amount during the year and a lump sum can be applied when one receives their annual bonus.

» DISCLAIMER: The information contained in this article on 'Option Refinance' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.