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What is the difference between Pay Option, Pick-A-Payment, Cash Flow ARM, FPARM, and Option ARM loans?

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What is the difference between Pay Option, Pick-A-Payment, Cash Flow ARM, FPARM, and Option ARM loans?

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There is no difference! These are all the same type of loan. We’ll use the term Option ARM in this article. ARM, which is short for Adjustable Rate Mortgage, means that the interest rate on the loan increases or decreases according to a schedule set out in the loan document. With Option ARM loans, the interest rate is recalculated every month after the introductory period. ARM loans have been around for years. The relatively new Option ARM differs from other ARM loans because it offers four payment options each month. I like the idea of a low introductory interest rate. What could be bad about that? The word introductory is the catch. These loans are attractive because the introductory interest rate, or start rate, can vary from 1.25% to 4.25%. The more money you put down and the better your credit standing, the lower the start rate. The start rate for Option ARM loans is only in effect for the first one to three months of the loan. The start rate is used to calculate the minimum payme

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