Pay-Option ARM Mortgage /
Pick a Payment Loan Calculator
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Pay Option ARM / Pick A Payment Loans - This popular adjustable rate mortgage offers
the flexibilty of 4 different mortgage payments on each statement. If you are thinking
of using pay option ARM / pick a payment
loan to purchase a home, get a clear
understanding of how this loan works with this pay option / pick a payment
mortgage calculator.
Ask the following
questions from your mortgage lender:
- What is the start rate / teaser rate?
- How long is initial start rate fixed for?
- What is the Index Type and current amount? (COFI, CODI, COSI, MTA)
- What is the Margin? (Note: Lower is better)
- At what percentage will the loan "Recast"? (Note: Higher is better)
- Is there a "Pre-payment penalty"?
With those answers you will be able to use this pay option arm loan calculator.
Step 1: Enter Sales Price
Step 2: Enter Loan Details Using Fields
Step 3: Click "Calculate Pay Option ARM Loan"
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Sales Price |
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Down Payment |
You may be using a piggy back loan for 100% |
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Start Rate |
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Index |
Round to Nearest Percentage Amount |
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Margin |
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Pre-payment penalty |
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Recast % |
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Summary of Pay Option ARM Loan |
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Loan Amount |
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Fully Indexed Rate |
Index (Label%) +
Margin (Label%) = Label
% |
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Payment Options |
Minimum Payment |
Interest Only |
30 Year |
15 Year |
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Interest Rate |
% |
% |
% |
% |
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Monthly Payment |
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Facts about this Pay Option ARM Loan* |
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Estimated first payment adjustment to the required mimimum payment based on typical
adjustment of 7.5% over previous payment: |
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Estimated monthly negative amortization added to loan balance when making only the
minimum
required payment: |
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Estimated negatively amortized balance accumulated on original loan balance after
a year of
making mimimum payment: |
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Assuming loan "Recast" of
Label
%, this loan will recast to a fully amortized mortgage based on remaining years
at time of recast,
when loan balance reaches:
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Estimated number of months of making minimum payments before loan will automatically
"Recast"
to a fully amortized mortgage: |
Months |
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Estimated mortgage payment after "Recast". New loan is fully amortized for remaining
loan term of Label
months at fully indexed mortgage rate of
Label
%: |
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If refinancing a Pay Option ARM loan within first
Label
months, you may be faced with a loan pre-payment penalty. Following is the most common calculation to estimate the mortgage pre-payment penalty amount based
on the original loan balance and fully indexed mortgage rate:
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Calculator Disclosures & Assumptions:
Since it is impossible to estimate changes to future rates and indexes, all calculations are based on current rates entered by user. This
is a worst case scenario assuming clients make minimum required payments at the current
fully indexed rates. Assumes first interest rate adjustment after 1 month. Estimated
time before recast maybe more or less do changing negatively amortized loan balance, compounding
interest and possible changing rates. Payments do not include property taxes, insurance or
possible PMI. Calculator is provided for informational purposes
only. This is not a commitment to lend. The information provided on or through
this site is for purposes of general consumer education only and is not intended
as a substitute for advice from a qualified professional, such as, but not limited
to, a lawyer, accountant, investment advisor, insurance broker, financial planner,
real estate agent or home inspector. We can not and do not guarantee the accuracy
or the applicability of this information to your circumstances. We encourage you
to seek personalized advice from qualified professionals regarding all personal
finance and real estate issues.
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