Go Back To Search Results Question How do people get home loans for like $200 even $300K and have monthly payments for less than $1000 a month? My husband and I both have excellent credit (all 3 scores for both are above 780), and even with an ARM 5/1 loan our payments for even a 145K loan are more than $1000 a month. I see adds for loans for less and just wondered how they do this? I know the disadvantages to an ARM loan. We will probably go that route anyway because we plan on only staying for a couple years. By JJK Posted on 04/12/07 Total Answers 6 Answers- interest only loans...which means they actually rent the property....they have NO equity in the home they buy, if they only pay the interest.... You should never get an ARM...because then the payments go up and down and you end up with a BIG balloon sometimes... Fixed 30 yr...smaller payment, LOTS of equity... Answer by : Kathy A On Date 2007-04-12 20:26:29 You shouldn't believe everything you read. Answer by : stan c On Date 2007-04-12 20:27:18 What you are seeing is called an option arm loan, which means unlike other ARM's where the principal and interest or simple interest payment is calculated from the total of the index and margin, the Options ARM offers 4 monthly payment options every month, giving you the opportunity to choose which payment gets made based on your economic condition at the time the payment is due. This monthly payment option is where the Options ARM derives its most common name. Other names the Option ARM is known by are: Cash-Flow ARM's, Pay Option ARM's, and Pick a Payment Loans. There are typically 4 payment options to choose from each month and you actually get to elect which one you make. This is the primary advantage of choosing this type of mortgage. These options will help you better manage your monthly cash flow, and provide more liquidity in the day to day operations of the normal household, so for times you need a some extra money one month, you can choose the lowest payment, then the next month, catch up. The monthly payment options you have each month will depend on which version of this hybrid loan program you have. The following is the basic options that exist: 1. THE MINIMUM PAYMENT OPTION-Neg-Amortization 2. INTEREST ONLY PAYMENT 3. 30-YEAR PAYMENT 4. 15-YEAR PAYMENT You must weigh the pro's and con's of having this type of mortgage for you situation. Answer by : gofrfkim On Date 2007-04-12 20:32:45 I can help! Shoot me an email to msmith@premierloangroup .com, and let's chat! Marty Answer by : Marty S On Date 2007-04-12 21:35:49 approach a Govt Bank Answer by : angelina On Date 2007-04-12 22:04:40 Could be your property taxes and insurance. Or your lender you used for your loan totally sucked. Answer by : CJ On Date 2007-04-12 22:50:54   Go Back To Search Results