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I know all there is to know about Option ARMS. The question I've is, what
is LPMI? I know what PMI is, I just don't know what L is. Please explain
what L is in LPMI.
As to whetherj or not you'd recommend these products is beside the point.
Some borrowers (if they really have their heart set on the house) will need
this product to qualify. Personally, I am not sure I would recommend one in this
environment either, but it is a product that should be available for
consideration. I currently have this loan on my house, and I see that it
will remain pretty stable from here, even though it has been rising lately.
"$cott" <ezmortgageloanz@aol.com> wrote in message
news:1147586157.995723.175830@v46g2000cwv.googlegroups.com...
> These neg am/option ARM programs are great when rates are falling,
> stagnant or in a low interest/low volotility enviroment, but I'd
> not recommend them for this interest rate enviroment to anyone Tom,
> Dick or Harry.
>
> All of these types of loans, regardless of who is underwriting it are
> based upon a 1 month ARM. While your minimum payment are preset for up
> to 5-10 years, the I/O, 15 YR FXD, 30 YR FXD, etc. are changing every
> month.
>
> As interest rates increase, so does the neg am accumulation and the
> likelihood for recasting.
>
> The fully indexed rate of most option ARMs are on par or slightly lower
> then what the 30 YR FXD is being offered.
>
> Most lenders/brokers like them because you can make big YSP on the back
> and still offer a rate between 1-2.99%.
>
> This is the last loan a newbie should be selling, unless they fully
> understand all that is at play with this loan type.
>
> Regards,
>
> Scott Miller
> National Commercial and Residential Lender/Broker
> Carteret Mortgage
> 1.877.716.6495
> EZMortgageLoanz@aol.com
>
> www.RealEstate-IQ.com
> www.EZMortgageLoanz.com
>
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Re: Secrets of the Option ARM Loan (Newbie Guide)
