Some folks need more cash or cash flow available right now or for the next few years. Others can tolerate changing rates by using more of their funds to invest in programs that earn a higher rate of return than their mortgage costs.

To satisfy the needs of these clients, Unified Financial Group offers two types of adjustable rate mortgages.

To learn about the elements that vary from ARM to ARM, read about ARM Features.

Interest-Only Mortgage

Lenders continue to develop innovative home loan products in response to changing economic trends. One of the most popular in recent years has been the interest-only mortgage. With these loans, the monthly payment includes no repayment of principal for a period of time. As a result, the loan balance remains unchanged during the period specified in the bank note. After that time, the payment is increased to the fully amortizing level. The longer the interest-only period, the larger the payment increase when that interest-only period ends. The interest rates on interest-only mortgages are generally variable but can be fixed.

Flexible Payment Mortgage

A flexible payment mortgage is a recent innovation that offers even more flexibility than an interest-only option loan. The difference is that, with an interest-only mortgage, payments are set at the interest-only amount for the duration of the initial interest-only period (even though you technically always have the option of making an additional payment toward the principal). After that, your payments adjust to the fully amortizing amount. In contrast, with a flexible payment mortgage, you have at least three payment options each month:

• Interest-only
• Fully amortizing
• A minimum payment less than the interest-only amount

The minimum payment option allows you to pay less than the interest only amount. As a result, instead of the principal balance remaining the same as it does with an interest-only mortgage, the principal owed actually increases to account for the unpaid interest. This is also known as negative amortization and is sometimes called a "cash flow" mortgage.

An ARM can be a great solution if it matches your financial goals and risk tolerance. Our representatives look forward to discussing our latest line of ARMs with you. Contact us for more details.

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