How do Option ARMs work?
Option ARMs are a relatively recent product offering for many lenders, and can have different payment structures. However, the typical Option ARM has a payment structure where each month you are able to choose what your payment will be. The typical structure has the following payment options: 1) a minimum payment established when your loan closes, 2) an Interest-Only payment based on a preset index and margin, or 3) a Fully Amortized payment based on the same index and margin.
