Can anyone tell me whether a fixed-rate 30-year mortgage with a cash-flow option is available? Does such a mortgage come with any additional costs, such as a higher interest rate?
I am interested in obtaining a fixed-rate 30 year mortgage, but with "option" features. Most of the time, such "option" loans are "Option ARM" (adjustable rate). I'm looking for such a loan, but with a fixed-rate component. I suspect that "option" loans may be harder to come by, because Option ARMs have gotten a negative connotation. Their prevalent use during the bubble, allowing borrowers to "afford" a loan they otherwise would not have. Nonetheless, option loans are an appropriate loan type for the right kind of buyer. I understand that Fannie and Freddie are the predominant buyer of loans these days, and I suspect that option loans are not the kind of conforming loans they are buying up. by jptampa from Tampa, Florida. Dec 4th 2009
Leo Harvey (LHARVEY)
#6 ranked lender in Pennsylvania - 149 contributions
I don't know of any Lenders currently doing option ARMs. There never has been an option fixed rate program because of amortization issues. The math just wouldn't work. If your goal is to get a mortgage with a reduced payment during the early years to allow you to save what you would normally put toward principle then I would suggest looking into an interest only Fannie Mae type loan. These are available for well qualified borrowers and they will give you some of the benefits of the Option Loan.
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