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Mortgage Info > Mortgage Calculators > Pay Option ARM / Pick a Payment Mortgage  Calculator 

Pay Option ARM / Pick a Payment Mortgage Calculator

Pay Option ARM / Pick A Payment Loans - This popular negative amortization adjustable rate mortgage offers the flexibilty of 4 different mortgage payments on each statement. If you are thinking of using  pay option ARM / pick a payment loan to purchase a home, get a clear understanding of how this loan works with this pay option / pick a payment mortgage calculator. 

Ask the following questions from your mortgage lender: 

  • What is the start rate / teaser rate?
  • How long is initial start rate fixed for?
  • What is the Index Type and current amount? (COFI, CODI, COSI, MTA) 
  • What is the Margin? (Note: Lower is better) 
  • At what percentage will the loan "Recast"? (Note: Higher is better) 
  • Is there a "Pre-payment penalty"?

With those answers you will be able to use this pay option arm loan calculator.

Pay Option ARM / Pick a Payment Mortgage Calculator Instructions

Step 1: Enter Sales Price
Step 2: Enter Loan Details Using Fields
Step 3: Click "Calculate Pay Option ARM Loan"

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Pay-Option ARM Mortgage / Pick a Payment Loan Calculator ///
Sales Price  
Down Payment You may be using a piggy back loan for 100% 
Start Rate
Index Round to Nearest Percentage Amount
Pre-payment penalty
Recast %
Summary of Pay Option ARM Loan ///
Loan Amount
Fully Indexed Rate Index (Label%) + Margin (Label%) = Label %
Payment Options Minimum Payment Interest Only 30 Year 15 Year
Interest Rate % % % %
Monthly Payment
Facts about this Pay Option ARM Loan / Pick a Payment Loan* ///
Payment Adjustments - Estimated first payment adjustment to the required mimimum payment based on typical adjustment of 7.5% over previous payment:
Monthly Negative Amortization - Estimated monthly negative amortization added to loan balance when making only the minimum required payment:
Yearly Negative Amortization - Estimated negatively amortized balance accumulated on original loan balance after a year of making mimimum payment:
Recast Period - Assuming loan "Recast" of Label %, this loan will recast to a fully amortized mortgage based on remaining years at time of recast, when loan balance reaches:
Recast Estimate - Estimated number of months of making minimum payments before loan will automatically "Recast" to a fully amortized mortgage: Months
New Mortgage Payment after Recast - Estimated mortgage payment after "Recast". New loan is fully amortized for remaining loan term of  Label months at fully indexed mortgage rate of Label %:  
Possible Pre-Payment Penalty Amount - If refinancing a Pay Option ARM  loan within first Label months, you may be faced with a loan pre-payment penalty. Following is the most common calculation to estimate the mortgage pre-payment penalty amount  based on the original loan balance and fully indexed mortgage rate:
* Pay Option ARM / Pick a Payment Mortgage Calculator Disclosures & Assumptions: Since it is impossible to estimate changes to future rates and indexes, all calculations are based on current rates entered by user. This is a worst case scenario assuming clients make minimum required payments at the current fully indexed rates. Assumes first interest rate adjustment after 1 month. Estimated time before recast maybe more or less do changing negatively amortized loan balance, compounding interest and possible changing rates. Payments do not include property taxes, insurance or possible PMI. Calculator is provided for informational purposes only. This is not a commitment to lend. The information provided on or through this site is for purposes of general consumer education only and is not intended as a substitute for advice from a qualified professional, such as, but not limited to, a lawyer, accountant, investment advisor, insurance broker, financial planner, real estate agent or home inspector. We can not and do not guarantee the accuracy or the applicability of this information to your circumstances. We encourage you to seek personalized advice from qualified professionals regarding all personal finance and real estate issues.


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