This particular loan doesn't require a set payment each month. Instead, after your first initial payment, you will receive a monthly statement. On the statement you will have the choice of choosing which option you would like to use for that month: 15-year amortized payment; 30-year amortized payment; a variable interest only payment; or a fixed, negative amortization payment. The amortization options can lead to a quicker loan payoff.

This is a perfect option for investment properties that need immediate cash flow, who'd like to own their property only for a short time, and who prefer affordability and flexibility in monthly payments. Pay Option ARMs typically have a low introductory start rate allowing you to make very low initial mortgage payments and low qualifying rates enabling you to qualify for more home. Be aware that if you opt for the minimum payment option initially, you should be prepared for a possible increase ("payment shock") in your monthly payments afterwards. Also note that the initial interest rate holds only for the 1st month.