One of the newest mortgage programs on the market these days is the option arm mortgage, also known as the pick-a-payment mortgage. There are at least 4 good reasons why many borrowers are flocking to these mortgages... they give the borrower 4 different choices for payment amounts each month.
The first payment choice can be based on a starting rate as low as 1%. The second payment choice can be based on an interest only option. The third payment choice can be based on a principal and interest payment amortized over 30-years. And, for those who want to build equity faster, or just pay their home off sooner, the fourth choice is a principal and interest payment based on amortization of your mortgage over a 15-year term. Essentially, the option arm gives borrowers flexible options each month to manage their cash flow and monthly budget with more control.