Fixed Rate Cash Flow Loans are a newer type of mortgage offering multiple payment options designed to allow borrowers to control their cash flow on a monthly basis. Fixed Rate Cash Flow Loans are notable because unlike other loans which offer minimum payment options, their rate remains fixed for a set period of time, or in some cases for the entire term of the loan.
Fixed Rate Cash Flow loans allow borrowers to actually defer the interest due in any given month until a later date, making the fixed rate cash flow loan an excellent choice for the borrower who desires a negative amortization home loan without the risks of unpredictable adjustable rate mortgages (such as Option ARM mortgages)
Fixed Rate Cash Flow loans are frequently used to refinance Option ARM mortgages. Unlike Option ARM mortgages, the rate of a Fixed Rate Cash Flow loan does not change during its fixed period, which allows borrowers to consistently determine their payments and the amount of interest they will be deferring in a given month by making the minimum payment.
A hybrid Option ARM would be a good Fixed Rate Cash Flow program.
A hybrid Option ARM would provide a small enough minimum payment that would
allow for increased cash flow. While the minimum payment may still incur
negative amortization, it would still allow for a way to increase cash flow.
Many borrowers who receive commission income or any other type of variable income enjoy the options available with cash flow loans. A fixed rate gives stability coupled with options to pay down your loan.
Cash flow loans are designed so you do not defer to much interest. They achieve this by recasting. The recast time period will vary depending on what lenders program your mortgage broker uses.
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Information listed above is to be used for educational purposes only and is not guaranteed