Option ARM
A type of adjustable rate mortgage that allows the borrower to choose the payment amount, each month, usually from the following four options: a minimum payment based on the borrower's initial interest rate, a payment that covers the interest that has accrued that month, a fully amortizing 30-year payment, or a fully amortizing 15-year payment.
Category: Real Estate & Rental Property

Nolo’s Plain-English Law Dictionary. . 2009.

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  • Option Adjustable-Rate Mortgage - Option ARM — A type of mortgage where the mortgagor (borrower) has several options as to which type of payment is made to the mortgagee (lender). In addition to having the choice of making payments of interest and principal that amounts to those made in… …   Investment dictionary

  • Secure Option ARM — A type of payment option adjustible rate mortgage with a fixed interest rate period. The mechanics of a secure option arm are very similar to a payment option arm except that it has a fixed interest rate period similar to fixed period or hybrid… …   Investment dictionary

  • Payment Option ARM Minimum Payment — An option to make minimum payments on an payment option ARM, which is a complex mortgage product with a temporary low interest rate. After the expiration of the temporary start rate, the borrower retains the option to make a payment equal to the… …   Investment dictionary

  • Payment Option ARM — A monthly adjusting adjustable rate mortgage (ARM) which allows the borrower to choose between several monthly payment options: a 30 or 40 year fully amortizing payment, a 15 year fully amortizing payment, an interest only payment, a minimum… …   Investment dictionary

  • option — [ ɔpsjɔ̃ ] n. f. • v. 1190; lat. optio 1 ♦ Faculté, action d opter. ⇒ choix. « La nécessité de l option me fut toujours intolérable » (A. Gide). « Ou pendus, ou noyés, nous n avions pas d autre option » (Hugo). ⇒ 1. alternative. Matières, textes… …   Encyclopédie Universelle

  • Tremolo arm — A tremolo arm or tremolo bar (also called a whammy bar or wang bar ) is a lever attached to the bridge and/or the tailpiece of an electric guitar or archtop guitar to enable the player to quickly vary the tension and sometimes the length of the… …   Wikipedia

  • Indian Naval Air Arm — The Indian Naval Air Arm is an important component of the Indian Navy. It undertakes several very important roles to support the Navy and project India s military power including aircraft carrier launched strikes against maritime targets, fleet… …   Wikipedia

  • Conversion Option — A clause associated with some adjustable rate mortgages that allows the borrower to convert the variable interest rate to a fixed rate within a certain time period, or at certain future dates. The conversion option is not free; an adjustable rate …   Investment dictionary

  • convertible ARM — An ARM for which the borrower has the option to convert from a floating rate loan to a fixed rate loan. Convertible ARMs can typically be converted in the first through fifth years of the mortgage loan. Because borrowers can exercise their… …   Financial and business terms

  • Convertible ARM — An Adjustable Rate Mortgage (ARM) that gives the borrower the option to convert to a fixed rate mortgage. Convertible ARMs are marketed as a way to avoid rising interest rates and usually include specific conditions. The financial institution… …   Investment dictionary

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