Cash flow ARM

A cash flow ARM is a minimum payment option mortgage loan.

This is a fancy term for a loan that allows a borrower to choose their monthly payment from several options.

These payment options usually include the option to pay at the 30 year level, 15 year level, interest only level, and a minimum payment level.

The minimum payment level is usually lower than the interest only payment.

This type of loan can result in negative amortization.

The option to make a minimum payment is usually available only for the first several years of the loan.

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