Advantages of Interest Only and Option ARM'sDespite the risks of these loans, an I-O mortgage payment or a payment-option ARM might be the right choice for your particular situation if the one or more of following apply:

  • When the application of Strategic Equity Management (SEM) strategies successfully manages home equity to increase liquidity, safety, rate of return, and tax deductions.

  • You have modest current income but are reasonably certain that your income will go up in the future (for example, if you’re finishing your degree or training program)

  • Sizable equity in your home and will use the money that would go toward principal payments for other investments, or

  • Irregular income (such as commissions or seasonal earnings) and want the flexibility of making I-O or option-ARM minimum payments during low-income periods and larger payments during higher-income periods.

It’s critical homeowners work ONLY with qualified Mortgage Planners that fully understand SEM concepts and can discern to whom they apply and whom they do not. SEM strategies are NOT for everyone…they have their time and place. Of the 250,000 loan originators in the country, less that 1% fall under this category…I happen to be one of them.

Links to previous articles in this series:


Tony Gallegos – Serving the mortgage needs of Kennesaw, Marietta, Roswell, Smyrna, Powder Springs, Dallas, Acworth, Woodstock, Douglasville, Hiram, Austell and Atlanta. Subscribe to The Mortgage Cicerone:


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