Interest Only Payment

An interest only payment is one option for making your monthly payment with the Cash Flow Option ARM. The interest rate for an interest only payment is calculated using an economic index (ask your Alerio representative about the index tied to your loan), and a margin, which will be fixed for the life of the loan. The interest only payment can change monthly according to the activity of the economic index used for your loan. If making the interest only payment each month, it is not possible to accrue deferred interest. If you choose to pay an additional amount to the interest only payment, the difference will be applied to the principal portion of the loan. Like the minimum payment option, making additional payment can help reduce the balance of the loan substantially and save you a tremendous amount of money over time.