Housing prices are at record highs. This has made purchasing a new home a very expensive proposition. In response to this mortgage lenders began offering products with lower monthly payments; this allowed people to qualify for larger loan amounts.

The problem with these new loans is that they come with adjustable interest rates. As long as interest rates remain low the monthly payments remain low. The problem comes when interest rates go up and there is a dramatic increase in the monthly mortgage payments. This is a problem inherent to any adjustable rate mortgages. Option mortgages take this problem and build on it in a very bad way; some call these loans the most dangerous mortgage ever.

Option adjustable mortgages are simply adjustable rate mortgages with flexible payment options. Doesn