A great way to reap the benefits of a low minimum payment while having the security of a fixed interest rate is with a fixed rate pick-a-payment loan. These loans have a base fixed rate and allow you to choose from several different payment options.

Fixed rate pick a pay programs offer you the opportunity of having a low payment. This can be beneficial to increase cash flow and create flexibility.

There are some Fixed Rate Pick a Payment loan programs available that are not fico score driven, but rather look at the overall credit, asset, and equity picture in underwriting a loan. These non-fico driven programs can often be stated income loans, as long as there is 20% or more equity in the loan.

Another term for a Fixed Rate Pick a Payment is a Hybrid Option ARM.

Borrowers must exercise caution and restraint when entering into a pick a payment mortgage loan. They must understand that the interest on the minimum payment is deferred back onto the mortgage balance and the money saved by making the minimum payment must be used wisely.

It is important to know the interest rate and terms of the fixed portion of the pick a payment program. Fixed Rate Pick a Pays typically have a lower rate of interest than the fully indexed adjustable rate pay option arms currently available. Many of the Fixed Rate Pick a Pay programs have competitive pricing when you consider many do not need income verification or a specific credit score to qualify.

Among those who may benefit from a fixed rate Pick A Payment loan: self-employed borrowers who receive irregular income, employees who receive large year end bonuses as part of their compensation, investors, and those who need to put significant funds into retirement accounts.