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Option Arm
A type of adjustable rate mortgage that allows the borrower to choose the payment amount, each month, usually from the following four options: a minimum payment based on the borrower's initial interest rate, a payment that covers the interest that has accrued that month, a fully amortizing 30-year payment, or a fully amortizing 15-year payment.
LA-WS5:DRU.1.4.1.130427.19500