LoanCity, a wholesale lender based in San Jose, Calif., has unveiled the Take 5ive Option ARM, which it says combines the most attractive features of a payment-option adjustable-rate mortgage with the interest rate stability of a 5/1 hybrid ARM.The new product, which is available in most states, gives borrowers the options to pay at the low start-rate for up to five years; pay interest only; pay at a 15-year rate; or make regular principal and interest payments at a 30-year-level. Unlike most option ARMs, the note rate for the new product does not reset monthly; it is fixed for five years. (The current start rate is 2%.) LoanCity said its underwriting of the Take 5ive Option ARM is "extremely flexible." The product has a maximum loan amount of $3 million and can be matched with a piggyback home equity line of credit or loan from LoanCity. Borrowers can have credit scores as low as 620. Rick Soukoulis, chief executive officer of LoanCity, said the product "removes one of the biggest concerns about pay options: the monthly reset feature, which can create anxiety in a rising rate environment." The company can be found online at http://www.loancity.com.

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