One of the most creative products that doesn't require a set payment each month is the Pick-A-Payment Option ARM program. On your monthly statement you will get four payment options to choose from each month: offering a minimum payment (1), interest-only payment (2), 30-year amortized payment (3) or 15-year amortized payment (4).

You have the option of making any of the 4 payment options plus a fifth payment option which is any amount you choose to pay as long as it is higher than the minimum payment.

The advantage of negatively amortizing loans is that you can control cash flow (relatively stable payment), take advantage of low interest rates relative to the market at any given time, and pay back the money borrowed today at a depreciated value years from now (because of natural inflation). This makes such loans a great tool for homeowners as long as you understand the mechanics of what's going on.

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