The Option ARM Loan (a.k.a. "Negative Amortization Loan") is no longer available. I include it here for the few people who still have one.
It has pros and cons. It is the most misunderstood and misused loan in our industry. It was so abused in the past, that lenders no longer offer it. That's a shame, because people who got loans with low margins are thrilled right now. Their rates are very low. I always gave my clients the lowest margin I could find, typically 2%. The MTA Index was usually the index used for Neg-am loans. The MTA is very low now, and will be for awhile.
If a lender in your area is offering a Negative Amortizion Loan, and you are considering it for your home, please read the that chapter in my book. It will help you thoroughly understand how the loan works, and whether it is right for you.