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interest-only payments on your mortgage
loan for the first five or seven years of
your 30-yr amortized loan. These loans have been around for 10+ years but are
becoming popular among homeowners looking to buy
their first or higher-priced home.
see information below
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with interest-only mortgage loans, your monthly
payment is the interest rate charges for the
mortgage loan only. No principal payment is
being made.
The amount you payoff when you refinance is the amount you borrowed upon closing.
see information below |
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Interest-rate loans may vary by lender. They
are available in adjustable and fixed rate
terms. But generally, lenders will lend
you money under a 30-yr fixed-rate term.
see information below |
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lower monthly payments. You can afford
your first home or a higher priced home
by using interest-only loans. Your monthly
savings can be used to pay the principal
or other debts.
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no principal being paid during the interest-only
period. If home values decline, you could
lose money. Once the interest-only payment
term expires (usually in 5-7 years), your
monthly payment will increase substantially.
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you can start with the minimum payment plan and use our mortgage payoff plan to help payoff your mortgage in 1/3rd of the time saving your thousands in interest
see how the mortgage payoff plan works
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Interest-Only
Fixed Rate Mortgages
The advantage of interest-only loans is that
you begin with a smaller payment during the
first 5-7 years of the mortgage. Smaller payments
can qualify you for a bigger home.
Since many homeowners expect to move or refinance
their homes within the same period, these homeowners
with interest-only loans will simply move out
of the loan obligation by taking on a new mortgage
at a time that their expected salary will be
higher.
Interest-only loans also benefit applicants
whose income is mostly in the form of commissions
and bonuses. Interest-only loans allow them
to afford a higher-priced home on their current
salary. And when their bonus or commission money
is paid, they can take the proceeds and pay
down the mortgage.
- allows you to afford a bigger home
- allows you to get into your first home
with lower payments
- allows you to reduce your housing ratio
- allows you to invest monthly savings into
better returns
- allows renters to effectively "lease
their home" for tax benefits
- allows you to maximize your cash flow
- you are not building equity
- if markets decline, you may lose money
- allows consumers to carry too much debt
- higher payments or refinancing at end
of the interest-only term my negatively
impact cash flow
- consumer runs the risk of not being able
to meet debt obligations if personal economics
fail to materialize
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loan
comparison calculator
download amortization worksheet:
click
here to download
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