Interest Only Loans. Before you make a decision, read this
information.
Interest only loan is the one that gives you the possibility of
paying only interest as your monthly payment. In that way you
will pay a very reduced amount of money as your monthly payment;
compared to the amount of money you would be paying if you add
the principal to your monthly payments. Interest only loans can
be 30-year fixed-rate mortgages or adjustable rate mortgages.
You may find interest only loans on the market, for the first
three, five, seven or even ten years. Home prices are
continuously raising, so many buyers are choosing the
interest-only loans option to reduce their mortgage payments and
gain more financial freedom.
You may find an excellent source of information about Interest
Only Loans at: www.findhomeloansonline
.com
The biggest advantage of an Interest only mortgage is that you
will have a reduced monthly payment; in that way you will count
with extra money for other purposes. But, on the other hand, the
disadvantage of it is the fact that you will not be paying
anything towards the principal balance of your loan. It's
important to fully understand the risks, when you decide to buy
a property with an Interest only Loan. For the lender, the big
advantage is that all the lender's money will be busy earning
interest and none will be unprofitable return of principal,
which the lender then has to lend to another borrower to keep
earning interest.
During the interest only term your monthly payments are as low
as they could possibly be, and you may qualify for a bigger
property as well as for a bigger loan amount at the same time;
and your whole monthly payment qualifies as tax deductible
interest during the interest only period. If you are like most
first-time home buyers, you will probably keep your property for
a few years only, and then you will be moving up to a better
home. Mortgage principal reduction then isn't important to you.
An interest-only mortgage could be ideal for you.
It's important to understand that during the period of time you
are holding an interest only loan, your property is building
equity just as if you would be holding a fix rate mortgage. The
type of loan you choose to buy your property will not affect the
equity of your home.