Interest Only Mortgage Loans - Low Monthly Payments
Make Only Interest Payments on Your Mortgage Loan
Interest-only loans are structured so the borrower only pays the interest on a mortgage balance for a certain amount of
time. During this time period, the principal balance doesn't change. At the end of the interest-only period, the borrow
has a few options. He may enter another interest-only program, he can pay the principal outright, or he can get a
standard P&I (principal and interest) mortgage.
As far as interest-only mortgages go, a 5 or 10 year interest-only period is quite typical. After the interest-only period is over, the principal balance is usually amortized for the remaining number of years in the mortgage. These loan programs are often sought because they make certain borrowers able to buy a home (or buy a better home) who would otherwise not be able to afford it. During the interest-only period, the payments are substantially lower because none of the principal amount is being paid. Something to consider if you're thinking about an interest-only loan is that during the interest-only period, you will not earn any equity on your home. You are a homeowner, but you are not accruing equity. This means that you will not be able to borrow against your home (such as with a home equity loan). Also, you will still have to pay property taxes and will likely be required to purchase homeowner's insurance, even though you are not paying down any of the balance on your principal balance. Here are some reasons you might consider an interest-only loan:
You expect that you will earn a significantly higher salary a few years down the road Your current income is often in the form of commissions or other unpredictable sources You plan to invest the monthly savings that you would have otherwise put towards your principal payment |
|
Frequently Asked Question
Can I pay off my mortgage loan early? Answer:
Yes. Making periodic extra payments or sending in extra money with your normal payment will add up and greatly reduce the payoff time for your loan. Some lenders charge a prepayment penalty if you pay your loan off early, but nowadays it is more likely that you will not encounter prepayment penalties. |

Related Home Loan Calculators

See Also
National Financer Provides Interest Only Home Loan Quotes in all 50 States:
- Alabama Home Loans
- Alaska Home Loans
- Arizona Home Loans
- Arkansas Home Loans
- California Home Loans
- Colorado Home Loans
- Connecticut Home Loans
- Delaware Home Loans
- Florida Home Loans
- Georgia Home Loans
- Idaho Home Loans
- Illinois Home Loans
- Indiana Home Loans
- Iowa Home Loans
- Kansas Home Loans
- Louisiana Home Loans
- Maine Home Loans
- Maryland Home Loans
- Massachusetts Home Loans
- Michigan Home Loans
- Minnesota Home Loans
- Mississippi Home Loans
- Missouri Home Loans
- Montana Home Loans
- Nebraska Home Loans
- Nevada Home Loans
- New Hampshire Home Loans
- New Jersey Home Loans
- New Mexico Home Loans
- New York Home Loans
- North Carolina Home Loans
- North Dakota Home Loans
- Ohio Home Loans
- Oklahoma Home Loans
- Oregon Home Loans
- Pennsylvania Home Loans
- Rhode Island Home Loans
- South Carolina Home Loans
- South Dakota Home Loans
- Tennessee Home Loans
- Texas Home Loans
- Utah Home Loans
- Vermont Home Loans
- Virginia Home Loans
- Washington Home Loans
- West Virginia Home Loans
- Wisconsin Home Loans
- Wyoming Home Loans
| Begin the Quote Process |

You expect that you will earn a significantly higher salary a few years down the road
Collateral