How do interest only mortgages work and what is the catch? - interest only mortgge
Have to 7.25% on a mortgage over 30 years quoted at a fixed rate basis. He also referred to 6,375% in 30 years to pay interest than expected. Although this reduces the monthly payment, like a mortgage? If you need additional payments to reduce principal?
Monday, January 4, 2010
Interest Only Mortgge How Do Interest Only Mortgages Work And What Is The Catch?
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2 comments:
An interest-only mortgage does exactly what it is - you only pay the interest. For example, a loan of $ 100,000 @ 6% interest for 30 years = a payment of $ 500. If you pay in 30 years, would the regular mortgage payment $ 600. 100 is used to pay the loan. The only way is to pay the mortgage, or more per month pay, as and additional payments during the year. However, IO (interest only) loans have many advantages if you do not plan to stay home for long, for example, and investors, or someone who is ahead in the future. The reason is that, although they do not pay mortgages are still working on equity in your home and pay only the minimum payment to stay there until you sell. Hope this helps.
I wrote a whole blog on this topic. I hope this is helpful. I have a huge amount of analysis on this issue.
In short - do not worry if they can afford the only way to the house. If not, are excellent for the right customers.
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