Interest Only Home Loan Rates
There was a time in recent memory when an interest only home loan would've been available to anyone with good credit. But now with the economy floundering and credit tight, many lenders aren't even offering them to those have historically sought interest-only home loans. But here at InterestOnlyLoanRates.net, like the name suggests, we are specialists in this type of home mortgage loan!
Who would have historically sought an interest only home loan for the rates? Affluent borrowers generally, such as an executive who earns a moderate monthly salary but whose main income will come in large bonuses once or twice a year; such people would then pay down their principal with those windfalls of cash. In between those bonuses, the interest only payment is low and allows a more comfortable standard of living. Entrepreneurs also sought out these types of mortgages. But the lower monthly payments can also be a real boon to young professionals who expect their future income to increase rapidly.
What Is an Interest Only Home Loan?
It's fairly simple arrangement really: for the first several years of the loan, the borrower literally only has to pay the interest on the loan. And after that initial term - perhaps 5 to 7 years - the borrow then has to pay an increased mortgage payment that includes both interest and principal, but this increase in monthly payment can be prohibitive. (But the smart borrow knows they can refinance!) Some interest only home loans also include a balloon payment clause, which essentially means that after the interest only period, the entire principal comes due. Many borrowers refinance when the balloon payment comes due to protect themselves.
Sophisticated homeowners know that having this type of payment flexibility is one of the smartest ways to manage your personal finances. In addition to its simplicity, interest only home loans offer great flexibility: with an interest-only loan, in months when you need more cash, you don't have to pay principal and interest. You can just pay the interest. How's that for flexible!
The Smart Money Is Interest Only!
Want Money to Work for You? Then go interest only!This is definitely a excellent choice for anyone looking to make their finances more flexible and available for investing. Imagine taking the hundreds a month you'd save not paying principal and putting that into an investment which brings a return! You certainly don't have that option with a traditional mortgage. This can be especially helpful today when so many have lost in their 401k plans and the like. Now may be the time to recoup losses.
But it's not just about having money to invest. Look at these possibilities:
- Pay down high-interest credit card debts!
- Put money aside for college funds!
- Get that second car for the family or your teen!
- Improve your home without taking out a home equity loan!
- Save for the unexpected costs of life!
And those who plan to turn over their current home or who don't plan to stay put for long can literally sell their house before the balloon payment comes due. So, if you are money savvy, an interest only home loan may just be the right thing for you.