loan allows you to pay just the interest on the mortgage for a
set period, may be the first five, 10 or 15 years. You don't
have to pay principal during this period. When the interest-only
phase is over, the monthly payments skyrocket as you now have to
pay principal over the remaining term of the loan.
attraction of an interest-only mortgage is the lower monthly
payment. If you don't expect to have the mortgage very long it
is good to select an ARM because the rate will be lower, and it
makes sense to avoid paying points because there won't be much
time to recover your investment through a lower rate.
Interest-only loans are not a type of mortgage. it
is an option that can be included with any type of mortgage.
It is less costly to amortize an interest-only loan.
interest only loan Sites:
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