What is a Interest only Mortgage
When shopping for a home the type of mortgage that you choose can save you thousands of dollars. Let’s take a look at interest only mortgages. An interest only mortgage is one way that you can get an initial lower rate on your home purchase.
Are You Considering a Interest Only Mortgage?
How interest only Mortgages Work.
Interest only mortgages work by having a payment plan setup that will only pay the interest on the home for the first couple of years. This does a could of different things for the homeowner who chooses this type of mortgage.
1. Mortgage payments are a lot lower – This is because you are not paying the principal on the home.
2. Great for the first time buyers who are interested in having lower payments.
3. Payments on interest only last up to 120 months, which then payment increases for principal
4. The number of payments you have to make is reduced
5. Establish security in your home
So, if you are searching for an option to make a lower initial payment having an interest only mortgage might be right for you. The interest only mortgages are only valid for up to 120 months when you purchase the home. After that, your payments will go up to help reduce the principal.
There are two available types of interest only mortgages. The 30 year interest only mortgage and the 40 year interest only mortgage. The biggest difference in these two type s of montages is the length of the loan as well as the length you are allowed to make interest only payments. On the 30 year, loan only the first 60 months max that you are allowed to make interest only payments. The 40 year loan you can make them for 120 months.
Interest only montages are perfect for people who are a first time home buyer, because it will lower their initial monthly payment by a few hundred dollars. This allows people to become secure and take that money to reinvest in their property. It is also perfect for people who are in sales and receive commission or bonuses this puts them in a better position at the end of the year. This is also perfect for people who are older and on fixed incomes. It gives them the opportunity to save a little bit more for the first few years.
Yet, always remember that when you are paying interest only always try to make at least a few payments towards the principal if you can. A few hundred dollars a couple times a year will still substantially reduce the number of payments you have to make and lower your payments a little bit more when the interest only payments end.
- Traditional Mortgages vs Self Build Mortgages
Mortgages are one of the most important things to understand when deciding to purchase a home. Now there are a couple of different types of mortgages that suite most people’s needs. These mortgages are the self build mortgages and a traditional mortg - Mortgages for People with Bad Credit
Even if you have bad credit you still wualify to own your own home. Here is some information that will allow you to get the home of your dreams even with bad credit. - How to Refinance Your Mortgage
Refinacing your Mortgage is not has hard as some make it out to be. There are some things you want to keep in mind when you decide to refinace. Here, are some of the things to get the most out of your refinace. - Mortgage Jargon in Simple Terms
Mortgage Jargon is one of the hardest things to understand when it comes to purchaseing a home. So i have taken alot of these terms and explain them clearly and simply so you know exactly what they are. - 3 Tools To Sell Your Home Online
There are alot of things that we can utalize over the interent to help ourselves leverage our home. The rsults in advertising online will help your home quickly and easily. Use the following three tips to sell your home. - 5 Tip For New Home Buyers
Searching for a new home? There are 5 things you should consider before purchasing a new home. Lets take a in depth look into what thye are
