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Frequently Asked Questions
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| What is an interest only mortgage loan? |
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Question:
What's an interest-only mortgage?
Answer:
An interest-only mortgage loan is one in which the homeowner pays
interest only for some initial period of the mortgage loan's terms. The
option to pay interest only lasts for a specified period, usually 5 to
10 years. Obviously, this type of mortgage loan will result in a lower
mortgage payment during the initial phase (because you'll only being
paying the interest at first, and not the principal), but this can lead
to consequences later on.
If a home buyer has an income that fluctuates, the interest-only
mortgage may be a good option for them. That way, they can pay more
each month to chip away at the principal when their income is up, and
they can make smaller interest-only payments when their income is down.
As with any type of mortgage loan, however, their are pros and cons to
the interest-only option. So we've listed some resources below to help
you learn more.
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| Article ID: 10002 |
Article Created: 11-26-2007 10:08 AM | Last Modified: 05-18-2008 09:02 AM |
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