Interest Only Mortgage
Fixed rate Interest only mortgage products can be an excellent
choice for many consumers. Fixed rate interest only mortgage products offer the
lowest payment. Fixed rate interest only mortgage products mean you can buy more
home, or if you are refinancing into a fixed rate interest only mortgage, you
will have a lower payment than with a fully amortizing mortgage. You may make
additional payments toward your principal balance at any time. By reducing the
balance, the next payment will be lower as your payment is calculated on the
Fixed rate interest only mortgage products are available for a 30 or 40 year
term, with the first 10 years interest only and the final 20 years fully
amortizing although I am now seeing many lenders offering this
option on Interest Only Mortgage ARM products with fixed
rate periods of 3, 5, and 7 years being the most common. At the end of the
interest only period, your fixed rate interest only mortgage will convert to
fully amortizing for the remaining term.
Stated income fixed rate Interest only mortgage products are readily available as
Of all of the Interest Only Mortgage programs available, the
Flow Interest Only Mortgage offers the greatest flexibility by far.
Fixed rate interest only mortgage products were originally designed for individuals whose income is
cyclical. For example, a sales executive with a relatively
low base salary and commission payouts quarterly would benefit from a fixed rate
interest only mortgage. You have the lowest possible payment during months
when no bonus is paid and you can make contributions to the
principal balance when the bonus is paid. However, I am seeing
individuals in many situations choosing a fixed rate interest only mortgage as a method of lowering
their payment, sometimes significantly.
This, or any other product, will not be the right choice for everyone, but it can be a very effective
choice for some individuals. Please call or send an
with the specifics of your situation
and I will be happy to discuss this alternative with you.
An example of how powerful this tool can be:
On a $250,000 mortgage at 6.000% for 30 years-
Principal and Interest payment= $1498.88
Interest Only mortgage payment at 6%= $1250.00
Total Monthly savings= $248.88
To make the comparison for your own specific
situation, mortgage calculators to find the
amortizing payment are available on this website. The math to find the simple interest payment is, Loan Amount x Interest Rate / 12.
have developed a PowerPoint presentation on
only mortgage products,
some real world examples, and some suggestions on how best to use them available
Read more about Fixed Rate Interest Only
Mortgage Closing Costs
As a Certified Mortgage
Planning Specialist, I offer an analysis of
your situation today can make suggestions on how small changes in how
your debt is structured today can have a life changing effect in the years
to come. Read more
about this free, no obligation service.
for your fixed rate interest only mortgage.