Interest Only Adjustible Rate Mortgage
Interest only adjustible rate mortgage products can be an excellent choice for many individuals. Interest only adjustible rate mortgage products are designed to offer the lowest payment as you are not paying principal in your monthly payment. Interest only adjustible rate mortgage products may allow you to buy more home than with a fully amortizing mortgage. You may make additional payments toward your principal balance at any time. If you choose to do so, your next monthly payment will be lower as the payment is calculated based on the current loan balance. This is different than with a fully amortizing loan where any additional contributions to principal do not change the payment and are not accounted for until the end of the loan.
Interest only adjustible rate mortgage products were originally designed for individuals whose income is cyclical. For example, an individual who is a sales executive with a relatively low base salary but commission or bonus payouts quarterly would benefit from an interest only adjustible rate mortgage. You would have the lowest possible payment during months when no bonus is paid and you would be able to make contributions to the principal balance when the quarterly bonus is paid. However, I am seeing individuals in many situations choosing an interest only adjustible rate mortgage as a method of lowering their payment, sometimes significantly.
Interest only adjustible rate mortgage products are available for a 30 or 40 year term, with the first 5 or 10 years interest only (depending on the lender selected) and the final 20 to 25 years fully amortizing although I am now seeing some progressive lenders offering this option on ARMs. Reduced documentation Interest only mortgage adjustible rate mortgage products are readily available as well.
Again, an interest only adjustible rate mortgage is not the right choice for everyone, but it can be a very effective choice for some individuals. Please give me a call or send an email and I will be happy to discuss this alternative with you.
An example of how powerful this tool can be:
If you want to make the comparison for your own specific
situation, 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.
Of all of the interest only adjustable rate mortgage programs available, the Cash Flow Interest Only adjustible rate mortgages offers the greatest flexibility by far.
I have just developed a short PowerPoint presentation in .pdf format on interest only adjustible rate mortgages, some real world examples, and some suggestions on how best to use them available by email
Read more about interest only adjustible rate 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 interest only adjustible rate