Interest Only Jumbo Loan
Interest only jumbo loan products have loan amounts above $417,000 and can be an excellent choice. Interest only jumbo loan products are designed to offer the lowest payment as you are not paying toward the principal. The interest only jumbo loan may mean that you can buy more home than with a fully amortizing loan because of the lower payment. An interest only jumbo loan is flexible. You may make additional payments toward your interest only jumbo loan balance at any time. If you do, your next payment will be lower as the payment is calculated on the current loan balance. This is different than with a fully amortizing loan where any additional contributions to principal are not accounted for until the end of the loan.
Interest only jumbo loan products were originally designed for individuals whose income is cyclical. For example, a sales executive with a relatively low base salary and commissions would benefit from an interest only mortgage. You have the lowest possible payment during months when no bonus is paid and would be able to make contributions to the loan when the bonus is paid. However, I am seeing individuals in many situations choosing an interest only jumbo loan as a method of lowering their payment, sometimes significantly.
Interest only jumbo loan products are available for a 30 year term, with the first 5 or 10 years interest only and the final 20 to 25 years fully amortizing. I am now seeing some progressive lenders offering this option on Interest only jumbo loan ARMs. Reduced documentation Interest only jumbo loan products are readily available as well.
Again, an interest only jumbo loan is not the right choice for everyone, but it can be a very effective choice for some. 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 interest only jumbo loan payment is, Loan Amount x Interest Rate / 12.
Many lenders offering interest only jumbo loan products are now basing them on the LIBOR Index. There are many variations of this important product group. Read more about Libor Interest Only Jumbo Loan.
Of all of the programs available, the Cash Flow Interest Only Jumbo Loan offers the greatest flexibility by far.
Read more about Interest Only Jumbo Loan Closing Costs