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Interest Only LoansInterest only loans can be an excellent choice. Interest only loans are designed to offer the lowest payment possible as you are not paying toward the principal in your payment. Interest only loans may mean that you can buy more home than with a fully amortizing mortgage. Interest only loans are flexible. You may make additional payments toward your principal balance with interest only loans at any time. If you do so, your next payment will be lower as it is calculated on the current balance of your interest only loan. This is different than a fully amortizing loan where any additional contributions to principal do not change the payment and are not accounted for until the end. Email interest only loans questions Interest only loans 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 payouts quarterly would benefit from interest only loans. You have the lowest possible interest only payment during months when no bonus is paid and be able to make contributions to the principal balance when the quarterly bonus is paid. However, I am seeing individuals in many situations choosing interest only loans as a method of lowering their payment, sometimes significantly. Interest only loans are available for a 30 year fixed 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 interest only loans ARMs. Reduced documentation interest only loans are also readily available Again, interest only loans are not the right choice for everyone, but they can be a very effective choice for some. Please give me a call or send an email 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: Of all of the interest only loans available, the Cash Flow interest only loans offer the greatest flexibility by far. I have developed a short PowerPoint presentation on interest only loans, some real world examples, and some suggestions on how to use them available by email I offer an analysis of your situation today can make suggestions on how small changes in how your mortgage is structured today can have a life changing effect in the years to come. Read more Read more about Interest Only Loans Closing Costs In 2008, Short Sales are where most of the bargains in real estate are. Learn more about Short Sales 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. New! View my Wealthbuilder presentation and learn the safe way to manage your debt and fund your retirement. I hope the information on this page was useful to you. Please scroll down to view my Mortgage Market Guide. It is a weekly publication explaining the financial markets from a consumer's perspective that is available on this website or by email subscription. I have nearly 8,000 subscribers today and would be happy to have you as well. Your email address will never be used for any other purpose.
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