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Interest Only Mortgage Loans

Interest only mortgage loans can be an excellent choice for some individuals. interest only mortgage loans are designed to offer the lowest payment possible as you are not paying toward the principal in your normal monthly payment. Interest only mortgage loans may mean that you can buy more home than with a fully amortizing mortgage. Of course, you may make additional payments toward your principal balance at any time. If you choose to do so, your next interest only mortgage payment will be lower as the interest only mortgage payment is calculated based on the current loan balance. This is different than with fully amortizing loans where any additional contributions to principal do not change the payment and are not accounted for until the end of the loan.

Interest only mortgage 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 or bonus payouts quarterly would benefit from an interest only 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 this option as a method of lowering their payment, sometimes significantly.

Interest only mortgage loans are available for a 30 year fixed term, with the first 5 years interest only and the final 20 years fully amortizing although I am now seeing some progressive lenders offering this option on ARMs Reduced documentation Interest only mortgage loans are readily available as well.

Again, these products are 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:

On a $250,000 mortgage at 6.000% for 30 years-
Principal and Interest payment= $1498.88
Interest Only payment= $1250.00
Total Monthly savings= $248.88

Of all of the programs available, the Cash Flow Interest Only Mortgage Loans offer the greatest flexibility by far.

I have just developed a short PowerPoint presentation in .pdf format on interest only mortgage loans, some real world examples, and some suggestions on how best to use them available by email

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.

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