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Interest Only Mortgage Options

Interest only mortgage options can be an excellent tool for many individuals. Interest only mortgage products are designed to offer the lowest payment possible as you are not paying toward the principal in your payment. Interest only mortgage products may allow you can buy more home than with a fully amortizing mortgage. You may make additional payments toward your principal balance at any time. If you do, your next interest only mortgage 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 contributions to principal do not change the payment and are not accounted for until the end of the loan.

Interest only mortgage options and 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 payouts quarterly would benefit from an interest only mortgage. You have the lowest possible interest only payment during months when no bonus is paid and you would be able to make contributions to the principal balance when the  bonus is paid. However, I am seeing individuals in many situations choosing an interest only mortgage as an option to lower their payment, sometimes significantly.

Interest only mortgage options include a 30 year term, with the first10 years interest only and the final 20 years fully amortizing although I am now seeing many lenders offering this option on ARMs. Reduced documentation Interest only mortgage loans are readily available as well.

Again, an interest only 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:
On a $250,000 mortgage at 6.000% for 30 years-
Principal and Interest payment= $1498.88
Interest Only payment at 6%= $1250.00
Total Monthly savings= $248.88

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 programs available, the Cash Flow Interest Only Mortgage offers the greatest flexibility by far.

I have just developed a short PowerPoint presentation in .pdf format on interest only mortgage options, 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.

Interest Only Mortgage OptionsPrequalify for your interest only mortgage options.

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