Interest Only Mortgage Refinance
Interest only mortgage refinance products can be an excellent choice for many consumers. Interest only mortgage refinance products offer the lowest payment. Interest only mortgage refinance products mean that if you refinance into an interest only mortgage, you will have a lower payment than with a fully amortizing mortgage. You may make additional payments toward your principal balance at any time. By reducing the balance, the next interest only mortgage payment will be lower as your payment is calculated on the current amount. This is a different than a fully amortizing mortgage as extra payments do not change your payment at all.
Interest only mortgage refinance products are available for a 30 year term, with the first 10 years interest only and the final 20 years fully amortizing although I am now seeing many lenders offering this option on Interest Only Mortgage Refinance ARMs with fixed rate periods of 3, 5, and 7 years being common. At the end of the interest only period, your mortgage will convert to fully amortizing for the remaining term. There will be a payment increase at that time so you will want to select a product with the longest interest only period available.
Of all of the Interest Only Mortgage Refinance programs available, the Cash Flow Interest Only Mortgage Refinance product offers the greatest flexibility by far.
Interest only mortgage refinance products were originally designed for individuals whose income is cyclical. For example, a sales executive with a relatively low base salary and commission payouts quarterly would benefit from an interest only mortgage. You have the lowest possible payment during months when no bonus is paid and you can make contributions to the principal balance when the bonus is paid. However, I am seeing individuals in many situations choosing an interest only mortgage refinance as a method of lowering their payment, sometimes significantly.
This, or any other product, will not be the right choice for everyone, but it can be a very effective choice for some individuals. Please 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:
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.
I have developed a PowerPoint presentation on these products, 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.
for your interest only mortgage refinance.