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Jumbo Interest Only MortgagesJumbo Interest only mortgages can be an excellent choice for some borrowers with a loan amount above $417,000. Jumbo interest only mortgages are designed to offer the lowest payment possible as you are not paying toward the principal. Because of the lower payment, jumbo interest only mortgages mean that you can buy more home. Of course, you may make additional payments toward your jumbo interest only mortgages principal balance at any time. Jumbo interest only mortgages were originally designed for individuals whose income is cyclical. For example, a sales executive with a relatively low base salary but bonus payouts quarterly would benefit from interest only mortgages. 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. Generally, interest only mortgages 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 some progressive lenders offering this option on Jumbo Interest Only Mortgage ARMs. Some lenders who offer an interest only mortgage require a prepayment penalty for the first 1-3 years and have caps on the amount your rate can change at any time and over the life of the loan. I always try very hard to avoid prepayment penalties on these and other types of loans and can usually work around the requirement. Again, jumbo interest only mortgages are not the right choice for everyone, but they 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: 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. Read more about Jumbo Interest Only Mortgages Closing Costs Many lenders offering interest only mortgages are now basing them on the LIBOR Index. There are many variations of this important product group. Read more about Libor ARMS. Of all of the interest only programs available, the Cash Flow Jumbo Interest Only Mortgages offers the greatest flexibility by far. The new Asset Manager is a creative program which gives you significantly lower interest only payments and build equity faster. I have just developed a short PowerPoint presentation in .pdf format on interest only mortgages, some real world examples, and some suggestions on how best to use them available by email Learn more about investing 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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