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even with a fixed rate mortgage. Interest only mortgages are only temporary

已有 805 次阅读2011-3-25 17:31 |

Many people get confused when it comes to interest only mortgages. It's no wonder. There is actually no such thing as a mortgage which you only pay the interest on. With an interest only mortgage, you still have to pay down the principal on the loan. What you actually get is an interest only payment method which lasts for a set period and then you revert to a more traditional type of mortgage.

As you probably know Links Sweetie Bracelet with One Gold Heart Charm, your mortgage payment mostly goes to pay off the interest; typically 95% of your payment goes toward the loan interest. So for a standard $100,000 mortgage at 6% interest, your monthly payment would be $600. Of that $600 Links Two Hearts Charm-red, $100 goes to pay down your principal and $500 goes to pay the interest charges.

Interest only mortgages involve jumbo loans and the difference in the monthly loan payment gets larger as the loan amount increases. So while there is a difference of $100 for a $100 Links Hearts Charm,000 loan Links Necklace, the difference on a $1 Links Back To School Chubby Blue Pencil Charm,000 Links Raindance 18ct Gold Earrings,000 loan would be $1000. Savvy investors can use that $1000 per month to leverage their income and build assets much faster.

Interest only mortgages have traditionally been used by investors or wealthy individuals who are able to make a profit on the principal part of their mortgage payment. However Links Red Heart Charm, today virtually anyone can obtain an interest only mortgage.

The payment period of the interest only mortgage is based upon the adjustable rate mortgage. However, sometimes Links Sugar Cane Finger Ring, it can be offered with a fixed rate as well. However, the payment period usually does not run for the entire loan term Wholesale Links of London Sweetie Bracelet, even with a fixed rate mortgage. Interest only mortgages are only temporary; InterstFirst loans only allow interest only mortgage payments to be made for half of the total loan term. When the interest only mortgage payments come to an end Links of London Watches Wholesale, the amount of your loan payment will then rise to include both the interest and principal.

Interest only mortgages have advantages for certain types of borrowers. For one thing, the payments at the onset are lower so this frees up additional cash to be used elsewhere It can be invested or it can be used for needed cash flow. The spare cash can be used in any manner such as additional income, college expenses Links Earrings Wholesale, or to build savings. The catch is that after a certain time Links Hat Charm, your interest only payments will expire and then your loan payment will be higher each month thereafter.

You are the only one who knows your situation and can determine if an interest rate mortgage is right for you. Consult with a banker or mortgage broker for advice and specific financial information such as projected monthly payments, then weigh your other mortgage options before you decide.

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