An interest-only mortgage is a type of home loan that enables the borrower to makin payments solely towards the interest for the initial years of the mortgage, unlike payments that include both principal and interest. Interest-only loan payments can be designated for a defined timeframe, offered as an option, or extend throughout the entire loan term, requiring repayment of the entire amount at the end.
Does an Interest Only Mortgage Offer a Lower Monthly Payment?
Typically, interest-only loans are configured as a specific subtype of adjustable-rate mortgage (ARM). Although interest-only mortgages result in lower payments temporarily, they also mean no accumulation of equity and entail a substantial increase in payments when the interest-only period concludes.
Many new home buyers have benefitted from the low monthly payment derived from an interest only mortgage. Let our lenders help you compare low interest loans online for home buying or refinancing. The interest only mortgage has become very popular refinance options in the last few years. Interest only loan features offer borrowers a reduced payment option for home refinancing with cash out opportunities like second mortgage
and home equity credit lines
that include low rate payments for people with good and bad credit.
Whether you are purchasing a home, refinancing your mortgage or taking out a new second mortgage, interest only loans have become popular features for almost every loan program today.
Compare Low Payments with an Interest Only Loan or Credit Line.
People love interest only features because it keeps their monthly payments as low as possible. Unlike negative amortization loans, interest only loans do not defer any interest so you will never have a mortgage lender adding debt to your principal loan balance. Nationwide Mortgage Loans offers hybrid loans that feature a fixed interest rate for 2,3,5,7, or 10-years with interest only payment options. Take advantage of increased cash flow and benefit from the reduced monthly payments created by interest only mortgages from the premiere refinancing leader online.
- Interest Only Mortgage Refinance
- Home Purchase Loan with Interest Only Options
- Interest Only Home Equity Line of Credit
- Interest Only with Payment Option ARM
- Fixed Rate-Interest Only Loans
- Interest Only 2nd Mortgages
It’s not too late to refinance and a lower your monthly payment with the interest only mortgage loan. Nationwide Mortgage Loans offers many interest only programs for second mortgage, home equity loans and 1st mortgage loans. Refinancing your mortgage can save you thousands of dollars a year.
Are Interest Only Mortgages Too Risky?
Interest only home loans have been the topic of many industry conversations when considering risk factors. Interest only payments have lower monthly payments for the introductory period which lasts between 1 and 10 years in most cases. Since interest only payments do not pay down any portions of the principal balances, and then borrowers must budget accordingly to pay off their balances.
Linda’s Advice for Interest Only Mortgages– Ask Linda?
Interest only loan require some discipline. If you make a little extra payment towards principal each month, then your loan can be paid off earlier. Get a plan, and request a few amortization schedules for 15, 20 & 30 years.
Should I Get a Refinance Loan With a Fixed or Adjustable Rate?
Home equity can be converted into money through one of several different instruments. The chore is to find out which one loan is right for your situation.
Need A Lower Payment? Check out our Interest Only Mortgages
Get lower monthly payment for your purchase or refinancing!
Interest Only Mortgage Term Options
- 1 Year Fixed Rate- Interest Only
- 2/28 Fixed Rate- Interest Only
- Jumbo Interest Only Mortgage
- 3/27 Fixed Rate- Interest Only
- 5/1 Fixed Rate- Interest Only
- 7/1 Fixed Rate- Interest Only
- 10/1 Fixed Rate- Interest Only
- 30 Fixed Rate- Interest Only
Mortgage Rate Statistics
- The avg. contract interest rate for 30-year fixed-rate mortgages decreased to 6.18% from 6.22%
- The avg. contract mortgage interest rate for 15-year fixed-rate mortgages decreased to 5.84% from 5.87%.
- The avg. contract mortgage interest rate for 15-year fixed-rate second mortgages increased to 8.125% to 8.375%.
- The avg. contract interest rate for 1-year ARMs increased to 5.64% from 5.60%.
For more information, please visit mbaa.org
Surveys recently found that almost 43% of first time homebuyers obtain their mortgage using 100% mortgage financing.
According to the National Association of Realtors 43 percent of first-time home buyers obtained no money down mortgages last year and that the average first-time home buyer made only a 2 percent down payment on a $150,000 property.
Typically there were 2 loans totaling 100% 80% first mortgage and a 20% second mortgage.