The Top 10 Reasons To Not Refinance Out Of Your Interest Only Mortgage
1. Interest only mortgages really get a bad rap when it comgees to talk about home loans. Many financial experts talk about how bad they are because you never gain any equity in the home because you are not paying down the balance. They are right in this conclusion because you are not required to pay down the balance during the interest only period of the mortgage.
2. What many financial experts or gurus do not tell you is that you have the choice to pay down the mortgage if you want. The mortgage company is not telling you that you have to for a certain period of time. Typically most interest only home loans are a normal 30 year fixed interest rate mortgage where the first ten years of the loan are an interest only option period and then at year ten it turns into a 20 year principal and interest loan where
Click here to continue readingThe Top Ten Reasons Interest Only Mortgages Make Sense
1. If you look at your monthly mortgage statement you will see that the principle balance on your mortgage probably only dropped a couple dollars while the majority of your payment was interest. As an example on a $150k loan at 6% your monthly payment is about $900. $750 goes to interest and $150 goes towards the principle balance. These numbers slowly start changing where more goes towards the balance and less to the interest but that’s around year 15 when that starts happening.
2. Mortgages are front loaded with interest. This means you pay the interest off first before the balance. It sucks but that’s how the banks get paid.
3. Most normal 30 year fixed loans should be considered interest only loans anyways. As you can see from the example above the majority of your payment is interest.
4. Never take out a interest only adjustable mortgage. You never know if
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