An Interest Only loan is a type of loan where you pay only interest on the money you borrower for a fixed period within the loan term. Once the interest-only period ends, either a new principal and interest payment will be recalculated based on the remaining term, or the loan will balloon and become due at the end of the loan term. Interest-only periods can vary from 5 – 10 years and amortization terms can vary from 30-40 years. While in the interest-only period, you always have the option to pay any portion of the principal balance, so you can manage your interest only loan the way that works best for you.
- Lowest Possible Payment – Interest Only loans provide you with a way to get into the most house for the least possible payment.
- More Money in the Bank – While you pay only interest, you can use these additional savings to pay off any other high-cost debts and save even more money.
- Control Your Money – Take control of the money that you earn instead of putting it into your mortgage.
- Tax Deductible – The interest you pay on a mortgage is a tax deduction which saves you money on your income taxes. Be sure to consult a licensed tax professional for any tax deductions you may be eligible for.
In order to obtain an Interest Only loan, you will either be looking to purchase a home in the near future or refinance a home that you currently own. If you are looking to make a new home purchase, the first step of this process is to get pre-approved. If you are looking to refinance your home, the requirements will differ slightly from a purchase. Speaking to one of our licensed loan officers will give you the education you need to make an informed decision so you can get your current mortgage refinanced.
