DECEMBER 12TH, 2018

30-Year Interest Only Loan Mortgages

30-Year Interest Only Loan Mortgage Options will be described in detail below. But, as informational copy for the consumer, Interest Only Loans are discussed briefly here. An Interest Only Mortgage is an option that provides one to spend the beginning portion of the payment term (the length is stipulated in the contract), paying the interest on the loan. Next, one could begin to pay off principal, pay the total balance, or refinance. Perfect product if one plans to refinance after a short period. Product is not useful for building equity nor is it a good choice for those with fixed incomes who may not be able to make higher payments after the interest only period.

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The Interest Only Mortgage is furthermore defined as an “interest–only payment option” which is offered on fixed-rate or adjustable-rate mortgages as well as on an Option ARM. This option to allow consumers to pay “interest only” provides that the consumer would only pay the interest portion of their monthly payment for a fixed period. At the end of the fixed period, the loan becomes fully amortized, thus resulting in highly increased monthly payments. Consumers should note that the new payment will be higher than it would have been if it had been fully amortizing from the start. The longer the period of “interest only”, the higher the new payment will be when that period ends.

Interest Only payment plans are for consumers who anticipate earning substantially more in a few years and wish to maximize their purchasing power now or who will invest the difference between an interest only and an amortizing mortgage payments, and who also are quite confident their investments will earn money.

About Interest Only Loan Mortgages 30-Year and Recent News, News History, if applicable

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What Option/Loan Programs are Available for 30-Year Interest Only Loan Mortgages?

• 10/30 Year Interest Only – Provides for a fixed rate for 30 years whereby the first ten years are Interest Only payments. When the initial period has passed (month 121), the unpaid balance is fully amortized over the remainder of the loan term; however, the interest rates does not change. The majority of lenders allow borrowers to make voluntary payments toward principal during the interest only period.

• 15/30 Year Interest Only – Provides for a fixed rate for 30 years whereby the first fifteen years are Interest Only payments. When the initial period has passed (month 181), the unpaid balance is fully amortized over the remainder of the loan term; however, the interest rates does not change. The majority of lenders allow borrowers to make voluntary payments toward principal during the interest only period.

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