Interest Only Mortgages: 10 Things You Need To Know
It is said that “anything that seems too good to be real is really not real” but that is only when you are misinformed and do not plan fast.
Things you need to know
There are 10 things I think that you need know before embarking on an interest only mortgage.
- Do not embark on an interest only mortgage plan when you can actually clear the loan using other mortgage methods.
- Have a really good plan that can stabilize you with enough money to clear the loan at the end of the interest payment.
- There is really nothing much you stand to gain on an interest only mortgage plan not even your equity when the interest rate rises.
- One of the advantages of the mortgagor acquired the property on behalf of a young person who is still a minor and cannot claim his acceptance at that time which is usually a large fortune.
- Another advantage is that the mortgagor could have a steady source of income but may be low on funds at a particular time.
- You also cannot help but now understand why people say that Interest only mortgage is only for the wealthy.
- Picking a variable mortgage rate makes it worse especially if the mortgagor is not buoyant. If the rate increases, the interest rises and he may pay more than he bargained for plus the capital.
- Interest only could help to take care of other urgent needs since the first few years are paid in interest only.
- Investors know everything involved but then, they profit more from this method over a short period of time usually a maximum of ten years
- There are certain conditions such as the income level per year, so you may not be able to get one that easily.
All these aforementioned may come in handy if you need any necessary information as regards interest only and its strength and weaknesses (check www.newcityfinancial.com for more info.