Should I Consider an Interest Only Home Loan?By Kelly Richardson
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As the real estate market begins a period of recession, mortgage lenders are creating new lending products that will entice borrowers. The interest only home loan is a unique financial arrangement that may hold a variety of key benefits for you. Knowing the good and the bad will help you to decide.
Ideal Interest Only Situations
The Interest Only Mortgage SummaryFor the first 10 years of most interest only loans, you can pay the interest on the principle and then increase your payment as time progresses. There is no penalty for paying more of the principle.
One of the best parts of an interest only loan is that many times you can borrow up to 25% more than you would should you go for a fixed or adjustable-rate home loan. You can also qualify for tax-deductible benefits, as well.
Be sure to discuss the interest only mortgage option with your lender. They will be able to provide you with specific financial information on the types of programs that have available for you.
About the Author
Kelly Richardson covers the real estate scene in major cities across the country. His articles appear in educational journals, periodicals, and e-zines.
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