|
Whats the Best Strategy for Finding an Interest Only Mortgage Loan
Author David Schneider | May 23,2007
|
If you're looking for a mortgage loan, you may be aware of an "interest only" option. This is an option that allows you to start out by paying back only the interest on your loan, not the principal balance. In this way, you can give yourself a lower monthly mortgage payment for the same size loan as you would get from a traditional mortgage with a higher payment. So what is your best strategy for getting an interest only mortgage loan?
Compare Interest Only and Traditional Mortgage Loan Rates and Payments
The first thing you need to do is find out how much lower your interest only loan payment can be compared to your traditional loan payment. If you can find a traditional loan where the payment is only a few dollars a month more than the interest only loan you were considering, it makes better financial sense to take the traditional loan, since the faster you pay down the principal, the less costly it is in the long run. Similarly, if you find a great interest only rate, you may want to consider borrowing a larger sum, since you may be better equipped to make the payment at the special rate. Plan ahead and make sure you will eventually be able to pay back the larger sum though, or there could be headaches down the road.
Know the Specifics of Your Interest Only Loan
Interest only loans are not interest only for the life of the loan, or the lender would never get paid back. The interest only loan may shift to a loan that includes the principal after five, ten, or fifteen years. Make sure to find the interest only loan that meets your needs with respect to the interest only term.
Compare Interest Only Options
Most interest only loans have an adjustable rate, but some are fixed, and some may change depending on what point you are in the loan (e.g. perhaps your loan is interest only for ten years and calculated with an adjustable rate, but once the interest only period expires you pay interest and principal at a fixed rate). Compare the rate options for various interest only mortgage loans and calculate which ones are right for you before approaching lenders.
A great tool to do any comparing of mortgage loan interest rates, be they interest only, adjustable rate, fixed rate, commercial or residential, is quotematch.com. When you fill out a simple form on quotematch.com indicating the type and purpose of the property you wish to buy, you will very quickly find yourself matched up with a variety of lenders to meet your needs. This process is totally free and brings with it no obligation to you, so it's a perfect way to begin your hunt for an interest only mortgage loan. |
|
|
Print
E-mail
Del.icio.us
Digg
