I've heard of an "interest only loan." How do I get one of those?
Asked by Sean
Answered 2 years ago
While interest only loans have become more scarce in the last few years, they are certainly still available. Qualifying is similar to a standard principal and interest loan, and a number of Lending Tree companies offer them. An interest only loan can be useful tool, provided the borrower understands all facets of the loan. It's a good fit for an investor who wants to make the property cash flow, and may be looking to sell the home before the loan converts to a principal and interest payment. Or, for a borrower who expects his/her income to rise significantly in the coming years and wants to get in the home sooner than later.
Interest only loans are on the rise again in CA. Values are stronger than ever and the need for affordable housing has necessitated revisiting 10/1 ARM JUMBO products.
Answered 2 years ago
Sean, i wouldn't do an interest only loan. Many homeowners were looking to refinance their homes under HARP that had an interest only and the payments would go up. One of the biggest things I've noticed with Interest Only is that the owner cannot afford the payments when it's time to pay towards the principal. One of the reasons for this is because it's hard to pay extra towards the principal before the term amortizes into a 30 year. You really would be better of renting.
Interest only loans no longer exist.
I can assist you with a very low interest rate on a regular mortgage paying both principle and interest, but not interest only.
Please let me know if you would like to look at the options availalbe.
ROB CROSTHWAIT| Loan Consultant (NMLS ID#: 237818)
NORTH AMERICAN SAVINGS BANK, F.S.B. (NMLS ID#: 400039)
P:866.627.2526 F: 816.508.1439
903 E. 104th Street, Suite 400 | Kansas City, MO 64131 | www.nasb.com
Apply like you would any other type of loan with Guaranteed Rate. The guidelines for interest only loans are much more strict than for fully amortizing loans, so it doesn't make qualifying any easier, but the payment may fit in better with your strategy.