QandAs: Loans

What are the benefits of an Interest Only Mortgage Loan?

Answer:
While interest only mortgages are not the best

option for everyone, there are certain situations in which these types of home loans can be beneficial. Some investors choose opt for interest only home loans so their cash is freed up to utilize for investment purposes.

In other situations, individuals who have reasonable reason to believe they will bring in a significant amount of money within a short period of time often opt for an interest only loan. These individuals typically accept an interest only loan with the intention of making additional payments toward the principal balance when their finances are in order.

Additionally, those with widely fluctuating incomes, such as commission only sales people or those who receive most of their income from periodic bonuses, can often benefit from interest only home loans. Individuals in this situation can keep their mandatory payments low with an interest only home loan, yet choose to make progress toward paying down their principal balances when their incomes are at their highest.


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