QandAs: Loans

What is a 5 Year Interest Only Loan?

Answer:
Borrowers who obtain a 5-year interest only loan enjoy

a fixed rate for the initial five years, and the flexibility to make interest only payments. Traditional mortgage loans include repayment of interest and principal.

Unfortunately, some borrowers are unable to meet this expense, and they need a mortgage loan that offers lower payments. A 5-year interest only loan isn’t for everyone. Borrowers who choose this option will pay a higher amount in the future. Thus, they must plan accordingly. With an interest only loan, the original balance stays the same for the first five years. Hence, it can take several years to gain equity.


	more Q&A sessions like this
	What is a 30-Year Interest Only Loan? What is a 6 Month Interest Only Mortgage? What is a 7 Year Interest Only Home Loan? What is a 7/1 ARM Interest Only? What is a 30/10 Year Interest Only Home Loan? What is a 5/1 Arm Interest Only? What is a 3 Year Interest Only Loan? What is a 7/1 Jumbo ARM? What are the cons of an Interest Only mortgage loan? What is 3/1 Jumbo ARM? What is Loan Servicing Fraud? What is Foreclosure Fraud?