QandAs: Loans

What is a One Month Interest Only Home Loan?

Answer:
Borrowers who choose an interest only mortgage loan

have schedule monthly payments that consist of interest payments. Thus, repayment of principal doesn’t occur until the interest only period concluded. There are several interest only options available. Common interest only mortgages include the five-year and ten-year loan.

However, borrowers can choose short or temporary interest only loans. For example, a borrower can choose to make monthly payments that include repayment of interest and principal. In addition, their home loan may include a feature that lets them make periodic, or one month interest only payments. One month interest only payments will temporarily lower their monthly mortgage obligation, and can assist homeowners who experience short-term financial hardships.


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