Anyone have information on Interest Only 1st 10 years on a mortgage

Anyone have information on Interest Only 1st 10 years on a 30 year mortgage?? Pros & Cons. I am trying to figure this out! TIA

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

Be careful with this. You will initially get a cheaper payment each month, but your principle balance is not going to go down. For example, if you get a 300,000 mortgage and pay interest only, your payment will be around 1500 per month. At the end of the ten year period, you still owe 300,000 because you haven't touched the principle. Yes, it is cheaper to get into a home, but just be careful. I have a friend who did this to get a home b ut she sends money towards the principle whenever she can. Hope this helps.

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Message edited 4/20/2010 6:46:19 PM.

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

Thanks for the info.

We did the 80/15/5, but we were looking to refinance. I have a fixed rate on the 1st mortgage for the next 3 1/2 years and our HELOC has a variable rate - so needless to say the HELOC is killing us right now at a rate of 9.325%!!!

Thank you for your input, I will definately discuss this with DH.

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

Why would you even consider an interest only loan? I hope its not because "well the payments are cheaper".

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

I was watching suze orman this weekend and she said that this is a horrible mortgage to get. She was very against it.

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

Thank you for the information everyone!!

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

Posted by Bella123

Posted by KaRiSsA

Posted by Bella123

Thanks for the info.

We did the 80/15/5, but we were looking to refinance. I have a fixed rate on the 1st mortgage for the next 3 1/2 years and our HELOC has a variable rate - so needless to say the HELOC is killing us right now at a rate of 9.325%!!!

Thank you for your input, I will definately discuss this with DH.

We refinanced because of this recently! It's better to have 1 payment now that is fixed.

That's what I'm trying to do, refinance to have 1 payment at a fixed rate. But the payment is going to be so high!!

Message edited 11/8/2005 3:10:41 PM.

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

IO mortgages make sense for some people. For example my DH is in sales and some months his commission checks are $10k and others they are not, the point is he has a low base salary so an IO would give us the option to keep our monthly expenses down. You can pay towards the principle at any time.

If you are contemplating an IO because it will help you afford a home you otherwise couldn't I would say NO this is not a good move.

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

Re: Anyone have information on Interest Only 1st 10 years on a mortgage

Thanks again for all the advice. We decided against the IO mortgage, but haven't decided if we will stick with what we already have or figure something else out. Thanks again.