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Have you ever heard of this type of mortgage?
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bikramaddict
mommy-to-be
Member since 8/06 4376 total posts
Name:
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Have you ever heard of this type of mortgage?
My FIL - who although intelligent in general doesn't know much about the home buying process, mentioned a 30 year interest-only mortgage. meaning you pay the interest only for the full 30 years...that didn't make sense to me. 
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Posted 5/18/07 8:45 AM  |
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SweetTooth
I'm a tired mommy!
Member since 12/05 20105 total posts
Name:
Lauren
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Re: Have you ever heard of this type of mortgage?
no that doesn't make sense at all. at some point you have to start paying back principal. If there is such a thing, I would stay far away from it.
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| Posted 5/18/07 8:47 AM |
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bikramaddict
mommy-to-be
Member since 8/06 4376 total posts
Name:
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Re: Have you ever heard of this type of mortgage?
Posted by SweetTooth
no that doesn't make sense at all. at some point you have to start paying back principal. If there is such a thing, I would stay far away from it.
no, no...i have a fixed rate and i'm happy with it! FIL has a tendancy to make things up...i was wondering if this is an example of that.
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| Posted 5/18/07 8:54 AM |
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cjik
Welcome 2010!
Member since 2/06 8879 total posts
Name:
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Re: Have you ever heard of this type of mortgage?
You don't pay interest only forever. You pay the interest only for a set period of time (usually 10 years), then your payments begin to combine interest and principal.
If you make additional payments to the principal during those 10 years on a regular basis, you may be okay, but I've heard if you pay nothing but interest, you will have whopping payments when the principal kicks in.
This can still be good for some people, but it depends upon your finances, how you get paid, how long you plan to stay in the house.
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| Posted 5/18/07 9:31 AM |
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MOM2NICO
LIF Adolescent
Member since 1/07 829 total posts
Name:
LISA
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Re: Have you ever heard of this type of mortgage?
This type of mortgage is good if you are flipping a house or do not plan to stay there for very long. Ex. 5 years or less. This way you never start paying back the principal.
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| Posted 5/18/07 9:34 AM |
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