| Posted By |
Message |
sunnygirl
loving life
Member since 1/07 5413 total posts
Name:
D
|
interest only mortgage
can someone tell me the pros or cons of these types of loans or any experience
i read that an interest only has to be adjustable rate which i don't want, is this true
my bil is convinced that this is the way to go because thats what he has but i don't want an ARM they got into a lot of trouble and almost lost their house when the rate went up and i refuse to have that headache
thank you
|
Posted 8/24/11 1:33 PM  |
| |
|
Prudential Douglas Elliman Real Estate
Long Island's Largest Bridal Resource | Long Island Weddings |
bicosi
life is a carousel
Member since 7/07 14956 total posts
Name:
M
|
Re: interest only mortgage
Personally, years ago, I'd tell you to only do an interest only if you were a flipper but now, I would advise against it completely.. everything is too shaky right now to even predict what'll happen..
as for an ARM, I had one with my first house and it was a blessing.. I was able to refi and lock in on a fantastic rate after the first year.
|
| Posted 8/24/11 2:03 PM |
| |
|
katiebell
Hoping, wishing, waiting....
Member since 8/06 1418 total posts
Name:
K
|
Re: interest only mortgage
We have a 10 year interest only, so right now were are only paying interest. Once the 10 years is up, we will have to pay ineterst AND the principal. So our mortgage payments will go up in 10 years but our rate stays the same.
|
| Posted 8/24/11 5:51 PM |
| |
|
Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
|
Re: interest only mortgage
If you are commission based it does make sense. Than you can make extra payments on your higher commission months.
I wouldn't do an ARM now - rates are holding steady or going up.
|
| Posted 8/24/11 8:27 PM |
| |
|
sunnygirl
loving life
Member since 1/07 5413 total posts
Name:
D
|
Re: interest only mortgage
thank you ladies,
|
| Posted 8/24/11 8:44 PM |
| |
|
greenfreak
.
Member since 9/06 11483 total posts
Name:
greenfreak
|
Re: interest only mortgage
Posted by sunnygirl
can someone tell me the pros or cons of these types of loans or any experience
i read that an interest only has to be adjustable rate which i don't want, is this true
I'm not sure if that's true now, but it wasn't when we signed our IO mortgage papers 4 years ago.
If you had to depend on the 10 years of interest only, I'd be concerned about how to change up at the 11th year. We chose this product since we are first time homeowners and were worried about what would happen if 1 or both of us lost our jobs. And it happened - DH lost his job. It really helped to have the wiggle room in the payment.
Otherwise, we pay interest + principal every month, as if it was past year 11. We strictly only pay less when there's some unexpected complication. It's only happened twice in 4 years, so we're ok.
Under the right conditions, I don't think it's always a bad idea. But you have to be smart and plan ahead so it's not a shock when it changes. 
|
| Posted 8/24/11 9:12 PM |
| |
|
sunnygirl
loving life
Member since 1/07 5413 total posts
Name:
D
|
Re: interest only mortgage
the only reason we would consider this is if its a fixed rate and because i am going to be working part time for the next 2-3 years while my children are young and would be going back full time after that so our income would increase in a few years to cover the jump in the mortgage payment
|
| Posted 8/24/11 9:28 PM |
| |
|
