There exists a great variety of mortgages customers are eligible for. Many people are lost in the names of different types of mortgages and can’t even understand what this or that type of mortgage means what it is aimed at. Let’s try to clarify what an interest only mortgage is.
So in case one takes an interest only mortgage there is the requirement to pay only the interest in a form of the monthly payment. It will be paid during a certain period of time. The term of such mortgage is usually calculated for 5 to 7 years. At the end of the term when the interests are repaid there exist three variants of repayment. A customer can pay the whole sum of the mortgage in one payment. This situation is very beneficial for a customer as during the previous years a client could use the sum of mortgage for his or her needs and pay only not the essential sum of interests. Secondly, there is the possibility to refinance the mortgage which is a great way to save a big amount of money reducing the interests on the mortgage. The third possibility to cope with this type of mortgage is paying off the main balance, however at the same time the sum payable rises.
Interest only mortgage is especially beneficial for those who don’t have a stable income. These are mostly people who work with the remuneration in the form of commission or bonuses. They can get their money during the period when they pay their interests only, and after the term, they can pay the money they have managed to save before. Bank specialists can help you to define the best interests rates paid monthly without any damage to your family budget.
On the other hand, there are categories of people who are not recommended to get the interest only mortgages. These are people with a stable income and their loans are of medium size. If you don’t intend to invest your money from your constant income specialist also don’t recommend to do it.
Check out Interest Only Loan page and let us know if we can help you out.