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Take Advantage of Interest Only

Are you a seasoned investor looking to make money in stocks or savings? How about an entrepreneur who is anticipating a large return from your business? Do you work in sales or other commission only professions? If so, when purchasing a home, an Interest Only mortgage could be an option for you.

A monthly mortgage payment is typically divided two ways- principle and interest. With the Interest Only option, the entire mortgage payment goes toward the interest; none of it pays principle. Business owners, investors or professionals who get paid with bonuses or commissions typically reap the benefits of this loan type.

Investors tend to use the money that would have gone toward principle to invest in other areas. Interest only is also attractive to the investor who plans to sit on a property for a short period of time and then flip it. Business owners who expect to make a lot of money in the future choose to invest in the business instead of investing in the home. Professionals whose incomes are paid to them by commission may choose Interest Only loans and pay on the principle in lump sums.

Interest only rates are typically the same or higher than standard mortgage rates. By checking online mortgage rate tables, consumers can quickly compare the available rates offered by lenders in their area and find Interest Only ARM rates that may be much lower than those offered elsewhere.

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