If you’re looking for a type of loan that enables you to get a lower monthly payment, then an interest-only loan might be right for you. However, there can be serious disadvantages to weigh with the advantages of this type of loan. To know it is right for you, please read more information below or get in contact with one of our loan agents.
Interest-only loans are a type of loan that allows you, for a set period of time, to pay only the interest costs of your loan, without any of your payment going towards the principal balance. Generally, these periods of interest-only repayment last about 5-10 years, upon which the monthly payment increases to pay off the principal. This enables borrowers to pay a lower monthly payment for a period of time.
These types of loans have gotten significantly harder to receive since the recession, due to the high risk for both the borrower and lender. These types of loans typically aren’t eligible to be given out through government-sponsored programs (such as Freddie Mac and Fannie Mae). Many interest-only loans are given in conjunction with a jumbo loan.
If you are curious if you qualify for an interest-only loan, or want to know if it is even a good option for you, then don’t hesitate to talk to one of our loan agents today! Our team is qualified to inform you and help you get the mortgage that is right for you and your situation.