Types of Interest Only Mortgage Programs |
Interest Only Home Mortgages come in many
different forms. Be sure you understand the differences.
The most important fact about an interest only mortgage loan is that only
interest is paid during the initial period and none of the
capital debt (principal amount) is paid down unless you pay
more then the minimum payment due. This is why the initial monthly
mortgage payments are so much lower. At the end of the Interest
Only period, the mortgage loan typically carries variable interest rates
and the loan is amortized to include the principal payments
and interest.
Interest Only Mortgage Loan Programs
-
30 YEAR FIXED with INTEREST ONLY OPTION
This program is available as a 10-year interest only option
or a 15-year interest only option. The loan is recasted based
on the remaining loan term or may be at a fixed rate for the
remaining loan term. Interest Only Mortgage Rates may be adjustable on the interest
only term of the loan payments.
-
ADJUSTABLE RATE MORTGAGE (ARM) with INTEREST ONLY
OPTION
Our adjustable-rate mortgages with interest-only options are
also available as 3-year, 5-year, 7-year, or 10-year loans
for home purchase or refinance. Borrowers can choose an ARM
based on the LIBOR index (London InterBank Offered Rate),
MTA index, COFI index, CMT index or the PRIME rate. Interest Only Home Mortgages
can have interest rates adjust every month, every six months,
or yearly. The amount of rate change is usually capped at
any one rate change and over the life of the loan.
Interest Only with Fixed Period Arm (Hybrid
ARM)
The hybrid ARM has a fixed period for either 3-year, 5-year,
7-year, or 10 year option. Interest and principal due after
interest-only term are based on adjustable interest rates
with a lifetime cap at usually 5%. Interest rates for this
type of interest only loan program are usually based on
the LIBOR index.
As you can see, an Interest Only Mortgage Loan can come
in a variety of packages and forms. Some are tied to LIBOR and
others are tied to PRIME. Some have rates adjustable monthly,
every six months and other have a fixed rate period of interest
only payments that can go from 3 to 10 years and then become
adjustable.
A mortgage advisor can provide explanations of any program
before you apply. It's also wise to complete a detailed comparison
of mortgages products so that you make the right choice according
to your goals and circumstances. We provide free total cost
comparisons. Our mortgage officers are here to help you sort
out the options and features best suited for your needs.
CALL US WITH YOUR QUESTIONS or APPLY
NOW! Toll Free: 1-877-939-5400
|
| |
|
|
| |
|
| |
|
|
|
