Getting the interest rate for your home mortgage is not as straightforward as you might think. Doing some research ahead of time on interest rates can save you a ton of money on the overall cost of financing your home.
An interest-only loan allows the borrower to pay only the interest portion of the mortgage note for a fixed period (typically 5 to 7 years). After the interest-only term has been completed, the borrower is then required to make a lump sum payment of the note or begin making payments which include principal.
Choosing the best mortgage for your home purchase is a big deal. Although a 30-year conventional mortgage is the most common, there are several other lending products, such as adjustable rate mortgages (ARMs) and jumbo loans. However, interest only mortgages are arguably the most popular alternative mortgage. These loans appeal to first time homebuyers and savvy investors who are looking to gain an edge on the market. Continue reading to learn more about interest only mortgages.