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Mortgage Payment types
Interest-only or option-ARM minimum payments may be risky if you won’t be able to afford the higher monthly payments in the future. For example, suppose you are in the market for a home and can afford a monthly payment of about $1,100. Depending on the interest rate, with a traditional 30-year, fixed-rate mortgage, you might expect to get a $180,000 mortgage. A lender or broker could offer you an I-O mortgage payment of $1,100 monthly that might enable you to get a $215,000 mortgage—and, therefore, a more expensive house. But keep in mind that your payments could go up because of interest rate increases when the I-O period ends, or when the loan is recalculated. Your $1,100 monthly payment could jump to $1,340 or more. If you cannot reasonably expect to make this larger payment when the time comes, you might want to think about a different type of loan.
Read below more on Mortgages
What to watch out for with Adjustable Rate Mortgages
Is Interest Only Mortage Payment right for you
Questions to Ask when Shopping for Mortgage
Check out Alternatives to Mortgage Payment types
This is a blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies. Mortgage payment Types that may not be Right for you is brought to you by SimplifyEm Pay Rent Online and Property Management SoftwareYou might also want to read:
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- Questions to Ask when Shopping for Mortgage An Interest Only mortgage payment or a payment option Adjustable Rate Mortgage? * Both types of loans can be flexible and allow you to make lower monthly payments during the......
