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Mortgage Options
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 first few years of the loan. You can repay some of the principal at any time to help keep future payments lower.
* Neither loan may be the right choice if the attraction of an initial smaller monthly payment leads you to take out a larger mortgage than you will be able to afford when the interest-only period ends or when the option payments are recalculated.
* Eventually you will have to pay back the principal you borrowed, plus any amounts added to the principal as negative amortization.
* You will have lower monthly payments only during the first few years. You will have larger payments later—and you will need to have the income to cover those larger payments.
Also, note that
* with an adjustable-rate mortgage, interest-only and option-ARM monthly payments can increase, even during the I-O-payment or option period.
* by making I-O or minimum payments, you will not be building equity in your home by paying down the principal on the loan, even though you are making monthly payments. The equity in your home may increase if the market value of your home increases, but the equity could also go down if the market value of your home goes down.
* with payment-option ARMs, you may be adding to the amount you owe on your mortgage if you pay less than the full interest owed each month.
Read below more on Interest Only mortgage and Adjustable Rate Mortgage
What is Adjustable Rate Mortgage
What are different types of Adjustable Rate Mortgages
Tips on Getting Information on Adjustable Rate Mortgages
What to watch out for with Adjustable Rate Mortgages
What is Interest Only Mortgage Payment
Is Interest Only Mortage Payment right for you
What is Payment Option Adjustable Rate Mortgage
This is a blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies. Questions to Ask when Shopping for Mortgage is brought to you by SimplifyEm Pay Rent Online and Property Management SoftwareYou might also want to read:
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