We now offer an Interest Only loan, a low and flexible payment option. Unlike a traditional mortgage where a borrower’s monthly payment goes towards the principal and interest, the monthly payment on this loan goes all towards interest for a fixed term, which is why it’s significantly lower. While this may sound like an attractive choice, not every borrower is a good candidate for this loan. Here are a few things you should know if you’re considering an interest only loan.
- They are usually geared towards borrowers who can afford a 30-year fixed mortgage payment, but would rather have the lower interest only payment to invest the difference elsewhere.
- During the interest only period, the whole amount of the monthly payment qualifies as tax deductible.
- Is more ideal for home buyers who do not intend to remain in the home for very long.
- Good choice for a fixer upper or an investment property.
- Works well for a borrower who doesn’t make a steady salary, instead relies on commission or bonuses.
- Deferred principal for the interest only loan we offer is only 10 years.
Guidelines and online application for the Interest Only Loan.