Why would I want a 10 Year Interest Only Loan?
This loan offers predictable monthly bills for the first ten years of your loan, but it also offers you the opportunity to take advantage of interest rate fluctuations in the latter half of your term.
What can I use a 10 Year Interest Only Loan for, and what are my options
You can use a 10 Year Interest Only Loan to purchase any type of residence. If a 10 Year Interest Only loan isn’t quite your cup of tea, you might consider the 15/30 Interest Only, 10/30 Interest Only, 7 Year Interest Only, 5 Year Interest Only, 3 Year Interest Only, and 6 Month Interest Only Loans.
Why should I get a 10 Year Interest Only Loan
With the 10 Year Interest Only Loan, the first ten years of your mortgage loan are fixed rates, and you will only pay the interest portion of your loan. For the second part of your mortgage, your rate will change yearly, and according to the LIBOR index, plus a margin. The margin will not change throughout the mortgage. The loan will be fully amortized over the remainder of the term, and you will be required to make payments on the principal as well as interest.
How can I get a 10 Year Interest Only Loan
Click here to apply for a 10 Year Interest Only Loan.
How can my FICO/ Credit Score affect my mortgage rate
Credit scores are very important in determining mortgage rates. Here are some characteristics of good credit:
- You have established a credit history with auto loans, mortgages, and/or credit cards.
- None of your payments were more than thirty days late.
- You have not missed a single payment in the last twelve months, but may have missed a few over the past seven years.
Q: Will I be required to make a down payment with a 10 Year Interest Only Loan?
A: Yes, most lenders require a 5%-10% down payment.
Q: How quickly will I build equity if I choose this loan?
A: You will not be able to build equity until the initial ten years of your mortgage are over, and you begin paying on your principal.
One last tidbit…
- Fannie Mae offers an Interest Only program called Interest First. This program works like many 10 Year Interest Only programs. It allows borrowers to repay the second half of their mortgages by fixed rates, or adjustable rates. It also allows borrowers to prepay portions of the principal during the interest only period.
This site is not a broker and does not collect or solicit mortgage applications. Content is for informational or comparison purposes only. Services are not available in New York. Products and services may not be available in all other states.