Why would I get a 5 Year Interest Only Loan
This loan offers low predictable monthly bills for the first ten years of your loan, but offers you the opportunity to take advantage of interest rate fluctuations in the latter half of the term. Many people like this type of loan because it keeps your month payments low for the first 5 years. The only draw back is that you don’t pay down any of the principal of the loan.
What can I use a 5 Year Interest Only Loan for, and what are my options
With a 5 Year Interest Loan you can buy a primary residence, secondary residence, or investment property. If you like the features of 5 Year Interest Only Loan, but would like to alter the time periods in your loan, you may be interested in the 15/30 Interest Only, 10/30 Interest Only, 10 Year Interest Only, 7 Year Interest Only, 3 Year Interest Only, or 6 Month Interest Only Loans.
Why should I get a 5 Year Interest Only Loan
You will pay a fixed rate for the first five years of your 5 Year Interest Only Loan, which can prove beneficial if you lock in at a good rate. You only pay on the interest portion of your mortgage during that time frame which makes your payments quite low. During the second portion of your 5 Year Interest Only Loan, you will pay on both the principal and interest. Many 5 Year Interest Only Loans switch to adjustable rates, usually indexed by LIBOR, at this point. Your payments will increase during the latter half of your plan, so it is important to be financially prepared to avoid default and foreclosure.
How can I get a 5 Year Interest Only Loan
You can get a 5 Year Interest Only Loan by clicking here to fill out an application.
How can my FICO/ Credit Score effect my mortgage rate
Your FICO/Credit Score is important in determining your mortgage rates, so it’s important to know where you stand in terms of credit. Here are some differences in good credit and bad 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.
- You are over eighteen years old and have no credit history.
- You have had been reported to a collection agency within the last ten years.
Q: When will I start to build equity if I choose the 5 Year Interest Only Loan?
A: You will start to build equity when you start paying on the principal. Many lenders allow borrowers to make voluntary prepayments on their principal during their 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.