As far as the interest only mortgage rates are concerned, you will be given the benefit of the interest only payment option which is indeed quite great. For a fixed period of time, you will just have to pay the interest on the principal and nothing else. Suppose you have taken the interest only mortgage for around 6 years then you will have to pay the interest for about 6 years.
When the 6 years will be completed then the unpaid balance will be full amortized and you will have to pay accordingly as well. After six years it will turn into a regular long term loan and your installment will be fixed. As far as the interest only mortgage rate is concerned it is a type of adjustable rate mortgage as the rates will be designed by the current and the latest interest rates in the market.
As I have told you already you will just have to make the interest payment for the fixed period of time. However you should fix the interest rate which you will have to pay after the fixed period is over. You should calculate a margin and ask the lender to follow the margin. For example you can say that the margin will be 2.25% more than the current interest rate. Suppose the current interest rate is around 3.25% then you will be paying around 5.50% interest rate unless and until the current index rate changes.
You should also know that by the term interest only mortgage rate you do not really mean that the negative amortization will be done. You should know that there is no chance of the negative amortization. There are many loans that follow the negative amortization. As an example you can take the option arm and cash flow loan amount. These two follows the negative amortization.
As far as this type of loan is concerned, it is certainly the short term loan and you cannot take it for the long term. However, if you want to invest this money in the market then you might think of taking this loan, but it is very risky.
To invest in the properties has always been a safer and better investment strategy for you. However you should know that only the mortgage installment remain fix and that too for a fixed period of time. You can take the interest only mortgage for 3,5,7,9 and 10 years. However, taking these kinds of loans for a longer period of time is never supposed to be good.
If you are looking for California Mortgage loan then visit us and get more information about Interest Only Mortgage Rates here.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment