The other con that you're missing is that for those first however many years you're not paying on your principal. Obvious, I know. But, it bears repeating. You're not paying on your principal. In other words, unless the market continues to increase, you are not building equity in your house. You are essentially renting. And, generally speaking, unless you have a honking large downpayment, you're paying PMI, too.
That being said, you may be confident that the market value will increase, thereby getting "free" equity. Personally, I think we may be nearing the top of the curve on house prices. One estimate that I recently heard was that housing prices are currently 10% overvalued - not the time you want to be going with this kind of loan. On Fri, 21 Jan 2005 09:36:26 -0500, Tangorre, Michael <[EMAIL PROTECTED]> wrote: > Has anyone gone down the road of interest only loans for a mortgage? > You make interest only payments for the first 5, 10, or 15 years then > regular mortgage payments with interest after that initial period is up. > > Pros: > The entire interest initial payments are tax deductible. > You can take the principal portion of the loan you are not paying and > invest it. > Great for people not planning to make the home their final residence. > > Cons: > Need to be a disciplined saver/invester. > Monthly payments increase dramatically after initial period. > ? > ? > ? > > Looking for anyone who might have experience with this type of loan. > > Thanks! > > Mike > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Discover CFTicket - The leading ColdFusion Help Desk and Trouble Ticket application http://www.houseoffusion.com/banners/view.cfm?bannerid=48 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:143724 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
