I heard about these interest only loans, and frankly I don't understand their advantages. Isn't the equity in your home directly related to the amount of principal you've paid down? So, after 10 years of paying off interest....you own no more of your house than you did when you started. Is that correct???
I was even a little miffed when i learned my standard loan was heavily front-load with interest. Nearly 75% of my first couple of years payments went to interest anyway. That was on a 30 year. When I refi'd to my 15, my principal became more than 50% of each of my payments, which made me happy. Whether you are planning on staying in your house or not, it IS a sound and solid investment while you are there....and if the name of the game is reducing interest payments....i fail to see the value in interest only loans. Am I way off on this??? > 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:5:143725 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
