Greater Purchasing Power
many interest-only home loan programs you can benefit from
lower qualifying payments enabling you to enjoy greater
purchasing power than with traditional mortgages.
Most lenders do not impose
restrictions or penalties should you wish to start paying down the
principle loan balance at times convenient to you.
Even if your loan has a prepayment penalty many lenders will
still even let you pay up to 20% of your loan balance during any
12 month period without triggering the prepayment clause.
Reduced Qualifying Income
Much like the "greater purchasing
power" advantage this feature will allow many home buyers to
qualify for a bigger home without having to prove a "bigger
salary". Most lenders state that if your initial interest
rate is fixed for a period of three (3) or more years than the
borrower can qualify on the "interest only" payment.
Fixed or Adjustable Rates
Interest Only loans come in a variety of fixed and adjustable rate
Unlimited Cash Out *
Fixed rates often
have strict limitations on how much a homeowner can "cash out"
when refinancing a home. We have seen cases where the
homeowner wanted $300,000 and banks tried to charge a higher rate
since a fixed rate would only allow $150,000 of cash to the
borrower. Interest Only loans were created for the wealthy
many years ago and this was one benefit worth waiting for.
Although the unlimited cash out feature is limited to certain
lenders and eligibility requirements there is a program available
without incurring a penalty for those of you looking to take large
sums of equity from your home.