What is an interest-only loan? An "interest-only loan" is a loan that allows interest-only payments as an option for an initial period of time. At the end of the interest-only period, the loan payments are recalculated based on the outstanding principal balance at that time. Fannie Mae and Freddie Mac offer interest-only payments on both fixed and adjustable rate mortgages. Interest-only payments are also available in nonconforming loan programs.
Is an interest-only loan a good choice for me? Interest-only loans may be a good choice for:
- Borrowers whose income fluctuates from month to month and who need the added safety of being able to make an interest-only payment in those months in which their income is low.
- Borrowers that expect their income to rise and want to qualify for a larger mortgage now.
- Borrowers that want greater flexibility to budget for move-in costs, appliances, and furniture in the first years of the loan.
- Borrowers who are planning to keep the mortgage for only a short time.
- Borrowers who have investment opportunities that offer a return higher than the interest rate on the loan.
- First-time homebuyers who want to qualify for a home that will suit their needs farther into the future rather than buy a starter home and have to move again in a few years.
To qualify for an interest-only loan, borrowers must satisfy lender guidelines for income, assets, and credit. For more information, contact Allied Home Mortgage.
To apply for an interest-only loan, fill out our short prequalification form, or submit an online application, or call us at 503-356-2241.
Allied Home Mortgage Capital Corporation
111 SE 3rd Ave, Suite C Hillsboro, Oregon 97123 503-356-2241 |
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