Interest only loans

Good and
bad.

Good – you can finally purchase
a home.

Bad – when rates rise in 1,3,5,7
or 10 years – you very well may not be able to afford your new payments.

Choose wisely, says the Realestatejournal
.

“Gimmick or not, this zero-percent
financing loan, and traditional interest-only loans in general, can be flexible
debt-management tools for homeowners who use them wisely. But if interest rates
continue to rise, as anticipated by the Federal Reserve, consumers may find that
they’re taking on far more risk than they can
stomach.

Generally, these loans best
serve borrowers who can afford the risk of a fluctuating interest rates and who
live in regions where homes are likely to significantly appreciate in value over
the next several years. Interest-only loans are not good for consumers who will
find themselves in a financial pinch should their mortgage payments rise
sharply, or who want to take a conservative approach and pay down their mortgage
debt. Here I’ll walk you through some of the pros and cons of interest-only
loans.”

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