Mortgage Center :: Interest Only Mortgage Programs

  Interest Only Mortgage Programs:

For starters, the name is misleading. There is no such thing as an interest-only mortgage, because eventually you'll have to pay the loan principal as well. What you're really getting is an interest-only payment scheme which can be combined with any type of traditional mortgage.

Interest-only loan programs were typically aimed at well-heeled, savvy-investor-type clients who preferred to utilize what would have been the principal portion of their payment for other, hopefully more productive investments.

Let's say you get an interest-only loan for 10 years in the amount of $500,000. Ten years from now you receive a statement from the bank and it shows that your principle balance is still $500,000! You have been making payments for 10 years and the balance hasn't dropped one cent.

Don't be afraid of interest-only loans though. They can be exactly what you are looking for in certain situations.

If you are unsure of which loan type to choose, check our online loan comparison chart.