Interest-Only Loans

Blog Post Image
Real Estate

Interest-Only Loans

You may want an i/o if you:

-Are disciplined with money

-Are a risk taker

-Aren’t taking on more than you can handle comfortably

-Expect your income to rise sharply in the next five years

-Have an irregular income (like commissioned sales) so that the lower payment is manageable during lean periods and when the money is coming in can pay down the principal

-Are content to let rising markets build your equity for you

-Are confident that home prices will continue to rise


You don’t if you:

-Have a lot of consumer debt you can’t get a handle on

-Plan on being in your house longer than the interest-only period

-Are undisciplined with finances

-Are borrowing a small amount

-Plan on spending the extra cash on “discretionary” items

-Plan to sell or refinance before the interest-only period ends

-Want to lock in today’s low interest rates