| Mortgage finance is one of the most popular options | | | | you can raise enough finances later on during the |
| available for average home buyers. There are a | | | | mortgage period, you may feel the pinch. Thus while |
| variety of mortgage options and each caters to | | | | the interest only mortgage may allow you the option |
| specific requirements of borrowers and their paying | | | | to buy a relatively larger home, you need to be |
| capacity. While borrowers can negotiate the terms | | | | aware of the fact that later on, you may need to |
| and conditions of mortgage to be availed of by | | | | pay a larger amount towards principal repayment |
| them, it is always a good idea to do homework well | | | | during the mortgage period. |
| before initiating steps to negotiate the mortgage loan | | | | Most interest only mortgage lenders offer adjustable |
| with mortgage lenders and mortgage brokers. | | | | rates, which mean that in case of rising interest rate |
| Interest only mortgage is one of the better options | | | | regime, your monthly installment amount may rise |
| available to borrowers who want to make small | | | | considerably or alternatively your repayment period |
| payments during the initial stages of mortgages | | | | may be enhanced depending upon the rise in |
| availed of by them. Here the borrowers have to pay | | | | mortgage rate. Secondly the mortgage option can be |
| only the interest portion on the mortgage. As the | | | | considered a good option only when your income is |
| initial repayments are considerable lower, borrowers | | | | expected to rise during later period of your |
| can manage their finances in an effective manner. | | | | mortgage period, when your principal amount starts |
| The interest only payment period usually lasts for | | | | getting repaid. |
| about 5-10 years; depending upon the option chosen | | | | An interest only mortgage loan can allow you to |
| by you. You can also decide to pay more than only | | | | purchase a much bigger and lavish home on account |
| the interest portion during the initial duration of your | | | | of the low initial payments. However it is always |
| mortgage, if you like. | | | | advisable to set aside a small amount towards the |
| Regular mortgages on the other hand, involve paying | | | | principal repayment as your monthly installment may |
| equated monthly amount where part of principal | | | | shoot up considerably immediately after the interest |
| amount along with interest is paid every month. | | | | only period is over and you may have to face the |
| While the interest mortgage option looks great on | | | | reality of rising monthly payments. |
| the face of it, you need to consider the option | | | | The best option before going for an interest only |
| carefully. This is because though the initial amount | | | | mortgage is to evaluate the financial needs and |
| payable is less, once the interest only period is over, | | | | requirements compared to expected cash inflows in |
| your installment increases tremendously. Thus unless | | | | future. |
| you have planed your finances carefully, whereby | | | | |