Obtain Your Dream House with Interest Loans

2007-06-20 15:49:53

( Financial )



So you want to live in your dream house? Unfortunately, the constantly increasing price of most houses binds you from fulfilling that dream. However, you have the option to apply for interest loans.

With an interest only mortgage loan, you can live in a house located in a plush village paying only the interest of the principal. This kind of mortgage has a flexible interest rate, which means that your monthly payments may vary during the course of the loan. The changes may range from monthly to five years. This kind of mortgage lasts from three to ten years. Likewise, at the expiration of the interest-only period, your monthly payments will soar because there is a need to repay the principal and the interest simultaneously.

The Disadvantages of Interest-Only Mortgage

Ideally, however, interest loans are not feasible if you have a regular income and has the means to settle monthly payments promptly. Interest only financing is only for individuals who have no steady income and is looking for a flexible payment mortgage. Moreover, you will still be forced to settle a certain percentage of the principal amount. Interest loans could result to increasing monthly amortizations.

Furthermore, the value of your house could depreciate before you could even pay off the entire principal. Eventually, the worth of your house may not be of the same value with the cost of your loan.

Alternatives to Interest-Only Mortgage

If you are uncertain whether interest loans are the ideal option for you, consider other alternatives available in the market.

You can try out for a community housing program that has reduced rates and charges especially if you are buying a home for the first time.

Another option that you can take into consideration is a fixed-rate mortgage. You need to make some research in order to find the appropriate deal suitable to your needs and preferences.

Moreover, spend some time to save up on your down payment. As much as possible, try to borrow a minimal amount so that you can easily pay off your mortgage.

Finally, settle for a more affordable home. When you have sufficient equity, purchase a bigger and cozier home.

You need to be cautious with interest loans, because the price of living in your dream house can be something you would rather forget.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.