Interest Only Calculator
Is An Interest Only Mortgage Right For You?
Interest Only Mortgages are very controversial. Truth be known the name is misleading because the interest on payment is set for a pre-determined period of time. After the interest only term is over the loan converts so something more traditional mortgage loan.
Interest Only Calculator
On a 30 year fixed rate mortgage approximately 95% of your mortgage payment (in the beginning) goes toward the interest. As an example let’s take a $300,000 mortgage at 4.25%. The total payment on a 30 year fixed loan will be $1,475.82. Of that amount $1,062.50 will go towards interest and $413.32 towards principal.
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Having an interest only mortgage can be very attractive but it does have disadvantages. The name is a bit misleading because it’s an interest only mortgage for a set period of time. They are traditionally interest only for the first 1 to 10 years only. At the end of the initial interest only period it will convert to a fully amortized loan for the remaining term. You have the option of choosing a fully amortized ARM of Fixed Rate Mortgage.
We offer the interest only mortgage as a Fixed or ARM. Because you’re only paying interest in the beginning, that payment will be considerable less than a loan witch starts as a fully amortized fixed rate. This lower payment is the major attraction of the interest only mortgage.
Interest only Calculator
When an interest only mortgage is applied to a Jumbo loan the differences can be significant. For instance on a $1,000,000 loan at 4.25% the principal and interest payment will be $4,919.40. Of that $3,541.67 will go towards interest and $1,377.73 will be applied towards the interest. In a situation like this some people consider this savings as a way to build personal assets.
Since they hit the marketplace the interest only mortgage has been a hit with investors. With the various options being offered the interest only mortgage can be a valuable tool for nearly any borrower.
Interest Only Mortgage Payment Calculator
Keep in mind even though the initial low payment can be attractive, the interest only period is not for the life of the loan, only for a fixed period. In reality they are temporary interest only mortgages and eventually will convert to a fully amortized fixed rate or adjustable loans.
After using our Interest Only Calculator Call us at 424 225 2167 for help. One of our mortgage professionals will help you get best the best possible loan solution for your situation. We’ll be with you every step of the process and not hand you off to someone else.