Phoenix Interest Only Loans

An interest only mortgage is designed to offer the lowest payment possible as you are not paying anything toward the principal in your normal monthly payment. An interest only loan means that you can buy more home than with a fully amortizing mortgage.

Interest Only Loans

Interest Only Loans were originally designed for individuals whose income is cyclical. We also see individuals in many situations choosing this option as a method of significantly lowering their payment. This program gives better monthly cash flow.

Generally, interest only mortgages are available for a 30 year term with the first 3 or 5 or 7 or 10 years interest only, and the final 20 to 27 years then would be fully amortized. Some lenders who offer an interest only mortgage require a prepayment penalty for the first 1-3 years and have caps on the amount your rate can change at any time over the life of the loan. Another feature of interest only mortgages is that if you choose to make a principle payment during the interest only period, your balance is reduced the following month lowering your payment further.

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