Interest Only Loans
I/O or interest only mortgage loans are for anyone looking to make low monthly payments over the first several years of owning or refinancing a property. This allows individuals to secure a house sooner while building up income and cash to make larger payments down the line.
Intro to Interest Only Loans
At Loan Vault, we understand sometimes it helps to pay less now and more later. That is exactly why we love setting up I/O loans when the time calls for that exact need. When it comes to needing cheaper initial payments to purchase your home or property, this may be the perfect solution for you. Contact one of our trusted Loan Officers today to hear about the positives and drawbacks of these loans and if it’s the right decision for you in your purchasing journey. Let us handle the math so you don’t have to.
What is a Interest Only loan?
An I/O loan, or interest only loan, is a loan that allows the borrower to pay interest only for the first couple of years when financing a home or property. This allows for flexibility in the first few years of purchasing a home. After this initial period, the borrower can begin making regular monthly payments, refinance the loan, or pay the remaining balance. These loans are ideal for anyone who wants to free up cash flow early on in purchasing a property, but eventually result in higher payments over a longer period of time. These loans are ideal for buyers who need extra cash flow the first few years and are able to offset the interest accrued over time.
These loans:
- Have lower initial down payments
- Can help reduce monthly payments
- Include initial tax benefits
Is a Interest Only Loan Right For You?
Requirements to keep in mind when considering a Interest Only loan:
- Credit score above 700
- Low debt-to-income ratios
- Typically down payments of 15%