Interest Only Mortgage

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Interest Only Mortgage

An interest only mortgage allows the borrower to buy more home. Usually within the first 5 to 10 years, the borrower pays only the interest on their mortgage each month. The monthly payment tends to be low at the beginning. Once the initial interest only period expires, the monthly payments will include paying down the principal. With an interest only mortgage, the principal is amortized over the remaining period of the loan term. The ideal situation for this type of mortgage loan is the borrower’s earnings are expected to rise substantially within the near future.


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