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Here in Florida, a five- or ten-year interest-only period is
typical. At the end of the scheduled time frame, it is common
that the principal balance begins the amortized stage for the
remaining scheduled life of the mortgage loan. In other words,
if a borrower had a thirty-year mortgage loan and the first five
years were interest only–at the end of the first five years–the
principal balance would be amortized over the remaining period
of twenty-five years.
The practical result is, the early payments–in the interest-only period–are much lower than the later payments.
The adjustable rate interest only mortgage loan is even a greater risk to both the consumer and the Lender. Note that lenders generally do not like these types of loans and therefore offer out higher interest rates on these types of loans to discourage consumers for pursuing them.
Interest Only Mortgage Loans Available in Florida
Our Team at High Definition Mortgage Inc. believe an Interest Only Mortgage Loan should only be used for people who intend on only holding the property for a short period of time, generally less than three years.
Most often, these types of loans are best used for someone like a real estate investor or contractor who has a strategic plan to purchase real estate, and only to hold for a short period of time. This can be used to renovate and flip, create an income generating property, or lease property.
We highly recommend the purchaser should have a very good understanding of real estate market trends, market fluctuations, and market risk. A good real estate investor should always have a good exit strategy as part of their business plan. A consumer on a fixed income, who does not have the means or the ability to increase their income on short notice and cannot sustain the higher income or a higher mortgage loan payment for long period of time, should not consider an Interest Only Mortgage Loan
If you have any questions or would like further assistance, please contact us directly and we will try our very best to help wherever possible.
As a Florida mortgage brokerage our services have been designed to remove the stress and misunderstandings commonly associated with a mortgage loan.
For further information about getting the right mortgage for you
and to arrange your ‘NO-FEE ASSESSMENT’
Call us on 941-444-9240