| ages are very popular and there are scores of | | | | currently, are not earning enough so as to be able to |
| mortgage loan options available today. Of the various | | | | make the monthly mortgage payments in full but are |
| types of mortgage loans available in the market, | | | | expecting to earn more in future. So, by going for an |
| interest only mortgage is one good option (for a | | | | interest only mortgage, they are reducing the amount |
| number of people). | | | | they need to pay till their pay is higher. Once the |
| Interest only mortgage, as is clear by its name, is a | | | | interest only mortgage period is over, they can start |
| mortgage loan where you pay only the interest | | | | paying both the components i.e. interest, as well as, |
| component for the first few years. So, interest only | | | | principal. However, interest only mortgage is not meant |
| mortgage helps you in reducing your monthly | | | | for (or used by) just these people. Interest only |
| mortgage payments for some initial period. However, | | | | mortgage is also a popular option among people who |
| interest only mortgage recovers these temporary | | | | know of other avenues for investing money (i.e. the |
| reductions by hiking up your monthly mortgage | | | | money saved by using interest only mortgage for the |
| payments for the period after that (i.e. after the initial | | | | first few years) where they can get better returns |
| interest only mortgage period is over). | | | | (better than what why would have got if they had |
| So why would anyone go for an interest only | | | | invested this money in paying back their mortgage loan |
| mortgage? | | | | i.e. by going for the normal mortgage instead of |
| As we know, interest only mortgage helps us in | | | | interest only mortgage). However, you should not go |
| reducing our monthly mortgage payments for the first | | | | for an interest only mortgage if you are not absolutely |
| few years. This means, through interest only mortgage, | | | | sure of getting better returns than what you would |
| you are reducing your total monthly mortgage outgo | | | | have got if you didn’t go for interest only |
| (even though this is recovered by mortgage lender | | | | mortgage. |
| later on). Effectively, you are paying a lower interest | | | | So, interest only mortgage is an option that is good not |
| rate (lower that what you would have got for a | | | | only for people who have a lower payback capacity |
| mortgage that was not an interest only mortgage) in | | | | for initial years, but also for people who know of ways |
| the first few years and a higher rate in the later years. | | | | of getting better returns from the money saved |
| This works out very well for a lot of people who, | | | | (temporarily) through interest only mortgage. |