Interest Only Loans Still Attracting People
Of late, many buyers faced with the rigid rise in home prices turned to interest-only mortgage loans that can offer lower monthly payments during an initial period of just interest payments. Financial experts are however not too happy with this trend because they feel there is a possibility of borrowers having difficulty making the payments for their homes when the interest-only period of the loan ended, particularly when the loans carried an adjustable rate and interest rates were rising. Washingtontimes.com reports:
"People like not having to worry about a rate change for 10 years," Mr. Gill says. "But they need to be aware that there’s quite a comeuppance at the end of 10 years, with an increase in the payment of one and a half or two times. A lot of people will probably want to get out of it at that time by refinancing or selling the home," said Bob Gill, branch manager for First Horizon Home Loans in Centreville.
Read more: Interest-only mortgages remain popular
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