Of the many different types of home loans out there, interest only loans are one of the more unusual types. Although they are not much in use any more, you may still run into the option. You should know what they are all about before you even consider one. Allowing You To Afford More Than You Really Can What an interest only loan basically does is allow you to afford more of a home than you actually can afford. This trick is pulled off by allowing you to make monthly payments that are only on the interest portion of the mortgage. What that means is that you are not actually paying down the principal balance of the loan, merely paying the interest. This generally allows you to have a larger mortgage because the payment is smaller due to the fact that you are actually paying only the interest. Any Loan Can Be Interest Only An interest only loan is really not a particular type of loan, but a particular method of making payments on your loan. You can generally attach the interest only option to just about any mortgage, if the lender allows it. When you have an interest only […]
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