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  • Casual Articles - Things To Know About Sub-Prime Interest Only Mortgages

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    n when you are required to make much higher monthly payments than you are accustomed to. At that time you’ll be making monthly payments against your higher interest rates along with the amount of your loan. If you aren’t ear
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    Interest-only mortgages are mortgages that for the first year or for the first few years of your loan, you’ll pay only interest on the loan and you will not be making payments against the principle balance. These types of loans can be risky. Here is some information to help you determine whether a sub-prime interest only mortgage loan is right for your situation.

    Why Some Borrowers Do This
    On the surface sub-prime interest-only mortgages appear to be a good deal. It allows you to buy a larger house and obtain a larger loan. Your initial interest rates are fixed, and you only pay interest for the first one, three, or five years.

    Interest Rates Increase
    You get hit after this initial interest-only period ends, however. That’s when your interest rates become variable and often increase, and your mortgage becomes a traditional loan. The problem comes in when you are required to make much higher monthly payments than you are accustomed to. At that time you’ll be making monthly payments against your higher interest rates along with the amount of your loan. If you aren’t earn

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    oans can be risky. Here is some information to help you determine whether a sub-prime interest only mortgage loan is right for your situation.

    Why Some Borrowers Do This
    On the surface sub-prime interest-only mortgages appear to be a good deal. It allows you to buy a larger house and obtain a larger loan. Your initial interest rates are fixed, and you only pay interest for the first one, three, or five years.

    Interest Rates Increase
    You get hit after this initial interest-only period ends, however. That’s when your interest rates become variable and often increase, and your mortgage becomes a traditional loan. The problem comes in when you are required to make much higher monthly payments than you are accustomed to. At that time you’ll be making monthly payments against your higher interest rates along with the amount of your loan. If you aren’t ear

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    You always follow through with all the wealth strategies you learn and like, right? If you said no, you're not alone. I don't and most of my clients don't either. Actually, it's probably not a good idea if
    ly mortgages appear to be a good deal. It allows you to buy a larger house and obtain a larger loan. Your initial interest rates are fixed, and you only pay interest for the first one, three, or five years.

    Interest Rates Increase
    You get hit after this initial interest-only period ends, however. That’s when your interest rates become variable and often increase, and your mortgage becomes a traditional loan. The problem comes in when you are required to make much higher monthly payments than you are accustomed to. At that time you’ll be making monthly payments against your higher interest rates along with the amount of your loan. If you aren’t ear

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    Rates Increase
    You get hit after this initial interest-only period ends, however. That’s when your interest rates become variable and often increase, and your mortgage becomes a traditional loan. The problem comes in when you are required to make much higher monthly payments than you are accustomed to. At that time you’ll be making monthly payments against your higher interest rates along with the amount of your loan. If you aren’t ear
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    n when you are required to make much higher monthly payments than you are accustomed to. At that time you’ll be making monthly payments against your higher interest rates along with the amount of your loan. If you aren’t earning more money each month by the time your loan changes, you may struggle to make your loan payments on time.

    Dangers
    Sub-prime interest-only mortgages are dangerous. Typically they are offered in the lower-income communities to prospective homeowners who truly cannot afford the home that they are purchasing with this type of mortgage. If you are looking into borrowing with a sub-prime interest-only mortgage, seek the opinions of several different realty professionals before you make your final decision.

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