Interest Only Loans


  • For Purchase or Refinance

    Save thousands off your monthly payment with an interest only loan—our signature loan program. Imagine a $1,000,000 loan with payments of only $2,396* each month! You may want to consider a mortgage that offers an interest only payment and allows you to qualify for a higher loan amount, while maintaining your monthly liquidity. If you choose, you may pay towards the outstanding principle at any time with no prepayment penalties. Interest-only loans are available with both fixed and adjustable loans of 25 to 30 year terms.


    Features and Benefits*


    • Make interest-only payments and enhance your cash flow

    • Maximize your tax deductibility (consult your tax advisor about your personal situation)

    • Make principal payments when you have cash available to apply towards the equity

    • Have more funds available for investments or other properties

    • No prepayment penalties options, no negative amortization

    • Manage unforeseen expenses

    • Zero down payment options available.

    • Possibly qualify for a larger loan amount or larger home

    • Repay high-interest, non-deductible consumer debt 


    How Interest Only Loans Work ?


  • An interest only loan does not mean you will never pay principal on a home loan. These types of mortgages have an interest-only payment option attached to the note. The mortgage note will state how long your interest only payments will last.  For example, on the most common type of interest only loan, the 5 Year ARM has a  fixed interest rate for the first five (5) years of the loan term and your only obligation are interest-only payments during this term. During the beginning of the 6th year (month 61) the unpaid balance is fully amortized over the remaining term and the borrower is now obligated to make principal and interest payments to the lender. It will then be like taking a 25 year mortgage (principal & interest payments) on an adjustable rate note tied to the then current indices + your margin specified in the note.

    Loan Amount is $650,000 with a Interest Rate of 6.50%

    Principal & Interest ( P + I ) Payment = $4,109

    Interest Only Payment = $3,520

    Misconceptions About Interest Only Loans


    A common misconception is that if you're not paying down your loan's principal, you're not building equity in your home. This isn't necessarily true. Homes in the U.S. have been appreciating significantly above the normal rate of 4% a year for the past decade. So, chances are that even if you're not paying down your principal, you're building equity in your home through appreciation. Furthermore, you can always pay more than the interest only payment by incuding some principal


    Calculate Your Interest-Only Payment 

     

    Interest Only Loans are available on 30 Year Fixed & Adjustable Rate Mortgages

    Interest Only on 30 yr fixed is for 10 years then re-amortized for remaining term of 20 years; 27,25 & 23 years for 3, 5 & 7 yr ARMs respectively. When you refinance your mortgage, you can always pay more towards principal as well.