Interest Only Mortgages
There are many mortgages that are available, and that you may qualify for, and be interested in. Today many lenders are pushing borrowers towards interest-only mortgages. However, you must be aware that interest only mortgage is not for everyone.
An interest only mortgage is a loan where you will only pay the interest on the mortgage monthly for a fixed term, once the term has ended, you have to option to remortgage, pay the balance in a lump sum, or you start paying off the principal. The typical term of an interest only mortgage is usually five to seven years. Most people will end up remortgaging their loan if they are unable to come up with the balance of the mortgage by the end of the term. If you choose to pay off the principal at the end of the term it may prove to be very costly.
You should only consider taking out an interest only mortgage if your income is mostly in the form of infrequent commissions or bonuses, or if you expect to earn a lot more within a few years. You should really only consider an interest only mortgage if you know you will invest the savings that you are making by paying just the interest on the loan. If you are a regular wage earner, financial advisors do not recommend getting an interest only mortgage, especially if they have no strategy for investing the savings.
It is worth discussing your options with your lender or broker to see what type of mortgage is best for you, and if an interest only mortgage is suitable for you and your needs. By browsing and searching for the best offers, you will benefit greatly from the time and dedication that you committed to your search.