Posted on: 07th Feb, 2006 03:49 pm
I am 19 yrs old, and have the opportunity to purchase a home. It's 1/1, I have the ability to add a bed and bath and sell in 2-3 years. Saving on the mortage would allow me to add the bed and bath. Is interest only smart for me?
Thank you
Thank you
Hi,
Interest only mortgage requires the interest to be paid for a short period of time 5 - 7 years, thus reducing the monthly payments. But you should be aware that the payment will increase considerably after that period with the loan amortized and you need to pay the principal.
Generally people who can't afford payments at present but expects the payment to steep increase in future go for it.
Also people who are thinking of some investments to meet the large payment at the end go for this loan.
If you can meet that large payment in the future, then only go for it, otherwise it becomes a problem for many.
Did you talk to any the lenders or brokers. Why don’t you consider for some other options?
Regards,
Blue
Interest only mortgage requires the interest to be paid for a short period of time 5 - 7 years, thus reducing the monthly payments. But you should be aware that the payment will increase considerably after that period with the loan amortized and you need to pay the principal.
Generally people who can't afford payments at present but expects the payment to steep increase in future go for it.
Also people who are thinking of some investments to meet the large payment at the end go for this loan.
If you can meet that large payment in the future, then only go for it, otherwise it becomes a problem for many.
Did you talk to any the lenders or brokers. Why don’t you consider for some other options?
Regards,
Blue
hi,
thanks for the quick reply. my parents are helping me figure this out. they found out about the interest only mortage and thought it would offer me lower monthly payments while i add the additon to make the home more sellable, a 1/1 is hard to sell here in swfl. this home was on the market 2 yrs ago for 49k, for a year and didn't sell. now, since property is going up so fast here, it's listed at 78k. propery is very expensive here, they thought this would get me started. i only plan on owning the property for as long as it takes me to add the addition, dad is a builder, we built our home across the street 10 years ago and are adding a 2400 sq ft garage now. so i know i can add the addition without borrowing more money. so the addition is easy. with the payments being deductable for taxes we thought that was a good benefit since at my age i have few deductions. as long as i plan on selling before the payment goes up is this ok? i mean i can sell or refinance at any time right? we don't know alot about this stuff, is there another type of mortgage that would work better for me?
thank you
david
thanks for the quick reply. my parents are helping me figure this out. they found out about the interest only mortage and thought it would offer me lower monthly payments while i add the additon to make the home more sellable, a 1/1 is hard to sell here in swfl. this home was on the market 2 yrs ago for 49k, for a year and didn't sell. now, since property is going up so fast here, it's listed at 78k. propery is very expensive here, they thought this would get me started. i only plan on owning the property for as long as it takes me to add the addition, dad is a builder, we built our home across the street 10 years ago and are adding a 2400 sq ft garage now. so i know i can add the addition without borrowing more money. so the addition is easy. with the payments being deductable for taxes we thought that was a good benefit since at my age i have few deductions. as long as i plan on selling before the payment goes up is this ok? i mean i can sell or refinance at any time right? we don't know alot about this stuff, is there another type of mortgage that would work better for me?
thank you
david
Hi,
Welcome to MortgageFit Forums.
I am glad to see your maturity at such an early age.
Interest only loan is a good option to increase the home purchasing power and who expects to sell the home off in less than ten years.
So, you can go for this mortgage to save the cash in the initial years and if you plan to sell it off within the next few.
Regarding the price hike of the homes, you should just have a consideration that if the home prices fail to go up in future, then it might be a problem.
So you must calculate the risks before you go for it.
For other mortgage types you need to mention your score, assets, income and debts to have a better suggestion.
God bless you.
For MortgageFit,
Samantha
Welcome to MortgageFit Forums.
I am glad to see your maturity at such an early age.
Interest only loan is a good option to increase the home purchasing power and who expects to sell the home off in less than ten years.
So, you can go for this mortgage to save the cash in the initial years and if you plan to sell it off within the next few.
Regarding the price hike of the homes, you should just have a consideration that if the home prices fail to go up in future, then it might be a problem.
So you must calculate the risks before you go for it.
For other mortgage types you need to mention your score, assets, income and debts to have a better suggestion.
God bless you.
For MortgageFit,
Samantha
