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Is An Interest Only Mortgage A Good Idea?
By Peter Kenny
If you are looking for a home but you know that paying a will be a severe drain on your finances, then perhaps you should look at getting an interest only mortgage. If you are unsure about what an interest only is and how it can help you, then this article can provide you with some useful tips on getting an interest only mortgage.
What is an interest only mortgage?
An interest only is a where you only pay back the interest on the loan, and none of the capital debt is repaid directly. Once you get to the end of the term, you will pay back the capital payment in full.
How do you pay back the capital?
Although you don’t pay the capital back directly through your monthly payments, you indirectly pay for the capital. You pay for the capital through an investment fund or other lump sum. So, instead of repaying your capital each month through payments, you may monthly payments into an investment fund. Apart from investment funds, the other main ways to pay off the capital are:
· Savings
· Switching to a repayment mortgage
· Another lump sum such as inheritance
What is the advantage of this?
Although you are still making monthly payments into an investment fund, these payments are likely to be a lot lower than the monthly payments you would pay on a normal repayment mortgage. Your
Americas Watchdog Offers Assistance For Frozen Or Devalued Cash Equivalents, ARS & Suggests Do's & Don'ts For A Wild 2009 Economic Ride
Americas Watchdog's Wall Street Fraud Watchdog is warning that from an economic standpoint, 2009 will make 2008 look like a walk in the park. In the strongest terms possible the Wall Street Fraud Watchdog is encouraging all US, or international investors, who were defrauded with auction rate securities, and or failed or frozen cash equivalents, to not sit on their hands, waiting for the government to come riding into the rescue. According to the group, " in the case of smaller banks or stock brokerage firms, it will not happen." The group is also offering to help and or assist Bernard Madoff victims that may have a possible SIPC claim. "2009 absolutely terrifies us, we are looking right down the barrel of a global economic meltdown, so if you have failed or frozen ARPS, Schwab Yield Plus, TD Ameritrade Reserve Yield Plus, or any other problematic cash equivalent call us, and we will try to help put you on a track to get your money back, before its too late." US or International investors who were duped into buying auction rate securities, failed or frozen cash equivalents can call the Wall Street Fraud Watchdog anytime at 866-714-6466 or visit their web site at Http://WallStreetFraudWatchdog.Com (PRWEB Jan 7, 2009)
Read the full story at http://www.emediawire.com/releases/2009/01/prweb1831204.htm ]]>
interest only payments will be low each month and so if you cannot afford to pay a lot each month at the moment, an interest only might be a good idea. Also, the idea is that the money you put into the investment fund will mature and leave you with enough money to pay off the capital at the end of the term as well as leaving you with some extra money.
Are there risks?
Of course, there are a number of potential risks of getting an interest only mortgage. The first problem is that if you are hoping to pay off the capital by switching to a repayment later on, you will be paying back a lot more money than if you started on a repayment mortgage. Although you may find it hard right now, getting a repayment to start with might be a better option. However, the main risk involved with interest only mortgages is that the investment fund you set up will not be enough to pay back the capital at the end of the term. If you cannot pay back the capital then you could end up losing your home at a time in your life that it will hit you hardest, such as at retirement age.
If you are going to take out an interest only mortgage, make sure that the funding method you use is safe, and that you have contingency plans if the fund is insufficient to pay back the capital. If you do this, then getting an interest only can be a great way of keeping your payments low whilst you improve your income.
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- Americas Watchdog Offers Assistance For Frozen Or Devalued Cash Equivalents, ARS & Suggests Do's & Don'ts For A Wild 2009 Economic Ride
Americas Watchdog's Wall Street Fraud Watchdog is warning that from an economic standpoint, 2009 will make 2008 look like a walk in the park. In the strongest terms possible the Wall Street Fraud Watchdog is encouraging all US, or international investors, who were defrauded with auction rate securities, and or failed or frozen cash equivalents, to not sit on their hands, waiting for the government to come riding into the rescue. According to the group, " in the case of smaller banks or stock brokerage firms, it will not happen." The group is also offering to help and or assist Bernard Madoff victims that may have a possible SIPC claim. "2009 absolutely terrifies us, we are looking right down the barrel of a global economic meltdown, so if you have failed or frozen ARPS, Schwab Yield Plus, TD Ameritrade Reserve Yield Plus, or any other problematic cash equivalent call us, and we will try to help put you on a track to get your money back, before its too late." US or International investors who were duped into buying auction rate securities, failed or frozen cash equivalents can call the Wall Street Fraud Watchdog anytime at 866-714-6466 or visit their web site at Http://WallStreetFraudWatchdog.Com (PRWEB Jan 7, 2009)
Read the full story at http://www.emediawire.com/releases/2009/01/prweb1831204.htm ]]>
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