Interest Only
Interest is what a borrower pays a lender over and above the original amount of the loan, as compensation for the use of the money over a specified period of time. An interest only loan requires a payment that pays the interest that has accrued on the loan for the current month, but with no principal reduction required at all for some specified amount of time, outlined in the Note signed at closing. Permanent mortgage loans normally only allow interest-only payments for lower cash flow for a specific number of years. The most common is the 5-year interest only product, yet there are many other types available in the marketplace. Keep Reading...