Are Interest Only Loans the Best Mortgage Available?

Many people think an interest only mortgage is theloan you will have no way to pay off the capital.
best mortgage, but is it really? Since interest onlyThen, you will be without a house.
loans have a lower monthly payment than otherAnother important thing to consider is: if you do
loans, it appears to be the best mortgage loanrefinance the home at some point, you will still have
available. However, interest only loans have a majorthe same amount of capital to finance. Meaning
drawback and should only be used in specific cases.every payment you made up to that point was
I must admit, I used an interest only loan. I did itwasted. In my situation, I knew the money would be
knowing fully well what I was getting into. I paid thelost. I considered it like renting the house for a few
interest only on my house until my contracted jobmonths before buying. Still, all the interest I paid on
began to pay. I knew I was under contract and theythe home was lost. After the three months, I had to
would begin paying me in 3 months. I needed toget a loan for the same amount. The only difference
move so I bought a home with an interest onlywas my payment was higher because I began paying
mortgage. Then as soon as I started getting theoff the capital.
new pay, I refinanced my home and got a standardAn interest only mortgage may be the best
mortgage. It worked well in my situation.mortgage for you but you need to go in with your
The problem with interest only loans is peopleeyes wide open. You don't want to get an interest
generally don't have a way to pay off the houseonly loan and then be shocked 20 years later when
after the interest only loan ends. If you can't affordyou paid off the interest but still owe the capital on
the capital and interest then an interest loan is notyour home.
for you. Otherwise, at the end of the interest only