What is Interest-Only Loan?
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hamid
Apprentice
Joined: 07 Aug 2006
Posts: 3
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 Posted: 04/16/09 - 05:36 Post subject: |
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| I have recently started thinking about buying a property. However, as I do not have too much money, I have to plan the costs very carefully. I would like to know what is an interest-only loan, and whether it is the one I should take. If anyone could tell me, that would be great. Thanks in advance. |
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raymond
Apprentice
Joined: 12 Jul 2008
Posts: 7
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| Posted: 05/15/09 - 21:37 Post subject: |
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| Every mortgage is actually a loan and each lender wants to get more money than he gave to you. Now, when it comes to interest-only mortgage, it differs a little from other types of mortgages. Whereas usually the monthly rate is calculated by adding the principal part of the mortgage to the interest, this kind of mortgage gives you a possibility to pay only interest rate every month for a certain fixed period of time. It is good if you want to pay a little in the beginning, but expect to have more money later on and thus cover your rates as successfully as possible. |
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