An interest-only mortgage is one in which you only pay back interest with no principal for a certain clip period of time. After this clip period, which is usually five to 10 years, the payment additions to include repayment of both interest and principal. Most lenders in Florida offer interest-only mortgages. As with any other mortgage, this option plant best if you understand its advantages and disadvantages.

If you need a lower payment initially and expect you will be able to do larger payments later, an interest-only mortgage may be the right pick for you. Alternatively, if you desire a larger mortgage to purchase a more than than expensive house, an interest only mortgage may assist because the initial payment you are required to do is smaller so you can borrow more. Interest-only mortgages may also be convenient for people who have got an irregular income. If your cash flow is irregular and you still desire to purchase a house, an interest only mortgage may work. When you have got more than than cash available, you can pay off portion of the principal and the interest even before you need to.

The bulk of interest-only mortgages offer adjustable rates, so if interest rates rise in the future, you may stop up paying more. For as long as you pay interest only, you make not pay off any part of the mortgage, and therefore, make not make wealth. A good strategy to avoid this is to pay off a certain portion of the principal as often as possible in the interest only old age of your mortgage.

Some lenders may mislead consumers by making them believe interest-only mortgages save money. If none of the advantages of an interest only mortgage apply to you, see examining other mortgage options instead.