Interest Only Home Loans

[Full Quiver]

From what I have read Pastorables has not said he can't make the payment or that the payment is too much. What he has said is that with an IO loan he will be able to focus on other financial matters, I assume pay them off, and then turn his entire focus on the mortgage.

[dolfan]

Has anyone said otherwise?

[one love]

I totally agree btw on all the warnings.. but on the other hand...

I had an interest only loan on a second home that I owned. It allowed me to invest into the home and raise the quality/resell price of the home instead of paying a full typical note. Note: I did pay several big installments on the home bringing down the interest only note over the years... so you have to be disciplined to actually PAY on the principle etc. The biggest negative was that the note fluctuated based on the immediate interest rate. The interest rate practically doubled by the end of my ownership.

In the end.. I made a very nice profit when I sold it using that money to enhance and not divert cost.

So it depends on how you use it.

This is the way many have made money but using it for a long term loan is what is causing so many forclosures unless you have the money and are expecting the increase to happen...

[one love]

I totally agree btw on all the warnings.. but on the other hand...

I had an interest only loan on a second home that I owned. It allowed me to invest into the home and raise the quality/resell price of the home instead of paying a full typical note. Note: I did pay several big installments on the home bringing down the interest only note over the years... so you have to be disciplined to actually PAY on the principle etc. The biggest negative was that the note fluctuated based on the immediate interest rate. The interest rate practically doubled by the end of my ownership.

In the end.. I made a very nice profit when I sold it using that money to enhance and not divert cost.

So it depends on how you use it.

This is the way many have made money but using it for a long term loan is what is causing so many forclosures unless you have the money and are expecting the increase to happen...

[Pastor Bill]

From what I have read Pastorables has not said he can't make the payment or that the payment is too much. What he has said is that with an IO loan he will be able to focus on other financial matters, I assume pay them off, and then turn his entire focus on the mortgage.

We know that, but it is still risky, and it would be much safer to wait on the purchase till the money is available.

[Full Quiver]

Well a couple of times it was said if you can't afford it don't buy it or sell it. Considering that he already owns the home, he mentioned his 100% loan, one might conclude that it was implied that he needed to sell and downsize.

Just another perspective.

[pastorables]

Considering that he already owns the home, he mentioned his 100% loan, one might conclude that it was implied that he needed to sell and downsize.

Actually, I am in the process of selling one property which is on a 100% loan for 30 years. I don't see how the interest could be any worse than what I'm losing now.

My question concerning IO loans arises as one option among several. From what I've read, the IO loan isn't the monster that it has been labeled. Is it for everyone? Probably not. I am just looking at this particular loan from the vantage point of securing a very affordable payment while paying off some business notes, etc. The five year window would give me ample time to pay off other notes and then apply those investments toward a refinance of a home. Paying off the business notes within the next few years would free up a few thousand monthly which would transfer perfectly toward the house principle, etc.

However, I have not made any concrete decisions.

Thanks,
pa