Interest Only Home Loans
For many San Diego Homeowners, investors, and first time home buyers one of the most important parts of the process is
understanding the potential positives or negatives of their mortgage program.
The Interest Only Mortgage is one of the most popular and misunderstood loan programs available in today's San Diego Home Purchase and San Diego refinance market. An interest only loan is a loan on which the borrower pays only the interest on the principal borrowed. For San Diego Home Owners currently in a fully amortized mortgage *principal and interest* it is easy to see that most of your monthly mortgage payment gets applied towards interest for the first 5 years of your loan term.
Many San Diego Home Buyers and Investors realize the benefit of obtaining an interest only loan, and more and more people are taking advantage of this phenomenal product. There are three main benefits with an interest only loan:
1) Since all interest paid on your mortgage is tax deductible by law your entire mortgage payment is a tax write off
2) On average a San Diego Homeowner refinances every 36 months, and with an interest only loan your payment is hundreds of dollars les than your fully amortized *principal and interest* payment which allots a negligible amount towards your principal balance in the first few yeas of your loan term.
3) With an interest only loan all money paid above your interest only payment is applied directly to the principal balance allowing you to pay off your mortgage in a shorter period of time.
With the superb appreciation that is experienced in our San Diego area market, many first time home buyers and investors are taking advantage of this incredible product. For the new home buyer, the interest only loan allows them to have the lowest possible payment in order to get their "foot in the door;" gaining an asset as well as a tax write off from their new home. For the San Diego Property Investor, the interest only loan allows for the lowest payment possible facilitating positive cash flow and enabling the investor to profit on the property without spending a large amount of money out of pocket or holding on to the property for a long period of time. To find out more about interest only loans, please fill out the inquiry form and you will be contacted by a SanDiegoHomeLoans.Org professional promptly.
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Example of $300,000 loan IO vs Amortized
Loan Amount: $300,000
Interest Rate: 5.75%
Amortized Payment: $1750
Interest Only Payment: $1437
Monthly Savings: $313