An interest only loan is a loan in which only the interest is repaid throughout the course of the loan. The original amount is repaid at the end of the term of the loan, rolled over by the same bank, or refinanced by the owner. A loan is considered “interest only” if the monthly payment does not include any repayment of principal – the payment covers only the interest and the actual loan balance remains unchanged. This type of loan can be done on a fixed rate or ARM loan.
Interest only loans are usually set for a fixed term, such as ten years for mortgage loans, during which the loan amount remains the same. At the end of the term, the mortgage reverts to a conventional loan and the loan amount begins to decrease.
Although interest only loans have a lot of risks, the following people may benefit from an interest only loan.
To qualify for an interest only loan, a borrower has to contact a lender that offers interest only loans. Just like other home loans, the borrowers credit score, employment history, monthly income, monthly debts and credit history will be checked.
Contact Meridian Mortgage if you would like to apply for an interest only loan.
For more information on applying for an interest only loan, contact Meridian Mortgage at 317-968-9500 or contact us online.
Meridian Mortgage Solutions is a subsidiary of Endeavor Capital, LLC Licensed through the Indiana Department of Finance and Insurance. License #17519 & 17520, NMLS#222524
Endeavor Capital, LLC and its DBA's are not acting on behalf of or at the direction of HUD/FA or the Federal government.
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