Interest Only Mortgages

Something to consider, many builders and other investors obtain interest only mortgages, intending on using them for short term only.

Builders may only have the loan long enough to build and sell the house. I did some work in a Home-a-Rama home that was for sale for $925,000 and said his interest only loan was just a little over $2,000 a month. He said he had close to $850,000 in it. Whether or not he really had that much in it, I don't know, but not to bad, really.

Investors who flip property basically do the same as builders.

Investors who rent homes do it for the higher monthly income, that's also why many investors only own the homes for five years or so, they sell them for more than what they paid, and make more money in the mean time.

IOM's are wise if used to your advantage, and managed properly.

If one is good with their budgeting, an IOM can be the best. You can get one for your home, and put more into principal every month as if you had a higher payment, but in case something unexpected happens, you have low payments you can rely on if needed.

For those younger buyers who stastically only are in the house for 5 - 6 years, it should seriously be looked at.

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