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What is an interest only mortgage in laymans terms?

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2005-10-11 15:43:25
2005-10-11 15:43:25

It's a home loan where instead of paying principal plus interest each month, you pay only the interest. Example: You borrow $100,000 for five years. At the end of the five years, after making payments each month you will still owe $100,000 (because you've only paid the interest on the loan.) People get interest only loans so they can afford a bigger house -- the payments may be $500 per month(or even less) instead of $750. But it's really not the best idea because if you keep getting interest only loans, you never own the house. An interest-only loan may be a good idea in some situations, for example if one partner is in college and you expect to have higher income when they graduate. If possible, it's better to get a conventional loan on a less expensive house, or to save at least a modest down payment(for a first home.)

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Fixed Rate Mortgage vs. Interest Only Mortgage A fixed rate mortgage has the same payment for the entire term of the loan. Use this calculator to compare a fixed rate mortgage to Interest Only Mortgage.

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An online website called Bankrate provides a mortgage calculator for interest only. 'Good Mortgage' and 'Mortgage Calculator' also are good places to find a mortgage calculator for interest only.

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Yes, but if the mortgagor defaults on the mortgage you can only acquire their partial interest by foreclosing on the mortgage.Yes, but if the mortgagor defaults on the mortgage you can only acquire their partial interest by foreclosing on the mortgage.Yes, but if the mortgagor defaults on the mortgage you can only acquire their partial interest by foreclosing on the mortgage.Yes, but if the mortgagor defaults on the mortgage you can only acquire their partial interest by foreclosing on the mortgage.

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If you own an interest in the property and didn't sign the mortgage then your interest isn't covered by the mortgage. Assuming only the co-owner signed a mortgage, in the case of a default the bank could only foreclose on their interest, not yours.

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An interest-only mortgage calculator can help you determine how much money you'll save by getting a shorter-term mortgage, refinancing your mortgage and/or making additional payments on your mortgage.

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A mortgage is valid only against the interest of the person who granted the mortgage. If you own real estate with another person and they grant a mortgage then your interest isn't affected. If the lender forecloses it only acquires the interest of the one person who granted he mortgage.

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I do not recommend an interest only mortgage for a single mom.I have an interest only morgage and after four years I am where I started with my loan. It gives you a false sense of security.

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An interest only loan mortgage accomplished a few things. These 'things' consist of a very small principle payment, or even just interest only payments.

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The best place to find a mortgage interest only calculator is on a computer at a banking mortgage website that specializes in mortgage loans. Here one can manipulate numbers to get an estimate.

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No, why would you want to pay for interest only on a mortgage and not the principle. In order to pay the mortgage off you have to pay on the principle.

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It is considered a term mortgage which is how mortgages were before the amortized mortgage. In a amortized mortgage a part of every payment goes to principal (the amount you owe) and a part goes toward interest (what the bank charges to loan you the money) In the beginning almost all of the payment goes toward interest but as time goes by more goes toward the principal and less toward the interest until the principal is paid off. The interest only mortgage only pays the interest so you never pay off your debt.

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You can check with your local bank or you can check with other financial institutes such as ING or commerce Bank in order to get an interest only mortgage.

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The purpose is to help determine the amortization schedule would be for an interest only mortgage. It also helps determine how principal payments made to reduce the mortgage balance will affect the schedule.

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Interest Only Mortgage Calculator Use this calculator to generate an amortization schedule for an interest only mortgage. Quickly see how much interest you will pay and your principal balances. You can even determine the impact of any principal prepayments. Press the "View Report" button for a full yearly or monthly amortization schedule.

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No, you don't get all interest back in any mortgage in tax. The most you get is a deduction, that is a loering of your taxable income by that interest amount. (So if you are in the 20% tax bracket and have $100 of qualified mortgage interest, your tax is reduced by $20).

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An interest only mortgage means monthly payments only go towards paying the interest and the actual borrowed amount is only paid at the end of the mortgage period, funded by something like a savings account. However, with these types of mortgages, some people have concerns about being able to pay the final amount.

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An interest only mortgage calculator helps a home owner determine how a payment is broken down including the amount of interest in each payment. It is a great tool for any homeowner.

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No interest should only be charged if you are in a mortgage.

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You may be able to obtain a no interest mortgage loan by visiting the Federal Housing Finance Agency website. The FHFA have been thinking about offering no interest only mortgage plans, which currently no company does.

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When a person is looking to buy a new home, a mortgage finder is very useful at comparing interest rates and terms. There will be options of interest only or repayment mortgages and it is a great way of seeing the difference.

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There is a website called Bankrate that has an interest only mortgage refinance calculator. Just enter in your info such as the loan amount and the rest is easy.

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You can find one on the following sites that I found for you at these sites www.bankrate.com/calculators/.../interest-only-mortgage-pay. , www.planabettermortgage.com.au/...calculators/p--I--interest-o

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