Simplified explanations of common mortgages and loans
- Conforming Loans
- Construction Financing
- Conventional Loans
- FHA Loans
- First Time Homebuyer
- Mortgages for Foreigners
- HARP Refinance
- Interest Only
- Jumbo Loans
- Reverse Mortgages
- Second Home
- VA Loans
Various articles explaining the variations and implications of a commonly used mortgage terminology.
Florida Interest Only Mortgage Loans
Here in Florida and in most of the United States, a five or ten year interest-only period is typical. At the end of the scheduled time frame it's common that the principal balance begins the amortized stage for the remaining scheduled life of the mortgage loan. In other words, if a borrower had a thirty-year mortgage loan and the first five years were interest only, at the end of the first five years, the principal balance would be amortized over the remaining period of twenty five years.
The practical result is that the early payments (in the interest-only period) are much lower than the later payments.
The adjustable rate interest only mortgage loan is even a greater risk to both the consumer and the Lender. At Solutions First Mortgage Inc. we do not recommend these types of loans.
Interest Only Mortgage Loans Available in Florida
At Solutions First Mortgage Inc. we believe an Interest Only Mortgage Loan should only be used for people who intend on only to hold the property for a short period of time, generally less than three years.
Most often these types of loans are best used for someone like a real estate investor or contractor who has a strategic plan to purchase real estate only to hold for a short period of time. Whether to renovate and flip or to create an income generating property or lease option property
We highly recommend the purchaser should have a very good understanding of real estate market trends, market fluctuations, and market risk. A good real estate investor should always have a good exit strategy as part of their business plan. A consumer on a fixed income, who does not have the means or the ability to increase their income on short notice and cannot sustain the higher income or a higher mortgage loan payment for long period of time should not consider an Interest Only Mortgage Loan.
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Reverse Mortgage Purchase
Construction Loans Interest Only Second Home Vacant Land Financing
Home Buying - understanding the buying process
Keeping in order – the paperwork process
Different loan types
Rent vs own
Mortgage Rates Locking in interest rate
Purchase strategies Pre-qualification vs Pre-approval Avoidable Expenses
READ THIS FIRST
Qualifying for a mortgage
Zero down – VA, USDA & seller concessions
Contractual Finance Clauses -
Loan and Mortgage types
Settlement cost – What is the HUD1?
Good faith estimate – the maximum cost to obtain the loan
The Til – Truth in Lending
RESPA – Real Estate Settlement Protection Act
Mortgage Insurance - PMI
Disclosures – Understanding Disclosures
Servicing – Banks
Economy/ Markets – the impact on rates
Fannie & Freddie – why they important to you
Credit Score – How credit score affect your interest rate
Read our blog about everything involved in finding, buying and living in your new home from a mortgage brokers perspective.
Read my opinions about legislation, what it means, how I understand it and how it could be improved.
We have online newsletters and classes explaining in layman’s terms how mortgages work and how to choose the best one for you