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You are buying the home of your dreams with an ""interest-only mortgage!"" You'll get a low mortgage payment, and you'll maximize your tax deduction Wholesale Ronald Jones II Jersey , all on your current income! Everything seems to be going good. But have you actually understood the notion of interest-only mortgage and how it functions?


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The interest only product was initially designed for persons whose income is cyclical. Borrowers with unpredictable incomes may value the flexibility the IO mortgage gives them. When their finances are tight, they can make the IO payment, and when they are flush they can make a considerable payment to principal.


Financial advisers don't recommend interest-only mortgages to regular wage earners who take out moderate-size home loans and don't have a strategy for investing the savings.


Don't rule out interest-only mortgages. Think it's pro and cons to your specific situation and the lender you would be working with. On the hind side also bear in mind to question yourself that interest-only payment may be working for friends or family but does it work for you?

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