The payments on an interest only mortgage are much less than with a traditional mortgage. Are the lower payments enough to justify whether this mortgage is the right choice for you? Ask yourself these four questions to determine if an interest only mortgage is the right choice for you.
If you’re looking to purchase a home anytime in the near future, I’m sure you’ve at least heard of a mortgage program that is gaining popularity known as an Interest- Only Mortgage. Unlike more traditional mortgage programs that require you to repay a portion of your principal with each payment, these programs only require interest payments. The payments are, therefore, much less. Does having a lower payment make this the right choice for you?
The answer depends on what I call your financial discipline. Do you have the ability to take the amount you are not paying back on your mortgage each month and put the money to some better use? Ask yourself these questions.
If you can answer “yes” to at least two of these questions, you’ve probably got the financial discipline to find a better use for the monthly principal payment on your mortgage other than paying down the mortgage. Be sure to ask you mortgage professional to review all of your options with you.
