Guide to Interest Only Mortgages
Here is a useful guide to interest only mortgages. An interest only mortgage is one where your regular payments only go to pay off the interest on the money you borrow. You will invest to pay off the capital sum at the end of the mortgage term.
An interest only mortgage means your monthly payments cover only the interest on the loan. They do not pay off the amount you owe. So, at the end of the mortgage term, assuming you have made all the interest payments, you will owe the same amount that you borrowed at the beginning. You need to have a lump sum available to pay the mortgage back in one go at this time.
An interest only mortgage stays the same throughout the mortgage term. Interest and a premium to an investment scheme are paid monthly. At the end of the term, the proceeds from the investment vehicle are intended to repay the mortgage. The amount will depend on the performance of the investment scheme. If you choose an interest-only mortgage you are responsible for ensuring that you have sufficient funds available to repay your mortgage at the end of the term.
With this type of mortgage you only pay the interest accrued on the mortgage each month. It is usual for the borrower to take out a savings or investment plan at the same time as applying for the mortgage; this could be an ISA, Pension or Endowment plan.
Endowment policies used to be a popular way to build up funds to repay the capital of interest-only mortgages. However, some people have found these policies haven't built up enough money to pay off the full mortgage amount at the end of the mortgage term.
Make sure you make arrangements to pay off the loan when the mortgage ends. If you don't, you could lose your home.
The main advantage to an interest only mortgage is initially seen in the payments you make to your lender. The fact that you will only be repaying your interest here means that your monthly payments will be much lower than they would be for a repayment product.
If your investment does not give you good enough returns, you won't have enough money to repay the capital owed. So, it's vital to take good and qualified advice before buying an interest only product and then to track your investment progress on a regular basis.
You also need to consider the fact that the rates you get for an interest only mortgage may not be as favourable as those on offer for repayment mortgages.
You may freely reprint this article provided the author's biography remains intact:
About The Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.
 Google News Updated : Mon, 13 Oct 2008 23:51:55 GMT Romo Out For a Month - Washington Post
Washington Post - The Dallas Cowboys will be without quarterback Tony Romo for as long as a month because of a broken finger on his throwing hand. Romo suffered a broken right pinkie on the first play of overtime of the Cowboys' loss Sunday at Arizona, according to a ... Romo sidelined with broken finger Cowboys' Romo has broken finger, may miss 4 weeks Publ.Date : Mon, 13 Oct 2008 18:10:26 GMT Stocks Soar on Wall Street as Markets Bounce Back from Worst Rout ... - Voice of America
Voice of America - By Barry Wood The Dow Jones Industrial Average Monday registered its biggest daily point gain ever, gaining 936 points or 11 percent. Wall Street explodes, marks biggest 1-day gain Dow Surges On Global Bailout Plans Publ.Date : Mon, 13 Oct 2008 23:09:50 GMT Rangers Prospect Cherepanov Dies After Collapsing During Game - New York Times
New York Times - By Stu Hackel Nineteen-year-old Russian forward Alexei Cherepanov, who was a Rangers first-round draft choice in 2007 and considered one of the organization’s top prospects, died on Monday after collapsing near the end of a game between his KHL team ... Cherepanov collapses on bench during game, dies at 19 Rangers prospect dies during game in Russia Publ.Date : Mon, 13 Oct 2008 22:37:16 GMT North Korea Reopens Yongbyon Nuclear Reactor to UN Inspectors - Bloomberg
Bloomberg - By Bill Varner Oct. 13 (Bloomberg) -- The United Nations' nuclear watchdog agency was given access today to North Korea's plutonium- producing plant at Yongbyon, a reaction to the US decision to remove the nation from its list of states sponsoring ... NKorea grants UN nuclear watchdog access to Yongbyon: IAEA North Korea allows back nuclear inspectors Publ.Date : Mon, 13 Oct 2008 21:38:19 GMT Britain withdraws terror detention law after defeat - AFP
AFP - LONDON (AFP) - The British government on Monday withdrew a plan to extend the time suspected violent extremists can be held without charge after the House of Lords voted against it. House of Lords deals fatal blow to 42-day terror detention plans Ministers drop 42-day detention Publ.Date : Mon, 13 Oct 2008 23:01:32 GMT Palin: We can't let 'leftist groups…steal this election' - CNN Political Ticker
CNN Political Ticker - “The truth is that far-left groups in this country will do anything to help the Obama-Biden Democrats win the White House and maintain their majorities in Congress,” Alaska Gov. Voter registration boom favors Obama NC elections broad probes ACORN forms Publ.Date : Mon, 13 Oct 2008 22:39:24 GMT Caffeine Consumption Doesn't Raise Overall Breast Cancer Risk - Washington Post
Washington Post - By Alan Mozes MONDAY, Oct. 13 (HealthDay News) -- Drinking coffee or consuming other caffeine-laden foods does not appear to boost breast cancer risk, new research indicates. Caffeine, Breast Cancer Link Minimal Caffeine 'can increase breast cancer risk' Publ.Date : Mon, 13 Oct 2008 22:00:13 GMT Increase Traffic |
PARLOT::Ebooks, Scripts,
Websites, and more... A Self-Certification mortgage is a mortgage designed for people who... Read More Your home is a source of pride and accomplishment. Did... Read More A house is just that, a house, until someone lives... Read More Having poor credit alone cannot hold you back from getting... Read More With the many different kinds of mortgage loans out there,... Read More This is what a mortgage can do for you!AND Why... Read More Getting home loans is possibly the biggest step in an... Read More Financing your new home loan online can save you time... Read More What is a "Reverse Mortgage?"Also known as a Home Equity... Read More A pension mortgage may seem lucrative at the first sight.... Read More Current economic scene has hinted towards a fall in the... Read More A house is just perfect with chipped walls and broken... Read More How does an ARM work.The borrowers interest rate is determined... Read More Home loans for people with poor credit demand that you... Read More People who are looking for a mortgage today have many... Read More You have probably received refinancing offers in the mail or... Read More A commercial mortgage is a loan that uses commercial property... Read More Your goal is not only to find the best rates... Read More Buying a home with bad credit is possible with the... Read More Online real estate mortgage loans enable borrowers to be sure... Read More Searching for a mortgage can sometimes be a hassle. Where... Read More Mortgages have assumed a number of characters from the time... Read More If you have bad credit and are looking to get... Read More Interest rates and fees vary between subprime lenders just like... Read More Mortgage Debt Elimination shows that most home loan debts will... Read More
Adsense
websites
What is a Self-Certification Mortgage?
5 Ways to Use Your Home Equity Line of Credit
Buying a House or a Home?
Bad Credit Home Financing - Get The Mortgage Loan You Want Even With Poor Credit
Mortgage Loans Explained In Plain English
Why You Should Not Get Hung Up on the Interest Rates!!
Tips for Getting Home Loans from the Right Lenders
Buying A Home? Reasons to Consider Financing Your New Home Loan Online
Who Could Benefit From A Reverse Mortgage?
Flexible Mortgages - Offering Relief from the Fixed Mortgage
Remortgage ? When Monthly Mortgage Payments are Touching New Heights
Secured Loans For Home Improvement ? When You Can?t Buy A Luxury Home
Adjustable Rate Mortgage - How They Work?
Home Loans For People With Poor Credit - Understanding The Requirements For a Subprime Mortgage
Look For a Great Mortgage Online
2nd Mortgage - Better Than Refinancing
What is a Commercial Mortgage?
5 Things In Selecting The Best Mortgage - You Should Know
Buying a Home With Bad Credit - Why a Recent Bankruptcy Will Not Stop You From Getting Approved
Real Estate Mortgage Loans Online
Mortgage Clarksville - Find the Best Deal
Reverse Mortgages ? a Reversal of the Mortgage Process
Sub-Prime Mortgage Company - 4 Signs of a Predatory Sub-Prime Lender
Bad Credit Mortgage Lenders - Things You Should Know About Subprime Lenders
Mortgage Debt Elimination in 5 to 7 years!
Affordable and Reliable Web Hosting Starting at $4.49/Month
Is an ARM Right For You?
Let's start by taking a look at 7 key elements... Read More
Who Could Benefit From A Reverse Mortgage?
What is a "Reverse Mortgage?"Also known as a Home Equity... Read More
Kingsland Saint Marys & Kings Bay Real Estate - VA Mortgage Information For Home Buyers
A VA guaranteed mortgage is the usually the best way... Read More
Why Get Pre-Approved For A Mortgage?
One of the most important steps in the home buying... Read More
Buying a House or a Home?
A house is just that, a house, until someone lives... Read More
Decision Time: Home Equity Loan or Home Equity Line of Credit?
Home equity loans and home equity lines of credit continue... Read More
A Guide to Selecting a Mortgage Broker in Australia
Once you have made the decision to buy a home... Read More
Essence of Self Certified Mortgages
Your search for a mortgage isn't leading results.Check for any... Read More
Home Loans: What You Should Know!
Finding home loans can be a daunting task, whether you're... Read More
Cash Out Refinance Mortgage Loans ? Home Equity, 2nd Mortgage or Cash Out Refinance Loan
There are some definite benefits to doing a cash out... Read More
Home Equity Lines of Credit - the Basics
A Home equity line of credit is a loan which... Read More
How to Find the Best Home Improvement Loan
If you're looking for the best home improvement loan for... Read More
Stopping Foreclosures
If you as an investor understand the process, you will... Read More
Home Equity Loans
Home equity loans are a popular way for homeowners to... Read More
Finding the Best Home Improvement Loans
When the time comes to do work around the house,... Read More
A Mortgage and Bank Trick You Should Avoid at All Costs
Once you've purchased your home, you will begin to get... Read More
Finding the Best Homeowner Loans for Your Money
Looking for the best homeowner loans can be stressful, especially... Read More
Find the Best Mortgage Company
If you do not wish to commit to living in... Read More
Stock Market, Bonds, Deposit Account, Cash, Equities, Unit Trusts - Few, Just Few of the Ways of Sav
Man has been known for continually simplifying things in his... Read More
Refinance Your Home Mortgage Online
The largest financial obligation most people ever take on couldn't... Read More
How To Save Thousands in Interest on Your Home Mortgage!
So you have a mortgage on your home or planning... Read More
How Not To Be Ripped Off By Mortgage Brokers
One of the things that bothers me about the mortgage... Read More
Kings Bay Saint Marys & Kingsland Georgia Real Estate - Getting a Home Loan with Damaged Credit
So, you have made the decision that you would like... Read More
How to Buy a Home Without a Down Payment
Mortgage rates are rising and it's becoming more difficult for... Read More
Home Buying ? What Can You Afford?
Okay, you've decided to buy a home and are trying... Read More
Mortgage Refinance |