Interest Only Mortgages

Interest only mortgages were rising in popularity. A growing number of consumers bet that home values would continue to appreciate as they take on mortgages that sharply lower their costs. However, risks emerged when housing prices softened. You can take advantage of interest only mortgage if you have a strong history of managing your credit and are looking for additional cash flow flexibility at closing for the up front expenses associated with the purchase of your home. Interest only mortgages were all the rage, along with so called negative amortisation loansm whereby the buyer paid less than the interest due and the unpaid principal and interest is added on to the loan. Read as much information about refinancing before committing to an interest only mortgage which is a relatively new phenomenon in the refinancing industry as well as the home buying industry. Eventually, every interest only mortgage converts to a regular one, and unless you sell or refinance before that time is up, you'll see a steep rise in your monthly payments. Several mortgage brokers have reported that up to one in four applicants were taking out interest only mortgage instead of traditional repayment loans.