Ameristar Mortgage Blog

Illinois interest only mortgage loans and Wisconsin interest only loans come in many variations, but in general you pay a fixed rate of interest but no principal for the first five to ten years, and then the loan becomes a fully amortized fixed or adjustable rate loan for the next 20 to 25 years. Interest only loans may be attractive to the first time home owners by offering low monthly payments for up to ten years, thus allowing people the opportunity to buy a home at prices they would be able to afford.

For additional information on Wisconsin and Illinois interest only loans visit our Interest Only mortgage program page on our website.

Interest-only loans are generally not long term loan programs. Interest only mortgages are for borrowers who have a valid use for a lower initial required payment, and are prepared to deal with the fully amortized payment at the end of the interest only period. Interest only loans do carry higher risks, and borrowers must understand these risks.

They may turn out to be bad financial decisions if housing prices drop, causing those borrowers to carry a mortgage larger than the value of the house, which in turn will make it impossible to refinance the house into a fixed-rate mortgage.  They also can attract to people who are interested in investing the money that they would otherwise pay towards the principle of the loan.

Interest-only loans, as the name implies, allow borrowers to pay back only the interest portion of their mortgages for a certain period, typically 5 or 10 years. If two mortgages are identical except that only one has an interest-only option, lenders view that one as riskier. Lenders usually charge a higher rate for an identical loan with an interest-only option, for reasons indicated above.

For additional information on Wisconsin and Illinois interest only loans visit our Interest Only mortgage program page on our website.

Contact Ameristar Mortgage for additional information on our Wisconsin and Illinois interest only mortgage programs:

Dennis Hardy
Local: (608) 242-0826 x23
Toll Free: (877) 240-5840
dennis.hardy@ameristarmadison.com
www.AmeristarMadison.com

Visit my blog at http://www.ameristarmadison.com/blog/