Information Center, Loan Types
Interest Only Home Loans
October 9, 2008 by Mortgage Align · Leave a Comment
Interest-only mortgages are loans secured by real estate which have an option to make payments on the interest for a period of time. That time period is limited to the first five or ten years of the loan. After that period, the loan is amortized for the remainder of its term. This means the payments move up to an amortized amount but the loan balance is not increased. Two popular mortgages are a 30-year loan where the borrower has the option to pay interest-only for the first 60 months and a 40-year loan where the borrower has the option to pay interest-only for the first 120 months of the loan.
