Interest-Only Loans: What to Know
AuthorReal Estate Experts. Date:
Interest-only loans are a type of loan in which the borrower pays only the interest for some or all of the term, with the principal balance unchanged during the interest-only period. At the end of the interest-only term, the borrower must repay the entire principal balance in a lump sum. Most homebuyers won’t consider this type of loan because it often has a specific purpose, such as when flipping houses. In this article, we will discuss everything you need to know about interest-only loans so that you can make an informed decision if this is the right type of loan for your home buying needs. What is an Interest-Only Loan? As we noted earlier, it is a specific type of loan in which the borrower pays only the interest for some or all of the term, with the principal balance unchanged during the interest-only period. The main reason why people … Continued
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