Low Interest Only Mortgage Rates Available

At American Financial Resources we pride ourselves on offering some of the best interest only mortgage rates available anywhere. Whether you are purchasing a new home or refinancing an existing mortgage you may want to consider the flexibility an interest only loan offers.

How does an interest only loan work?

In an interest only mortgage you pay only the interest on the loan for a certain period of time in the beginning of the term of the loan. If the loan is a fixed rate interest only mortgage the interest only term is generally 10 years or 15 years, and the loan is amortized (or spread out over) 30 years. This means that for the first 10 years of the loan you would pay only the interest portion of your payment (and any applicable escrows such as taxes and insurance). After that 10 year period is over you would begin to also pay the principal off in monthly installments over the remaining 20 years of the loan term. It is important to understand that the payment will go up considerably at the end of the interest only period, but this type of loan can be part of a smart financial strategy for many people.

Some of the reasons people opt for an interest only mortgage include:

• Income is currently reduced but expected it to increase within the next few years, such as for someone who has gone back to school to complete a degree, or a parent who is staying home to raise young children but plans to return to a career.
• The property is in an appreciating market and the homeowner expects to refinance before the end of the interest only period. Please note that all real estate investment carries risk. No one can perfectly predict whether home prices will rise or fall.

There are also adjustable rate interest only loans available. In this case the interest only period is the same as the initial fixed rate term. For example in a 5/1 interest only ARM only the interest portion of the payment (and any applicable escrows) would be due for the first 5 years of the mortgage.

Contact AFR to see if an interest only mortgage is right for you

Call 800-316-9508, request a quote, or Get Started through our website today. We look forward to speaking with you and helping you find the mortgage program that is a perfect fit!