You may also consider a mortgage…
…loan where you only pay the interest each month. This type of loan is known as an interest only loan. It is important to remember that since you will only be paying the interest each month your principal won’t be reducing. Meaning if you took out a $250,000 loan to purchase a home and have an interest only loan after 5 years, for example, you will still owe $250,000.
These loans work well in areas of rapid or moderate property value appreciation. While these loans aren’t for everyone, they are an attractive alternative to a regular 30 year fixed rate mortgage product.
