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Use Of Interest-Only Loans

Use of interest-only loans was unheard of just a few years ago, but in the last year these loans have exploded, giving many home buyers leverage against escalating home prices and enabling them to buy homes. A recent wells fargo survey of american homeowners showed that the majority of homeowners do pay principal on interest-only loans when they are flush with cash. 73% Pay both the principal and interest at least some of the time. Only 25% pay only interest all of the time. Interest-only options on home loans give the home buyer the flexibility to choose how much to pay on their mortgage each month – just the interest-only payment or a little extra to pay down that principal.

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