Interest only loans are an intellectual preference especially in the short term. Interest only loans are not considered to be a long-term option. Generally speaking, five to seven years is considered to be the average time spent in one home before selling or refinancing and the interest only loan only needs to cover this period. You can afford more of a house because the lower initial payments allow you to opt for a larger loan. You can use the money you save on making investments, paying bills or making expansion to your house. Moreover, you can take advantage of lower rates without having to refinance and can more easily qualify for this type of loan.

Interest only loans can also be risky. In times of falling property prices you could be forced to sell your house for a loss if the sale price is less than the principal still owing on the loan. This is known as negative equity. In the right situation and for the right person interest only loans can be a very useful option. For a low-cost, short term property investment the benefits can easily outweigh the disadvantages.

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Banks frequently propose mortgages and many people get attracted to these proposals. This article can guide you to understand whether the home mortgages offered by banks are a good option or not.

There are many options offering mortgages, banks, mortgage lenders, independent agencies and loan shark. How can one determine the best mortgage option? It’s important to understand that everyone would make you believe that they offer the best home mortgages. However the truth is that some do offer the best while others have rates which are less favorable.

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