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Interest Only Finance: What You Need To Know
By Matt Schaub
With an interest-only loan, you can simply pay the interest. Or you can pay the interest, plus as much of the principal that you decide to pay in any given month. Interest-only loans, which are available for a fixed number of years – and always in the loan’s initial years – may be fixed-rate mortgages or adjustable rate mortgages (ARMs).
This is how they work: in the month that you opt for interest-only, your payment is lower than a principal plus interest payment would have been. This payment flexibility gives you a great deal of control over your personal finances. Many people, recognizing the control of their personal cash flow afforded by an interest-only loan, have decided to refinance from traditional home loans to interest-only loans. For an example of the payment flexibility in such a refinance, let’s take a look at how refinancing a $200,000 traditional mortgage to an interest-only mortgage might work:
$200K @ 5.75% Interest-Only Payment.............$958.00
$200K @ 5.75% Principal and Interest Payment....$1,167.00
Cash flow difference is $209.00 a month.
The Advantages of Interest-Only Refinance
With an interest-only loan, you can simply pay the interest. Or you can pay the interest, plus as much of the principal that you decide to pay in any given month. Interest-only loans, which are available for a fixed number of years – and always in the loan’s initial years – may be fixed-rate mortgages or adjustable rate mortgages (ARMs).
This is how they work: in the month that you opt for interest-only, your payment is lower than a principal plus interest payment would have been. This payment flexibility gives you a great deal of control over your personal finances. Many people, recognizing the control of their personal cash flow afforded by an interest-only loan, have decided to refinance from traditional home loans to interest-only loans. For an example of the payment flexibility in such a refinance, let’s take a look at how refinancing a $200,000 traditional mortgage to an interest-only mortgage might work:
$200K @ 5.75% Interest-Only Payment.............$958.00
$200K @ 5.75% Principal and Interest Payment....$1,167.00
Cash flow difference is $209.00 a month.
The Advantages of Interest-Only Refinance
How Can You Finance A Mortgage?By Chris Snow
Most homeowners purchase their houses through mortgage finance or a loan. There have been many changes in home mortgage financing and loans in the past ten years, bringing many benefits to homebuyers. These changes also bring some significant tradeoffs. The greatest benefit a homeowner received from the changes in mortgage finance is that there are more choices. More choice means a homebuyer can effectively shop around for the best mortgage finance deals and make better decisions. Car FinanceBy Joseph Kenny
These days when you step into a car showroom, there will be two major things that the dealer will be offering you. First he will be offering you cars, and secondly he will be offering you finance packages. This is how you should look at it. The fact of the matter is you may probably wouldn’t buy a car from your bank, even if they started offering them, so you may wish to apply the same scrutiny to the finance packages available at the car dealership and choose to buy only you car there and the finance package elsewhere. It may be that there is nothing wrong with the finance being offered at the car dealership and in many cases this will be true. However, you must be aware that just because you buy your car there, does not in any way imply that you have to use the finance options and terms that they are offering. You are always free to take a loan from somewhere else, such as a bank, and pay for the car outright, and then simply make the loan repayments to the bank as with any other loan. |
Understanding FinanceBy Jay Ashley
Finance sounds like a heavy term. It seems to be a thing only for big businessmen or imposing tycoons. This sounds to be not much of a bother to the ordinary person. If this is the attitude, then it is time to change it. One must see finance in a different light and make things work in a different level. What Is Finance? Personal FinanceBy Terje Ellingsen
Personal finance is not an issue you should be forced to face when in a crisis like so many people end up doing. Your personal finances are vital for your life, security and prosperity. Face it and don't hide your financial issues under the rug. Learn and practice personal budgeting. Create your own financial destiny and your life will be so much better. You’ll have to: know your current personal financial situation estimate how your financial situation will develop in a short term perspective set long term financial goals, make a plan to achieve them and then execute your plan. Get a view of your current financial situation Collect accurate information about your personal financial situation. Calculate your your net worth, This information includes: |
