If you’re trying to get into your dream home, there might come a point where you have to look through solutions that others wouldn’t. This is where the interest only mortgage comes into play. While there are some cautions to be had with this type of mortgage, the truth is that life is full of risks. The risks we take can open up a whole new world of reward that we weren’t really thinking about.
Interest only mortgages are exactly what they sound like: a mortgage where you’re just paying the interest. Keep in mind that this doesn’t attack the principal at all. So you will still need to pay down the mortgage later on. Interest only mortgages have their place. They can help you get into the house that you want, and then you can remortgage.
However, in order to pull this off you have to make sure that you will be able to have stable income. If you’re worried about your job, an interest only mortgage just isn’t for you at all. In addition, if you’re concerned about your credit, then this is just another reason not to pursue these mortgages.
The trouble with the media is that once they realize something has a problem, they assume that it’s going to be problematic for everyone. That’s just not the case at all. Why put yourself in a position that’s not a good? You know your limits.
If you know that you’re a strong candidate for repayment, then you should definitely pursue the interest only mortgage. It can give you the cash flow you need to invest into the home, therefore raising the equity faster than if you were to just use a conventional mortgage. Interest only mortgages tend to be easier to qualify for on the whole.
You have to think about what’s going to be best for your family. If you find that it’s cheaper to buy than rent in your area, then you may want to pursue this as well. You need to also sit down with a qualified adviser that can give you better numbers that are much more specific to your situation. Like most of our guides, this is just general advice that cannot substitute for professional information.