Question:

Is the 30 year fixed interest only mortgage loan a good option for you?

Answer:

The 30-year fixed interest only mortgage usually comes in three basic types - as 5, 10 and 15 years interest only option available for the borrower. A 30-year FRM will carry lower interest rate but the 30-year fixed rate IO mortgage translates into cash savings which could easily be used towards principal if you wish.

The 30-year IO loan is good option when the LTV is less than 100% so the borrower has some equity on the property. Also, instead of using up all the IO period without making any principal payments it is advisable that you make principal payments when you can afford it. This way you don't end up with more debt than you can satisfy with home sale, or simply build up equity if you really want to keep the house.

If you expect your income to grow in the future, or you want greater flexibility in your money management the 30-year fixed I-O mortgage may be a right choice. You are always advised, though, to consider some professional advice to minimize risks.

Investors use 30-year IO home loans to maximize cash flow.

 Interest Only loans are great tools for investors and financial savvy borrowers as they are familiar with the risks and benefits of those loans. It will be right to say that homebuyers using an Interest Only loan to get ‘more house' are taking a greater market risk than investors who usually have enough other liquid assets to offset a possible loss.

Recommended helpful present and future homeowners links:
Why: Refinance to a fixed rate loan while mortgage rates are still low.
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Common misspellings: mortage and morgage