What About Those “Interest Only” Loans?
The interest only loans are a relatively new creation of the lending industry. As the interest rates crept higher during the past two years and as housing prices jumped higher and higher lenders found the interest only loans to be a good alternative.
These loan programs qualify a buyer on just the “interest only” payments, so since no principal is being paid in the payment they are quite a bit lower. For instance, here is an example:
| $200,000 @ 6.5% | = $1,264.14 for 30 year fixed |
| = $ 1,083.33 for interest only |
