Home Loans
Stretching Your Dollars When Getting A Mortgage
(presented by www.refinance-refinance.net - mortgage lenders)
By Ben Afzal
Basics
When you are considering buying a property you are limited by how much you can afford for a montly payment.
A typical monthly payment requires you to pay both the interest and principal. The idea is that you pay the loan down over time, typically for thirty years.
There are several new loan options available to help you get a lower monthly payments:
- interest only payments
- 40 year loans
- 50 year loans
- minimum payment options
Interest Only Loans
An interest only loan allows you to make a lower payment because you are not paying any of the principal of the loan down.
Your loan balance will remain the same for as long as you pay interest only. This type of option is available for up to 10 years, although some lenders have introduced loans that are interest only for 30 years.
This type of loan will lower your monthly payment because the payment term is stretched out more than the traditional 30 year loan.
50 Year Loans
This type of loan will lower your monthly payment because the payment term is stretched out more than the traditional 30 year loan.
Minimum Payment Options
A minimum payment option allows a borrower to pay a less than interest only payment. This may result in negative amortization.
This loan used to be offered only up to a 90% or 95% loan to value ratio, although now some lenders are offering this loan up to 100% of the value of the property.
