| An interest-only mortgage is a home loan, where your | | | | of income. You will then be able to meet your minimum |
| monthly payments go towards the interest on the loan | | | | monthly payments with your salary, and then be able |
| and not towards the principle. However, on an | | | | to put your commissions or bonus monies into an |
| interest-only loan, you are expected to make | | | | investment vehicle, such as stocks or a small business. |
| payments towards the principle, the only difference | | | | By the time the loan matures, your investments will be |
| between that and other home loans are when. If you | | | | able to pay on the principle of the loan. |
| choose a 100% home mortgage, then you most likely | | | | * Interest-only home mortgage financing is beneficial to |
| will not be required to make monthly payments on the | | | | you if you are a regular investor. |
| principle, until 10 years after the inception of the loan. | | | | * Since, the monthly payments on a 100% home |
| The whole idea behind 100% home mortgages is that | | | | mortgage are low; this allows you to obtain a bigger |
| the home owner will start off by paying the interest on | | | | loan in order for you to purchase your dream house. |
| the loan, which will then free up more money for the | | | | Cons |
| person to invest. The investments, over time will have | | | | * If your property declines, then you could endure |
| earned more money that can then be applied to pay | | | | financial hardships. |
| off the remaining principle on the mortgage. | | | | * 100% home mortgage is not a prudent choice if |
| The following are a list of pros and cons to this | | | | someone is not a disciplined investor. |
| particular home mortgage. | | | | * If you have an adjustable rate mortgage (ARM), then |
| Pros | | | | there is the risk that the interest rates may increase. |
| * 100% home mortgages are good for someone with | | | | * When choosing an interest-only home mortgage, if |
| a negative credit history; because it can give you a | | | | your income falls then you may have trouble putting |
| lower interest rate and help you build your credit. | | | | money towards your savings for your principle part of |
| * Interest-only home loans can be helpful if you depend | | | | the loan. |
| upon commissions or bonuses as your primary form | | | | |