The mortgage interest loan “thing” has been popping up in my email inbox quite a bit lately. It took me a few minutes of comparing some notes when I finally realized what you were asking about was the no interest loans of days gone by.
As you all well know by now, one of the major causes of the recent and ongoing housing debacle was in part due to the notorious no interest loans.
Are they still available? Yes and no. Yes if you fit a very narrow profile that the banks are now lending to and no if you don’t.
Banks appear to be favoring these types of home loans to those who are not just a regular wage earner who is seeking out a moderate sized loan and who really doesn’t have any type of strategy for investing any of the savings.
These type of loans are those in which you only pay the interest part of the loan each month for a fixed term at which it is usually wise to sell the property or refinance the whole lot.
Since selling the home is extremely tough these days and refinancing can mean owing more on your home loan than it’s actually worth you may be faced with making skyrocketing payment once your fixed term expires.
So…mortgage interest loans? Stay clear for now unless you are an experienced investor with great credit and a nice stash of cash to hold you over if need be.
Get out the mortgage interest calculator and do a little shopping around if you are in the market. Find out what you can afford and start taking advantage of the current market. Buying something now can snag you a great home loan with good terms that will have potential for some tidy profits once the market turns…which shouldn’t be long.
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