Real Estate and Mortgage Glossary

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Interest Only Programs:
  • Fixed monthly payments
  • 30 Year fixed mortgage with a 10 year interest only payment option
  • Full documentation or Stated income documentation
  • Protected if rates go up

Interest only loans are safe conventional mortgages. They are not to be confused with an Adjustable Rate Mortgage. The interest rate is fixed for the entire life of the loan. The advantage to obtaining an Interest Only Mortgage is the ability to make a lower payment for the initial term of either 5 or 10 years.

This program is excellent for first time home buyers or individuals that anticipate making a higher income within 10 years of receiving their home mortgage. While in an interest only loan the borrower can still choose to make a full principal and interest payment as well.

Depending on the loan amount the interest only payment can be several hundreds to several thousands of dollars cheaper per month than a fully amortizing or principal/interest payment.