Subscribe to Answers
Whatever works for them.
Stevens Point, WI
That is for others to decide.
Stevens Point, WI
We still have interest-only options, Winston. They're not as common as in the past, but we've still got em.
I think high LTV I/O loans are tricky, because even a slight market reversal can put people underwater and cause a major ripple effect (like we saw during the meltdown), but with some equity built into the home as a buffer, I/O loans are really great (and safe) options for a lot of folks.
Maybe in very rare cases, but there should be a whole lot of disclosure to prevent problems.
Honestly, it depends on the market that you are in. Here in Hawaii, I see them coming back. However, the product isn't being used to get low income buyers into elite income properties. The guidelines to qualify for the loan are sometimes more stringent than a 30-yr. It is really about the client's short and long term plans with the property and what the market is doing. Is it worth it to take an I/O loan for a few years in Honolulu to build $100K equity with the housing prices escalating? Absolutely? Somebody in Michigan doing the same? Doubt it.
I believe there is still that option with some lenders. Borrower knowledge of the product and the ability to repay as agreed is still paramount.
Many banks offer interest only loans and lines of credit.
It sounds good to me Winston.
Yes, as long as the buyer has acceptable credit, 6 months mortgage payments in reserve, employment is verified, and can put at least 10% down. But not sure why anyone would want interest only these days?
Nope, unless the buyer is capable of putting 20% down.
I have a seller right now that still has their interest only loan, and has to now sell because the payments will hike so high they cannot afford them. Think not. Maybe then homeowners won't be tempted.
Yes I do.
However the bank must be required to keep that loan in their portfolio.
Only if the clients are paying cash!
Yes but on a very limited basis
No, I don't think it is a wise choice.
I think those not qualified should wait til he have saved enough.
The mortgage interest rates are so low that there is little need for interest only loans.