How Can Payments Increase If Current Mortgage Rates Sit At Historic Lows?
When most people consider a mortgage refinance, borrowers usually look for the lowest interest rates and monthly payments. And now that current mortgage rates are settling back down to historic lows, many have been looking to convert their ARMs into a lower fixed rate mortgage. But surprisingly, these mortgage refinances come at a time when conversions might actually result in higher monthly payments for some borrowers–and in a larger sense, this can actually be a very good thing. Interest-only home loans don’t build up equity, but they do allow borrowers a few flexibilities. Some individuals have a better use for the money than paying down the principal, while potential buyers often prefer these mortgages as they can buy more home with less money during the initial interest-only period. Unfortunately, one reality that also can’t be overlooked is the possibility that many homeowners simply couldn’t afford the fully amortized monthly payment. Popular Interest-Only Home Loans Of The Pas
