Posts

When Interest-Only Loans Are A Good Idea

INTEREST-ONLY “STIGMA” An “interest-only mortgage,” as the name implies, is a loan where the payments include only accrued interest – and no principal paydowns or amortization. Such loans had an enormous stigma for years because interest-only (I/O) loans were far more common prior to the 2008 meltdown and because so many of the loans ended […]Read More

Alternative Financing Options: Interest Only; Rental Income Only; Asset Depletion; Bank Statements

“ALT A” LOANS In the 1990s, a lender called Headlands Mortgage pioneered what were then called “Alt A” mortgages. The loans allowed borrowers to qualify for competitive mortgages without having to go through the rigmarole of a “full documentation” qualification. In that high-rate era, “Alt A” interest rates were very close to the rates associated […]Read More

Fed Speaks – Rates Up; Paying Off Student Loans With Mortgage; Interest-Only Loans

Fed Chair Powell spoke yesterday and sent the bond market into a tizzy, as investors sold off their bonds and pushed rates sharply higher. What crazy thing did Powell have the audacity to say? He acknowledged that the economy is strengthening and that there is an uptick in inflation. In addition, a statement by the […]Read More

Interest Only Loans Vs. Fully Amortized Loans

Borrowers often ask for “Interest Only” (IO) loans because they want lower mortgage payments, and we discourage them for a variety of reasons. I am discussing the pros and cons today. REASONS TO WANT AN IO LOAN: Payment Flexibility: Borrowers with cyclical income want lower payments during slower times (assuming payments really are lower – […]Read More