Interest Only

Interest only loan programs provide the same features as fixed and variable rate programs, and they additionally offer a lower payment option. With an interest only loan payment option, you pay only the interest portion of the payment but no principal.

Loan Program	Advantages	Disadvantages
Interest Only Programs	Several payment options Lower monthly payments Qualify for a higher loan amount Qualify at the interest only payment Option to pay the full principal and interest payment Interest only payments for up to ten years	Higher rates Principal loan balance will not decrease during the interest only payment period Payment will be higher for the remaining term

An interest only loan can be more expensive compared to a fully amortized loan. Many lenders add a fee of one-quarter point for the interest only option.

Interest only payment options allow you to qualify at the starting interest only payment. This gives you more buying power and a lower monthly payment compared to an amortized loan.

You pay interest based on your principal balance. On an interest only loan, your principal balance does not decrease, therefore, you pay more interest with this option.

Preferred Home Loans - 11314 4th Avenue West, Ste#111 - Everett, WA 98204
Office Phone: (425) 355-4663 Fax: (425) 355-4600 Cell Phone: (425) 870-4663

:: Apply Now :: Pre-Qualify :: Loan Programs :: Purchasing :: Refinance :: Request Loan Status :: Calculators :: Loan Process :: Library :: FAQ :: Glossary :: Forms :: Contact Us :: Staff Directory :: About Us :: Tell-A-Friend :: Home ::

Real Estate Broker #00201485 – California Department of Real Estate;
Licensed by the Department of Corporations under the California Residential Mortgage Lending Act. Licensed to do business in Washington and California.

NAMB - National Association of Mortgage Brokers