Interest only Loans - Home Buying process provided by Helene Cass and Team specializing in McDowell Mountain Ranch
RE/MAX Fine Properties
21000 N. Pima Road, Suite 100
Scottsdale, AZ 85255
(480) 563-3333
888 471 9500

Interest Only Loans:

The term "Interest Only" is a slight misnomer. During the life of the loan, your payments will be applied towards the interest accrued by the loan amount. The upside of this is that you will have a lower monthly payment and can usually take out a loan for a larger amount. The potential downside is that you are not paying off the principal of the loan and if the value of the home decreases, you are still responsible for the principal on the mortgage.

Hypothetical Home Cost: $400,000
Down payment: $80,000
Mortgage Amount: $320,000
Interest Only – 30 year fixed 7.375% = $1,966.67
Interest Only – 3/1 ARM 6.875%= $1,556.67

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