Naples Interest only mortgages
Naples Interest only mortgages
For many high-end executives and retirees who have a great deal of savings, Naples interest only mortgages may be a great solution to purchasing a home without draining your savings. The benefits of Naples interest only loans are substantial and can benefit borrowers who meet specific criteria.
How interest only loans work
When a borrower agrees to an interest only home mortgage, the interest rate is normally fixed for a term limit ( 5yr) then adjusts annually. This means that the payment is always tied to the amount of the principal of the loan. The lower your principal, the lower your payment. For example, a mortgage of $400,000 with a fixed interest rate of 6 percent would result in a monthly payment of $2,398. Interest only payment would be $2,000 monthly. In most cases, the borrower will not face a prepayment penalty when they pay down any principal amounts to reduce their monthly payments.
Who benefits from interest only mortgages
Interest only mortgages are typically ideal for those borrowers who earn annual bonus payments in addition to their salary. While a typical “hourly employee” may not see much benefit, an executive who receives a substantial annual bonus can use their bonus to pay down their principal balance. This payment then reduces the monthly payment. In addition, there are tax benefits to having interest only mortgages since most borrowers can write off their interest payments on their tax returns.
If you are going to pay off your mortgage in a short time because your home up north will be sold soon, this is a also an option to review.
For many borrowers, an interest only mortgage can mean they qualify for a more expensive home. This is generally because they are not paying down the principal while they are paying interest and taxes. It is important to understand that
If you are seeking to purchase a home in Naples, Florida, we have Naples loan mortgage specialists standing by to take your call 24 hours 7 days a week.
Please do not hesitate to call us NOW at (855) 554-CORE or (239) 431-5889
Apply for a Naples interest only mortgage or call (855) 554-CORE. Alternatively, since our main office is here in Naples you can come in to see us.
Helpful Terms Defined:
Mortgage: Collectively, the security instrument, the note, the title evidence, and all other documents and papers that evidence the debt. A Mortgage is a loan secured by a lien on real estate held in fee simple or on an acceptable leasehold estate. A loan made for the purpose of purchasing, building or rehabilitating real property, and secured by that property. A pledge of real property as collateral for payment of debt. The term is also used to describe both the mortgage (security instrument) and the promissory note evidencing the debt, which includes the terms of the debt’s repayment.
Note: The evidence of indebtedness for a mortgage loan. A note is the instrument evidencing the indebtedness secured by a security instrument that sets forth the amount the owner owes the lender and the manner in which the debt is to be satisfied. The note establishes the payment terms, conditions under which prepayments may be made, and the lenders rights in the event of default. A written agreement between the mortgagor and the mortgagee specifying the amount and terms of repayment for a loan.
Disclaimer: Our rate and payment option in this article is for informational purposes only. This is not current mortgage market rates and is only for informational purposes. 6% APR for the example above. Please call our office for a customized proposal about Naples mortgages. NMLS #849597