can someone explain an interest only home loan to me?
477046
An interest only Home Loan is just that. You borrow a sum of money over a term, say twenty five years, pay interest only until the twenty five years is up and then pay the sum borrowed off. There are basically three ways y=to pay it off:-\n\n1  Take out an endowment life assurance policy that pays the loan off if you die. If you don't the premiums are invested to give a lump sum after 25 years.\n\n2  Pay it from savings\n\n3   Sell the house and keep the equity.\n\nThe problems with this type of loan is that any policy you take out may not provide enough to repay the loan. many policies have failed to do this and left hopeful purchasers with a debt at the end of the term.\n\nYou may not have saved enough.\n\nYou may not wish to sell your house.\n\nThe best way is to take out a Repayment Mortgage since that way you can be sure the mortgage will be gone and the house yours in 25 years.\n\nInterest only loans are only recommended in certain circumstances. i.e. You are selling the house in a few years time. You have funds coming in that will repay the loan and you want to keep your costs down. Otherwise go for repayment.
297219
There are many forms of interest in a property.  Common form is Fee Simple which basically means you own all of it and its belongings.\n\nLeasehold interest means that the land that your condo sits on is on a land lease.  Land lease generally runs for 100 years.  However, the important thing to remember is that you DO NOT own the land.\n\nThe messed up part is that whoever owns the land might not renew the lease either.\n\nUsually, the lenders will not even lend on a property if there is only 14 years left.  If you think about it, the loan is generally for 30 years, but you might not have the property after 14 years.\n\nYou should try to steer clear of this especially with such a short amount of time left.
648324
if u live in california i can do the work for you. does your friend currently have a second on his house? if he does refinance depending on how much equity over the house you have u can join both loans into one and at the same time add in the $5-10 k you owe(u would get a check or cash if ud like at the signing). if he only has one loan on his house he can open up a second for the total equity you have available. im pretty sure they wont do a $5-10k loan but wat will happen is that u open a second for the total equity available to u and u just use what you need that come with really low interest rate
629399
u can't do nething bout the interest that the bank charges on the govt. loans. I feel u shud be much more specific in what ur askin.
431671
Basically your bank will loan you money based on the value of your property. There are loan ratios so lets say they have a 10% ratio (I think thats normal although others demand more or less depending on the area). That would mean you can borrow up to 90% of the value of the house. If the house is 100K you could borrow 90K. Now if you only owe 50K because you bought it a a few years back and it has gone up in value then your bank will lend you up to the 90K (or an extra 40K) for you to do whatever you want with. Its a cheap way to finance debt for purchasing things like cars, holidays, extensions...than using a credit card or personal loan BUT it means you are putting those things under your home loan and if you dont or cant pay then they reposses your home. You would start by going to your bank and having the home valued by a professional they recognise to see how much you could borrow. A good bank will pay for this service for you as long as you take out a loan with them. You generally set up a new loan (which means a new fee) and then your back to normal. Your home loan repayments will go up but they should be able to calculate these for you so you know what to expect. Remember interest rates are on the rise so factor that in. Happy spending.
593907
Mahit Madaan is giving you part of the truth.  More of the truth is that a Home Equity loan is a 2nd mortgage at a higher sometimes much higher interest rate.  This will depend on your credit and credit score of course.  You will end up with TWO mortgage payments, one at a lower rate and one at a higher rate.  The qualifications for a 2nd mortgage are a bit more steep because with a 2nd mortgage, you become a higher risk.  Many times two mortgage payments may stress your monthly finances in ways that you may not notice until after you close.  Conversely, if you refinance your first mortgage, you will only have ONE mortgage payment.  Obviously, the rate will be slightly higher than what you have at the moment, but you will avoid the sometimes MUCH higher interest rate on the 2nd mortgage, and instead of amortizing the 2nd mortgage for the usual 15 year period, the entire mortgage can be amortized over 30 years or 40 years, thus lowering the monthly payment.  I am telling you this because I have refinanced many, many customers who wanted and needed to consolidate 1st and 2nd mortgages to lower their monthly mortgage payments.  If you want to discuss this further, by all means, please contact me at wwi_2@yahoo.com
545504
Ok, a second mortgage is when you still are making your original pmt., but you take out what is called equity that is built up in your home. Say you bought your house for 100,000, and now it is worth 200,000. Now, most banks use the 80% rule. You take the 200,000 and subtract what you owe still on the house- say you owe 85,000. So, you have 115,000. Now, what is 80% of that? 92,000. So, you could get an equity loan (or a line of credit) up to 92,000. Now, say you borrow that, you will owe money on that. Technically, banks call it an equity payment, but a lot of people call it a second mortgage, because it is a loan against your home. A line of credit is a bit different in that say you get the line of credit for 92,000, but you only use a few thousand here and there. You only pay what you use. Say you pay it off, and then a month later, decide to use it for a vacation, then you would owe again.
136143
Ask your morgtage guy about a bridge loan.  It is a loan to cover you when you have to pay two mortgages for a short time.
287262
I would not take an interest only mortgage unless I did not plan to be in the house less than a year. Anything beyond a year is wasted money and you are still left with the principal to pay. I currently am enrolled in a program that automatically deducts my house payment each week from my bank account. It costs only $9.00 a month but it takes care of my land taxes, insurance and house payment all in one. At the end of the year I have paid one extra payment and it applies that toward the principal on my mortgage. It decreases a 30 year loan by 11 years. Hope this helps!
1168622
It sounds like you're alluding to an equity sharing mortgage.  I've seen municipal agencies offer loans like these, they didn't appear on title (just as beneficiary of a trust deed).  Also, generally they need to wait for you to sell or refinance the property to get their cut of equity.  Wouldn't it suck if the lender all the sudden said, "OK, give me my equity!" and you had to come up with a couple hundred thousand dollars!
288069
That's why whenever you apply for a home equity loan....they don't really tell you.  They alway say consult your tax advisor.\n\nTechnically it's not legal, but it's in a "gray" area of the law.  \n\nI know of tons of people who have taken the interest off their taxes and haven't been challenged.  I would not worry about it.
560434
They are telling you that the 8% interest on the amount financed by the bank is $600.  They are telling you what the simple interest is on the amount financed for the first month.\n\nInterest = Principle*Rate.  Assuming that the 8% interest is an annual rate, what would that be for one month?  8%/12 = 2/3% or .00666666.\n\n$600 = Principle * 2/300.  So, the amount borrowed or the principle was 600*300/2 = 90000 dollars.\n\nIf they borrowed 90000 dollars and it was 90% of the purchase price 90000 = 90%*Purchase price, that means it was a 100,000 dollar house to begin with.\n\nWe can do it backwards to check.  Start with 100,000 dollar house.  Now, make a 10% down payment and finance the rest, 90,000.\n\nThe first months payment on the interest would be 1/12 or the 8% on 90,000 or 1/12*.08*90000 = 600.  Yep, it was a 100k house.
249847
With as high a FICA as you have, the slam-dunk answer is a home equity loan.\n\nThe loan I have allows me to even write checks (just like charging) to the account, up to the amount of my escrow balance.  In the event of an emergency, you will have a fast, easy way to get a low-interest loan, plus the advantage of being able to write off the interest.\n\nBut let me give this warning!!!!  You MUST get control of your credit spending.\n\nOver the past few years, thousands of people fell for the lure of low-cost refinancing and home equity loans, roll-over credit cards, and consolidation loans.  They wanted to pay off their credit cards and have only one payment.  \n\nThen they went and ran up their now-empty credit cards all over again.  Before you know it, they can only afford the minimum payments, and it's gonna take 10 years to get them paid off.  They end up filing for bankruptcy.  \n\nYou are gambling your home here!  You better be real sure you can control your spending before taking this step!
251102
Try going to a realtor and asking about places that can help you with a low interest loan for your home. They often know of programs that you could be eligible for. <*)))><
990834
It's called a bridge loan.  Most lenders can help you.  The risk is obvious if your current house doesn't sell in a timely manner at a price close to what you expect
922075
It's a loan where you can pay off all your other debts, (credit cards, auto loan etc.) And just have the one loan and one interest rate instead of many.
1033389
Here we go...\n\nThe thought of adding to the principle, reducing your loan term was a thought that originally spawned from the time of the great depression. At that time, banks (mainly local) had the ability to recall notes at any time they felt, whether you where in default or not. Sooooo, what they did when they needed money was started to take back the money they had lended out to borrowers by way of recalling the notes to properties. Leaving many Americans in the streets. This spawned hysteria in the American Psyche.\n\nThe thought of "Mortgage = bad" has been etched in our heads from the passing down of generations ever since. From this, I can tell you it's not logical thinking... WHY???\n\nYou see, lets say you take out $100k from the equity in your home and put it in a long term CD earning you 8% (very easy in todays market) and it compounds annually. However you have a loan on the property (interest only) at 6%, the intitial thought is you are going to yeild 2% on your money in a positive. NOT TRUE! you are going to yeild much more than that because the money in the CD is compounded on an annual basis and the interest paid on your home is simple interest. So, in essence you are going to reap the tax benefit of having a mortgage and you are going to be compounding the interest in the long term CD every year...\n\nEx:\n\n100k x .08 = 8,000.00\n108k x .08 = 8,640.00\n116,640.00 x .08 = 9,347.20\n125,987.20 x .08 = 10,078.98\n136066.18\n\nYou see wher I'm going with this. After only 4yrs you have made 36,066.18 yet you have paid 24,000.00 in interest to you existing 100k mortgage! Multiply the 24k in interest on your mortgage by 35% (general tax break offered for middle class on interest to a home) and you have really only spent 15,600.00 to make 36066.18.\n\nThis is the first four years. Keep compounding the interes for 20yrs and you will be 100's of thousands of dollars ahead.\n\nIt's called hedging, it's what the wealthy have been doing for years and years, using other peoples money to make them more money. It's the main reason why the rich get richer and the middle class never accel past middle class.