Are Interest-Only Mortgages A Smart Strategy or Risky Business?
When exploring home financing options, many borrowers are intrigued by interest-only mortgages. These loans offer the benefit of lower initial monthly payments, which can seem attractive, especially in high-cost areas or when cash flow is tight. But how exactly do they work, and are they the right fit for your financial goals? What Is an Interest-Only Mortgage?An interest-only mortgage allows you to pay just the interest on your loan for a set period, typically 5 to 10 years. During this time, your payments do not reduce the loan’s principal balance. Once that period ends, you begin paying both principal and…