Why are interest only mortgages so bad?
I’m looking into different loan options and ran across the “interest-only” mortgages. I’m not sure if I’m understanding it or not. Anyone that can do a better job than the financial websites help!
I understand that you pay only interest for the first 10 years. Then after that you start paying on the principal. Correct? If this is the case why is it so risky? With a regular loan I’m going to have to pay both the principal and the interest at the same time. So what’s the difference if it’s split up?
My husband and I are looking to make a fairly big jump in houses. This of course means we need to acquirer a larger mortgage. We both have excellent credit and great paying skills. Example, if our mortgage is $ 600, I’ll pay $ 700 a month.