Interest only loans allow California home buyers a means to qualify for higher loan amounts and reduce their monthly payments.
Interest only loans are mortgage loans in which a home buyer or homeowner is only required to pay the interest only each month of the mortgage term. This is on contrast to a fully amortized loan in which the borrower is required to pay a fixed loan amount of interest and principal each month. By requiring the borrower to only pay the interest each month, the homeowner or home buyer may drastically reduce their monthly payments and it will enable them to qualify for a higher loan amount.
An extra added bonus to the interest only loan is the fact that the borrower is also able to make additional payments toward the principal amount of the loan. The amount may be limited somewhat in the beginning of the loan term, but this option may be beneficial in that it is possible to put more money directly toward the principal (while still keeping payments lower than a fully amortized loan.
A LoanBiz, Inc. loan consultant will be able to assist you in determining what type of interest only loan may work best for you and your family.