Interest-Only Home Loan: Why Homebuyers Like Them
In 2022, the conventional mortgage still exists. As home prices in Australia continue increasing, it’s more difficult for homebuyers to qualify for it. Lenders started modifying the conventional mortgage in 2009. They developed alternative home loans such as the interest-only.
The interest-only home loan keeps repayments low for the first five to 10 years. Once this period expires, homeowners must practice solid personal finance skills. If they speak with their lender, it’s possible to obtain a new mortgage. Ideally, the homeowner’s financial circumstances improve after paying the lower repayment amount for five to 10 years. Although the property will not accrue significant home equity, the homeowner can prove that they can repay their debt.
Mortgage House takes several factors into account when helping home buyers become homeowners. Our loan specialists understand the importance of getting your foot into the door. Interest-only mortgages can lower the repayment by $500 in some cases. Homeowners who leverage that savings and reinvest it into their finances can improve their financial position.
Our loan specialists also outline the important details of this mortgage. Homebuyers must read the fine print of their mortgage contracts. An interest-only home loan does carry some risk. Remaining diligent can reap the best the loan has to offer.
Interest-Only Home Loan Conclusion
An interest-only home loan helps a homebuyer become a homeowner. Once the interest-only period expires, it’s possible to refinance a home loan or pick up a new one. Our Mortgage House loan specialists help homeowners explore their options. Contact our team today.