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Interest-only home loans are popular, and LoanPage.com reminds borrowers that they need to understand how the loans can be helpful or harmful. Helpful online tools on LoanPage.com calculate how much money homeowners could save each month with an interest-only home loan.
(PRWEB) July 17, 2007 -- In today's tight housing market, LoanPage.com reminds borrowers that they should know the pros and cons of interest-only loans and do their research. LoanPage.com, a complete source of mortgage loan tools and lenders, offers an interest-only loan calculator to help visitors make informed decisions (http://www.loanpage.com/interest-only-calculator.asp).
The pros and cons of interest-only loans can be confusing. "Interest-only loans were developed for high-income people who wanted to manage their cash flow," says the Washington Post. Banknote.com adds, "Financial advisers don't recommend interest-only mortgages to regular wage earners who take out moderate-size home loans and don't have a strategy for investing the savings."
LoanPage.com recommends that borrowers educate themselves and be aware. Borrowers taking bad risks with interest-only home loans are fueling the current increase in foreclosures. An interest-only loan rate will be higher than an amortized rate because the risk to the lender is greater. In addition, the loan may be attached to an adjustable rate mortgage (ARM), which means that the interest-only loan rate will rise along with the mortgage rate.
Further, LoanPage.com suggests that an interest-only home loan may be a good fit for borrowers who are certain that they can turn a house around quickly or whose income is going to increase dramatically in the next few years. However, they should only consider this type of loan if they won't be forced into foreclosure if the house doesn't sell or the expected higher income doesn't materialize. Borrowers considering an interest-only home loan can use LoanPage.com's interest-only loan calculator (http://www.loanpage.com/interest-only-calculator.asp).
According to MSN Money, interest-only home loans are worthwhile when borrowers are disciplined enough to:
- Make substantial payments to principle even when they aren't obligated to.
- Wisely invest what they save in monthly payments.
- Use the savings to help pay down other debt.
LoanPage.com is a complete source of mortgage loan tools and resources, including calculators and a mortgage glossary. Visitors can find answers to the most common loan questions, download a loan application or find lenders in their area.
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