Interest Only Mortgages and Young Professional
Here is one of the winning candidates for the interest only mortgage. The young professional that is excited to get out into the home ownership market. He or she is equipped with several level of mortgage product comprehension, and a guarantee of growing income.
Today’s mortgage market has seen a tremendous increase in mortgage packages, variety and borrowing levels. The interest only mortgage option, once thought to have gone the way of the Edsel automobile, is back at the moment and in use by the masses; in fact the mortgage market has seen an increase in the interest only mortgages from just a simple sliver of the market a few years ago, to around 23% of the market share currently. That’s huge growth, especially in the mortgage industry in less than 5 years.
Who will benefit most from this kind of mortgage loan product? What type of consumer is it that would desire an interest only mortgage? Well, you will get several answers, but only one or two will be correct. The really smart and savvy borrower, with clearly recognized goals and objectives that include the interest only option, the young couple that are moving up the corporate ladder and won’t be in the area over three years, and then there’s the most often sited consumer: This consumer is buying a home with a somewhat limited budget and wants as much home as they can possibly buy. They normally fit into the category of the couple with children, who need room and who plan to be homeowners at that location for a while. The other particularly winning candidate for these types of loans are the young real estate investors, who are profit creators, and won’t keep the property long enough to justify making a large capital investment.
As you observe the young professional, his or her situation is conducive to minimal investment requirement. He or she won’t be in this job position or this home over 5 years, and the most likely, the company is willing to include a buy back clause in the employment contract; how can you lose? All the right parts are in place for this to be a great marriage of needs and wants being satisfied with one parcel. In cases such as this, the interest only mortgage option is a great route to take.
What about the young couple with the growing family? Are they the correct candidates for such a purchase? Mostly, the answer would be yes. They’re budgets are limited, for the present, and their family is outgrowing the present home. Especially if one of the spouses holds a professional degree, they should have no problem growing into a larger mortgage payment within a few years. The interest only option gives individuals 3 to 5 years to get an income increase, then the principal and interest payment level kicks in, but their income will then support a higher payment.
The real estate investors, commercial developers, land brokers, and any other investor that works within this realm of business, is a potentially winning candidate for the interest only option. This person, or business group, doesn’t intend to keep the property long enough for there to be a need for capital investment. They need the capital free to create the changes, required planned construction, or to advertise the property for sale.
These are the potentially successfully and advantageous relationships that exist with the interest only option. Are these the only individuals who secure interest only mortgages? Definitely not. In spite of of the pros or cons to the interest only mortgage, and regardless of the original intent, many of the consumers securing these interest only mortgages are doing so in order to lower monthly payments, to buy more house for less money, and even to divert income to tax-deferred savings. Some will be victorious some will simply wind up paying on their home for most of their life.
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Disclaimer:
The general information provided by http://MortgagePalace.blogspot.com is intended as an educational purpose only, and should not be interpreted as legal advice. The law varies drastically by location and legal specialty, and http://MortgagePalace.blogspot.com makes no promises about the accuracy or completeness of the information provided. You should not rely on our information when making legal decisions. We recommend that you consult with a lawyer to get professional legal advice on how best to deal with your situation.
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** Attn Ezine editors / Site owners **
Feel free to reprint this article in its entirety in your ezine, blog, autoresponder, or on your site so long as you put a link back to this original post, leave all links in place, and do not modify the content in anyway.
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Today’s mortgage market has seen a tremendous increase in mortgage packages, variety and borrowing levels. The interest only mortgage option, once thought to have gone the way of the Edsel automobile, is back at the moment and in use by the masses; in fact the mortgage market has seen an increase in the interest only mortgages from just a simple sliver of the market a few years ago, to around 23% of the market share currently. That’s huge growth, especially in the mortgage industry in less than 5 years.
Who will benefit most from this kind of mortgage loan product? What type of consumer is it that would desire an interest only mortgage? Well, you will get several answers, but only one or two will be correct. The really smart and savvy borrower, with clearly recognized goals and objectives that include the interest only option, the young couple that are moving up the corporate ladder and won’t be in the area over three years, and then there’s the most often sited consumer: This consumer is buying a home with a somewhat limited budget and wants as much home as they can possibly buy. They normally fit into the category of the couple with children, who need room and who plan to be homeowners at that location for a while. The other particularly winning candidate for these types of loans are the young real estate investors, who are profit creators, and won’t keep the property long enough to justify making a large capital investment.
As you observe the young professional, his or her situation is conducive to minimal investment requirement. He or she won’t be in this job position or this home over 5 years, and the most likely, the company is willing to include a buy back clause in the employment contract; how can you lose? All the right parts are in place for this to be a great marriage of needs and wants being satisfied with one parcel. In cases such as this, the interest only mortgage option is a great route to take.
What about the young couple with the growing family? Are they the correct candidates for such a purchase? Mostly, the answer would be yes. They’re budgets are limited, for the present, and their family is outgrowing the present home. Especially if one of the spouses holds a professional degree, they should have no problem growing into a larger mortgage payment within a few years. The interest only option gives individuals 3 to 5 years to get an income increase, then the principal and interest payment level kicks in, but their income will then support a higher payment.
The real estate investors, commercial developers, land brokers, and any other investor that works within this realm of business, is a potentially winning candidate for the interest only option. This person, or business group, doesn’t intend to keep the property long enough for there to be a need for capital investment. They need the capital free to create the changes, required planned construction, or to advertise the property for sale.
These are the potentially successfully and advantageous relationships that exist with the interest only option. Are these the only individuals who secure interest only mortgages? Definitely not. In spite of of the pros or cons to the interest only mortgage, and regardless of the original intent, many of the consumers securing these interest only mortgages are doing so in order to lower monthly payments, to buy more house for less money, and even to divert income to tax-deferred savings. Some will be victorious some will simply wind up paying on their home for most of their life.
-=-=-==-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-
Disclaimer:
The general information provided by http://MortgagePalace.blogspot.com is intended as an educational purpose only, and should not be interpreted as legal advice. The law varies drastically by location and legal specialty, and http://MortgagePalace.blogspot.com makes no promises about the accuracy or completeness of the information provided. You should not rely on our information when making legal decisions. We recommend that you consult with a lawyer to get professional legal advice on how best to deal with your situation.
-=-=-==-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-
** Attn Ezine editors / Site owners **
Feel free to reprint this article in its entirety in your ezine, blog, autoresponder, or on your site so long as you put a link back to this original post, leave all links in place, and do not modify the content in anyway.
-=-=-==-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-
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