From what I understand about mortgages, which isn’t a lot at all, I just don’t see any scenario where an interest only mortgage is a good idea.
You pay it off for let’s say 20 years and you still have the full balance remaining. What am I missing?
In: Economics
You can always contribute more than the interest payment to pay down your principal each month. Any extra dollar you pay goes to the principal. I think that’s fairly normal. But if things ever get tight or if you lose your job or something, you’ll only have to worry about paying the interest until you restabilize.
Often people in jobs like sales will take an interest only loan because their income can vary so much month to month. When they have a great month they’ll put a lot down toward the principal.
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