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
I think of it like paying to lock in the price. Say you find a property for $500k that you want to buy, but you cannot pay for it yet. For a relatively low monthly fee, you can lock that price at $500k and use the property as your own. As long as you keep paying that fee, the price stays $500k should you chose to pay for it later. In 5 years, every other place nearby costs $750k, but you can still buy it at the price you locked-in ($500k) if you want.
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