Are Interest-Only Loans Still Around?
Are Interest-Only Loans Still Around?
Are Interest-Only Loans Still Around?There are a few places you may still be able to get an interest-only loan Middletown, despite Fannie and Freddie's withdrawal from the market. Foremost among these are portfolio lenders who lend out their own money and don't sell the loans to Fannie or Freddie in the first place. Many of these are also the lenders who underwrite jumbo loans (loans above Fannie and Freddie's $730,000 maximum), so you may still be able to obtain one there.
Savings and Loan associations also tend to loan their own money and not resell their mortgages, so they may be an option for someone looking for an interest-only loan Middletown. Be aware, though, that you're going to pay a hefty interest rate and down payment in order to qualify, as well as being able to demonstrate ample fiscal reserves. That way, if the property does lose value, the lender is covered against likely losses.
ARMs as an alternative
One option remains for borrowers seeking to minimize their mortgage payments and that's an adjustable rate mortgage Middletown (ARM). Although these do involve paying down principal, they are available at considerably lower rates than a 30-year fixed-rate mortgage possibly three-quarters to a full percent lower. With low rates that lock in for one to 10 years before resetting, these can be a good option for borrowers who don't plan to occupy a home long-term.
Interest-only loans are a traditional mortgage tool and will likely make a gradual comeback as the housing market stabilizes and conditions return to historical norms. But in the meantime, options for very low-cost loans are limited unless you're in a position to take advantage of specialty lenders.