What's the advantage of a principal + interest mortage vs an interest only loan?
85038
There are only two advanages of a principal and interest only loan is "forced equity saving" as you are required to pay principal. The second advantage is that the interest rate is slightly lower - about .125% on a variable rate loan, and .25%-.375% on a fixed loan.\n\nOtherwise, the advantgages are all in favor of the interest only loan.  You can see an entire article and analysis of the interest only loan at http://gregorydwyer.blogspot.com
15075
Something you do not want!\n\nAjustable Rate Mortgage...this percentage interest on your mortgage will change based on a percentage over the goverment's T-Bill, which changes for inflation throughout the year. If interest rates are VERY high, say over 8-9%, you may wish to get a low Adjustable Rate with the idea that it will go down in the future and you can then refinance a fixed rate at that time...or...if you are making little money now and need a low payment but are certain that you will be able to afford a higher payment in the future. These often have maximums that they can go up per year, but eventually they are going to give you a much higher finance charge and interest paid over the length of the loan. \n\nA low fixed rate is preferable if you plan to make payments for the lenght of the 15 or 30 year loan and don't want to pay a lot of interest ;)
450550
The major difference is with one you get a car, and the other you get a house. Lol. Seriously though, the difference is interest rates and length of loans.
749562
Use a mortgage calculator because it's very hard to figure out compound interest manually - it's compounded every month, but also reduced by the amount you pay (assuming you make monthly payments) so you can't just multiply the principal ($4,327.77) by 10%\n\nIf you're not making monthly payments, then use an investment calculator.
144182
easy. loan proccesing fees. You pay the int. up front under a different name. Simular to points (another name for interest) on a Mortgage.
860805
the interest would be the same if you got the same interest rate, because the loan would be the same just divided. besides you would probably have to pay closing fees again, also new loan fees.\nif you want to pay your loan off faster increase your payment, most of the first 5 years of payment goes to interest, by increasing you payment by $5.00 a month you would pay off much faster. by paying  half you payment twice a month it would also pay off faster.\nI just noticed that you have an adjustable rate mortgage, historically mortgage companies raise the rates as fast as they are allowed to according to the contract, a fixed rate at a half percent more would be much safer, and you need to check to see if there is a prepayment penalty, that is pretty standard.
890447
Personally, I am cautious about interest only loans, because no progress is made on the principal.  A good neutral site I like is at http://www.refinance-and-loans.com/ and they have a section in their topics on interest only refinancing that may give you some good information.  You also could look in their state section for information about mortgages in your particular sate.
781709
For the sake of your cash flow go for the lowest possible monthly payment.  You can always pay more, but if you have a vacancy you might need the extra wiggle room made possible by a lower minimum payment.  A fixed rate would be better than an adjustable for this just because it makes you annual planning easier.  I used to own a couple of apartment buildings and know that being able to fix as many or your payments as possible can make life easier in a crunch.
853694
Yes, you can get a 100% mortgage, which means you are borrowing the total cost of your property, but you don't get such a good rate, which means you will pay back more in interest than you would have if you had a deposit.\n\nSome lenders will actually let you borrow more than 100% which is good for furnishings etc, but again, it will be an even worse rate of interest.\n\nIf you can save for a deposit it is definitely the most sensible option and will save you money in the long-run.\n\n(Based on information from UK - US may be different!)
208393
What is the interest rate?  and what is the principal amount?
47093
It depends on how long you plan on living in the house? If its 2 years or more I would purchase.\n\nThe interest is a deduction, you may have some appreciation and you will not have a pile of rent receipts.\n\nReal estate is all about timing & location.
400378
The owner provides the financing rather than a bank.  The benefit to the owner is that they get to keep all the accrued interest as well as title to the home until it is paid off.  The benefit to the buyer is they only have to convince the owner they are credit worthy- not a bank.
1073458
The amount of interest you pay on an Interest only will only slightly differ from the amount of interest you pay in a 30 year.  So your tax break won't be a substantial difference.  In this market, which is pretty unknown at the moment, not gaining equity in the house would be scary.  You possibly won't make any money in the long run.  \n\nTry looking into a 5 year fixed that switches to an adjustable.  The payments will be slightly lower than a 30 year as you can usually get a little lower rate.\n\nYour other option is getting the 7 year interest only and making additional payments to the principal.  Treat it as a 30 year, that way when you CAN make additional payments you can and when you can't, you don't HAVE to.\n\nThere usually isn't a balloon payment at the end of the interest only period, but your regular payments will be higher than normal because you'd have 7 years of principal you didn't pay to make up for and rolled into the payments.\n\n\nThere are a ton of sites that can give you an amortization schedule.  Run some numbers, such as the interest only rate and the 30 year, and also if you were to make additional principal payments to both.  You do have a lot of options and making your loan agent work for it is what they're there for.  \n\nPrepayment penalties, which usually accompany Interest only loans, (beyond paying off and/or selling) uaually only qualify if you pay more than 20% of your original loan amount in any 12 month period, so extra payments shouldn't affect it.  \n\nREMEMBER there are always other loan brokers out there if the one you're using isn't getting you what you want!  Shop around!\n\nGood luck!!  :)
293819
Obviously a condo or townhouse is easier to maintain, that's why you pay association fees, so the maintanance is done for you. \n\nWhether which is better to invest in depends on the location. In large residential areas, usually a house has more appreciation value.
566899
while you might have some equity in the home based on home appreciation, you will have paid NOTHING towards the principal of the loan.  Five years can be a long time, but if you're careful and work the plan well this plan might work for you.\n\nPersonally, I prefer the fixed rate 30 yr mortgage.  After 5 years in my home, I have paid a bit on the principal, plus have built some equity in the home.  But, that's for me.\n\nTo answer the question about the interest.  Well, that's what you paid to the lender to service you with this loan.  In essence, it's gone -- all 5 years of it.\n\nBear in mind that such interest may be deductible from your income when you file your IRS return.  That might be a good thing.\n\nPlease go talk with some other bankers, financial experts, and accountants, and ASK, ASK, ASK.  They are used to it.
968929
The shorter the interest term the faster it grows as the principal grows more quickly so you get more interest on your interest\n\nFor example lets look at the interest gained over 1 year on an interest rate of 12% per annum\n\nYearly: Well at the end of the year A = 1.12*P\nSo interest gained = 1.12*P - P = 0.12*P\n\nHalf Yearly: Well at the end of the year A = (1.06)*(1.06)*P (because the interest is applied each 6 months\n= (1.06)² * P\n= 1.1236*P\nSo interest gained = 1.1236*P - P = 0.1236*P > 0.12P\n\nQuarterly: Well at the end of the year A = (1.03)*(1.03)*(1.03)*(1.03)*P \n= (1.03)^4 * P\n≈ 1.1255P\nSo interest gained = 1.1255*P - P = 0.1255*P > 0.1236P\n\nMonthly: Well at the end of the year A = (1.01)*(1.01)* ... *(1.01)*(1.01)*P \n= (1.01)^12 * P\n≈ 1.1268P\nSo interest gained = 1.1268*P - P = 0.1268*P > 0.1255P\n\nDaily: Well at the end of the year A = (1.0003288)*(1.0003288)* ... *(1.0003288)*P \n= (1.0003288)^365 * P\n≈ 1.1275P\nSo interest gained = 1.1275*P - P = 0.1275*P > 0.1288P\n\nNow while it may not sound like much over 1 year over 20 years it can become significant\n\nJust quickly over 20 years\n\nYearly: Interest = ((1.12)^20 -1)*P = 8.6463*P\nHalf Yearly: Interest = ((1.06)^40 - 1)*P = 9.2857*P\nQuarterly: Interest = ((1.03)^80 - 1)*P = 9.6409*P\nMonthly: Interest = ((1.01)^240 - 1)*P = 9.8926*P\nDaily: Interest (using 365.25 days per year to account for leap years)= ((1.0003285)^365.25*20 - 1)*P = 10.0154*P
809731
Having the possibility, generally, it is better to pay cash and avoid repaying the interests of a mortgage...however, if you have just enough to buy the property, you might consider  paying 80% of the value of the house and getting a small loan. By doing so you would have some money saved for a rainy day...which you could put into an ISA and make up for the interest that you pay on the loan....