Minneapolis Real Estate Interest Only Loans

[IGotRealEstate]

Interest only loans have hit the minneapolis real estate market like crazy.. Has as anyone seen this happend in there market

[Hawaii Mortgage Guy]

Yes, especially with people who are buying a short term investment, usually seven years or less. They are figuring to realize a greater increase in equity through continuing upward market appreciation than they can build up through their principal payments, so why not keep the principal portion of the payment instead of giving it to the lender?

Makes sense if the home is not going to be the one they want to own free and clear someday.

[jseamless]

Most folks or only in there home for five to seven years before they refinance or sell there home. Keeping that in mind there or some great ARM products out there.

Such as interest only ARM products which start at 3.25. On a 300K purchase with 5% down your note would only be a little over $800. This total mortgage amount would be tax deductible, since you are paying no principal.

For the same house a 30yr fixed would be around: $1,778.03 6.375%

There is a $900 dollar savings you could place towards building equity or if you or wise you will put that money into an investment which would earn you 10%.

That would be a savings of almost $12,000K a year. Over five years almost $60,000 in savings.

Also very popular is the 7/1. You may be able to get this one down in the fours if you have perfect credit...

This is just something to think about.

Some interesting reading from a best selling author...

Get a big 30yr mortgage and never pay it off...