Refinancing Your House Mortgage - Get a Fixed Rate with an Interest Only Option

In the last five years, the rate of homeowners refinancing their
mortgages have skyrocketed. The lessening in interest rates have resulted in
respective homeowners locking in a low rate. In improver to refinancing for a
lower fixed rate, some homeowners have got chosen to refinance their home
using an interest only option. While making interest only payments is
tempting, these types of loans have got certain risks.

What are Interest Only Mortgage Loans?

Interest only mortgage loans are rather new. With these loans,
homeowners have got the option of paying only the loan interest for a specified
period. Most interest only loans have got a term of five years. However, it is
possible to obtain a seven or 10 twelvemonth interest only option. At the end
of the interest only period, the homeowner must get making payments
toward the principal and interest. When this occurs, the mortgage
payment will increase.

Interest only payments are good because your monthly mortgage
payment is considerably less. If you dwell in a high lodging market, an
interest lone mortgage may be your only manner to attain homeownership. However, these loans are very dangerous. Once you get paying on the
principal, you can anticipate your mortgage payment to leap $300 to $500. If you
are not able to manage a higher payment, you are at hazard of losing your
home.

Combining Fixed Rate and Interest Only Refinancing

Fortunately, there is a manner to enjoy the predictability of a fixed
rate, and the financial comfortableness of interest only payments. Obtaining a
refinance loan with a fixed rate-interest only combo is easy. Refinance
lenders offer respective loan options to ran into your needs.

With a fixed rate-interest only option, homeowners have got the security of
a fixed rate 15 or 30 twelvemonth mortgage. These include predictable payments
that volition stay the same. However, if a homeowner needs extra cash for
an unexpected expense, they can use their interest only option, and
pay a lesser mortgage amount for a peculiar month. Paying a lower mortgage payment when money is tight volition aid you
keep a good standing with your creditor, and will not damage your credit
rating.