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Personal finance observation, musing and decisions in a journey toward financial independence by 36 with at least $1 million.

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30-Year Interest Only Fixed Rate Mortgage





Woo ... what an innovation. It is not without merits. After all, who will on earth stay in the same house for 30 years and keep paying the mortgage? Sooner or later, the homeowner will either move or refinance, so if a mortgage company can make this 30-year interest-free balloon offering attractive enough, enough people will try it.

From EZine:

Basics 30 year fixed loans are the standard loan that has been available for many years. A recent innovation has been to add an interest-only payment period to part of the loan.

Until recently the maximum interest only period was ten years. A new loan has been introduced that allows a borrower to make an interest only payment for 30 years.

A thirty year fixed loan with an interest only payment can be used for:

- purchases
- refinances

Purchases Getting a 30 year fixed loan is a decision many first time home buyers make.

A 30 year fixed loan has the advantage of an interest rate that remains unchanged for all thirty years of the loan. This allows the borrower to have stability in their monthly payment. They don’t have to worry about rising interest rates.

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