What is Interest Only Financing?
Interest Only Financing is a finance option where the borrower only pays the interest on the mortgage through their monthly payments for a specified period of time.
Advantages of Interest Only Financing:
Disadvantages of Interest Only Financing:
The biggest disadvantage to Interest only financing is that the payments are not deductible. You can't write off these payments= no decrease in tax liability.
Sum this up!
Get a mortgage you can afford and avoid the interest only payments unless you are an investor and can afford to take the risk. I actually recommend buying a house that you will need to fix up, this way you get the house on less and you can make the improvements and renovations overtime. You may need to work on getting your credit score up and reducing your Debt to Income (DTI) all these are key factors in your interest rate.
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Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.
Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.