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rodltg2
07-05-2007, 06:23 PM
bad idea???

dont even know if they offer this anyomore. but i'm wondering as an option so i can make some improvments first. is it a bad idea? will put down 35% so shouldnt be uspide down.

any thoughts? finacial experts?

M-Funf
07-05-2007, 06:40 PM
I think you can still get them, but the question is...why?

Your principal payments will be TINY at the onset of the loan, so you won't save much at all, unless the loan is HUGE. Unless maybe you're looking to improve the property and flip it for a good profit, paying off the loan and making some money??? (I guess that's a question:o )

The balloon payment at the end of the loan sucks, too.

I did an interest only loan on my first home. The owners carried back 10% interest only on a 7 year loan, with a balloon payment of $22k at the back end. I had the sense to put away enough into a savings account to cover the $22k, and I'm glad I did.

:twocents:

msetexas
07-05-2007, 06:40 PM
Very few of these are offered anymore. When they were offered (or if you can find one) the additional interest expense baked into your rate is often substantial.

My advice would be to choose a longer amortization rather than interest only, if you need a reduced payment.

Sodar
07-05-2007, 06:59 PM
bad idea???

dont even know if they offer this anyomore. but i'm wondering as an option so i can make some improvments first. is it a bad idea? will put down 35% so shouldnt be uspide down.

any thoughts? finacial experts?

Why not just put less down (20% or so) to finance the improvements? Interest only loans are a bad idea 99% of the time.

rodltg2
07-05-2007, 07:20 PM
just curious , but i wont do it..

east tx skier
07-05-2007, 11:37 PM
Only time I've ever heard of one of these is from my wife. She's a bankruptcy lawyer. One of her clients apparently had one. Speaks volumes, eh.

Farmer Ted
07-05-2007, 11:44 PM
www.daveramsey.com (http://www.daveramsey.com)

JKTX21
07-06-2007, 12:28 AM
Word on the street is quite a few people utilize these types of loans to afford homes out of their reach with plans that their career / future will provide the means to pay for it later. I have a sneaky suspicion we will see some price correction in homes around this type of financing. Who knows?!

Leroy
07-06-2007, 01:06 AM
There is nothing wrong with an interest only loan as long as you understand fully the long term costs and how they compare to conventional loans.

Workin' 4 Toys
07-06-2007, 01:08 AM
just curious , but i wont do it..
Was this to build the lake?