Is it ever beneficial to get an interest-only mortgage loan?
Sometimes. If you commit to making principal payments. Of course, making principal payments on an interest-only loan kind of defeats the purpose, doesn’t it?
Still, for those who get paid in big chunks of cash, say a real estate agent, or a prostitute, there are benefits.
If you decide to skip a couple, however, you won’t be any better off, as Dr. Don explains, below:
Dear Dr. Don,
I am interested in purchasing a home and trying to keep my mortgage payment as low as possible. The mortgage lender I am working with has suggested an interest-only mortgage for the first five years and then refinancing after that. I would still put $500/month towards principal. Would I pay less interest in the long run than if I had struggled with the monthly payments with a conventional mortgage from the start?
Complete article: Interest-only loan vs. conventional financing, Don Taylor, bankrate.com