Wanted! Fixed Rate
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But what if I told you a mortgage could save you $47,784 in 10 years and was a fixed rate mortgage?
Fixed Rate Interest Only Mortgage Loans
I saw a funny greeting card the other day. An apprehensive cat is applying for a mortgage at a bank. Behind the desk sits an authoritative dog in a business suit. The only caption..."BEG!"
Begging the bank for a mortgage used to be common. In 1955, my dad, a WW II Veteran, was a Midwest-farmer-recently-turned-bank-employee. It is hard to believe, knowing the strength of my dad's credit, that the bank rejected him for the zero downpayment loan of the 50's, the VA mortgage loan, also known as a Veteran's Loan.
So, the bank approved an alternative solution with a large downpayment and monthly payments he couldn't afford.
In 1955, no one dreamed of the myriads of mortgage options we have today, let alone the interest only mortgage loans. I get so excited that we have multiple choices for mortgages. True, it can be confusing but just ask my dad about the alternative.
Why You Can Benefit From Fixed Rate
Mortgage Loans With Interest Only Payments
OK, maybe you can't. But just in case...listen to my story before deciding.
Before retiring, I was fortunate to be in mortgage lending over 20 years. I met people from all walks of life. One particular missionary family stands out in my mind. Their missionary assignment had been so extended their teenagers had never set foot on American soil. Readjusting to home was spinning them into mortgage culture shock. Although they knew little about mortgages, they had specific financial goals for the next 10 years.
"Kate, find us a mortgage with affordable payments to fit our 10 year plan while we put our children through college. After 10 years, we'll sell the house and return to the missionary field. But in the interim, we need an affordable payment. One thing though...no adjustable rate mortgages. We also want to avoid the expense of refinancing before we sell the home. Please, find us a solution!"
When I explained how they could have 30 years of fixed rate stability and low, affordable payments during the initial 10 years, I heard an audible sigh of relief. With interest only payments, they could afford to send the children to college. Refinancing due to run away interest rates was not a worry because the rate was fixed for 30 years.
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Not convinced? Still thinking this is a hidden adjustable rate mortgage? If so, listen carefully and I'll show you how fixed rate interest only mortgage loans can save you thousands and thousands of dollars during the initial 10 years.
Compare Traditional 30 Year Mortgages To
Fixed Rate Interest Only Mortgage Loans
- Traditional 30 Year Fixed Rate Mortgage Loans
- $400,000 loan amount @ 6%
- $2,398 principal and interest payment
- Payment fixed for 30 years
- Rate fixed for 30 years
- Your mortgage pays off in 30 years
- 10 Year Fixed Rate Interest Only Mortgage Loans
- $400,000 loan amount @ 6%
- $2,000 interest only payment
- Payment fixed for initial 10 years
- Rate fixed for 30 years
- $47,784 10 year savings compared to 30 year example
- $2,865 payment for remaining 20 years
- Payment fixed for remaining 20 years
- Rate fixed for 30 years
- Your mortgage pays off in 20 years
Yep, the $47,784 stays in your pocket the first 10 years. And the interest rate NEVER changes because it's really truly fixed! Feels good doesn't it? Just like the family returning from overseas, fixed rate interest only mortgage loans can make your home affordable too.
Because after all, it's your mortgage and your home. You deserve the best!
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The calculations in this article are estimated. Consult a lender for exact numbers and outcome. Interest rates vary and could determine a different result.
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Kate's Best Mortgage Rate Blog is here. Keep up to date on what's new about mortgages and additional tips to fixed rate interest only mortgage loans.
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