Interest only mortgage rates have fluctuated over the past few years along with most other mortgage rates. Qualification will depend upon several factors. The most important factor is past credit score. Credit scores determine the risk associated with lending money to an individual and the interest only mortgage rate they get. If a person has a low credit score, they can expect rate to be extremely high. Credit scores are obtained from one of the three major credit reporting agencies. These agencies take into account things like past due payments, charge offs, and total outstanding debt and compile a score that is used by mortgage lenders to decide what interest only mortgage rate will be charged.
A person may not even be aware that an interest only mortgage is a new type of loan. The payment is simply interest and eventually a person will have to repay the principle as well. Interest only mortgage rates allow a person to pay this option for a specific period of time. Some may ask if interest only mortgage rates are a good idea. Many Christian experts feel these are a bad idea that allows a person to live outside of their means. The Bible teaches a man should provide for his family. "But if any provide not for his own, and specially for those of his own house, he hath denied the faith, and is worse than an infidel." (I Timothy 5:8.) Providing a secure financial future is a legacy everyone should strive for, but certainly not something that should be done if it is clearly unaffordable.
If a person is only paying the interest payment, they may wonder what purpose this type of financing will serve. With today's competitive real estate market, people are finding that the home they long for is just slightly out of reach. With low interest only mortgage rate this home now becomes attainable, but with some serious provisions. This option allows the borrower to pay only the interest, making any portion of the principle available. The gamble is that when the full payment becomes due, the borrower will now be earning more and the higher payment will be possible and become very important because these rates determine what the initial payment amount will be. Deciding whether or not this option fits into a specific situation will depend on information gathered from research and speaking with professionals. Careful consideration and prayer will help a person determine the best course of action for each individual situation.
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