If you are looking for a home but you know that paying a mortgage will be a severe drain on your finances, then perhaps you should look at getting an interest only mortgage. If you are unsure about what an interest only mortgage is and how it can help you, then this article can provide you with some useful tips on getting an interest only mortgage.
What is an interest only mortgage?
An interest only mortgage is a mortgage where you only pay back the interest on the loan, and none of the capital debt is repaid directly. Once you get to the end of the mortgage term, you will pay back the capital payment in full.
How do you pay back the capital?
Although you dont pay the capital back directly through your monthly mortgage payments, you indirectly pay for the capital. You pay for the capital through an investment fund or other lump sum. So, instead of repaying your mortgage capital each month through mortgage payments, you may monthly payments into an investment fund. Apart from investment funds, the other main ways to pay off the capital are:
Savings
Switching to a repayment mortgage
Another lump sum such as inheritance
What is...
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