Interest Only Mortgage

• The rates are established by taking the margin (which is fixed by the lender) and adding the published index rate together to arrive at the interest rate. The interest only portion of the loan generally will last for 5 or 10 years. At the end of the interest only period, the lender will establish a amortization schedule for the balance of years remaining and the loan amount. Generally, interest only payment is set by the established rate and the balance on your loan. These rates are usually based on the Libor or treasury.
• I have lenders that will finance 100% of the purchase price, interest only. It may be one loan of 100% or two loans that will comprise of 80/20.
• Pay option arms may be an option for an interest only mortgage.  
  This is a comparison of monthly payments between a Fixed Rate, 3/1 Arm, and Interest Only mortgage.