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for 3 Year ARM Interest Only Loans
While you may have noticed that 3/1 IO
ARM products are not listed in the survey
at the top of this page, some of the providers
likely do have access to these programs.
Simply call them directly to learn more
about there various interest
only mortgage programs.
What
is a 3 Year Interest Only Mortgage?
It is important to note that 3/1 interest
only mortgages will vary by investor. Be
sure to ask your mortgage professional for
details on their specific product offerings.
Consumers should be well versed in the pros
and cons of these products before moving
forward.
Here is an overview of how many three year
interest only loans function (see note above):
- Loans are typically 30 year amortizing
mortgages where rates are set for the
initial three years of the loans and then
will begin to adjust after those first
36 months pass. You will want to read
through the Adjustable Rate Handbook available
from your lender and/or broker and pay
attention to the mortgage's margin, caps,
and the index it is tied too.
- Interest only period is just for the
first 3 years of the loan and then principal
payments must be made. Consumers must
be aware that the remaining principal
balance needs be paid off during the last
27 years of the loan.
Like all interest only mortgages, 3 year
interest only loans are not available in
all states. Be sure to check with a mortgage
consultant to see if an IO loan is an option
in your area.
Please note that ARM
products and interest only loans carry
an elevated level of risk. Be sure to fully
understand the potential down sides of these
products before making a financing decision.
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