"NOYB" wrote in message
ink.net...

"basskisser" wrote in message
ups.com...

You have no clue about interest only loans, do you? A fixed rate
interest-only loan is ideal in a market with rapidly appreciating
properties.

Oh, so then, you plan on keeping your interest only loan for ever? The
lender will GLADLY do that! Do you REALLY think that it's sound
financial advice to tell someone to buy something, paying only the
interest, and not paying down ONE BIT of the principal????

Yes. *If* the house is in a rapidly appreciating area *and* they intend
to sell it (or reverse mortgage it) upon retirement.

If they want it paid for *in full* by retirement, then the answer is *no*.

As long as you have the cash flow, and an interest rate lower than the
average return in the stock market......it is ALWAYS better to have the
maximum mortgage.






What you're confusing it with is "minimum payment" loans that
have ridiculously low initial rates of 1.5% or less. Those are
dangerous
loans, because as rates rise, you can get into a negative
amortization
situation.

Where is the risk with 5 year fixed-rate interest-only loans? And
how are
they any different from a conventional ARM? Answer: they're not.
You pay
so little principle in the first 5 years of a conventional loan, that

there's virtually no difference from an interest-only loan.
If you pay the minimum, yes.

If you can afford to pay more than the minimum, then why not just go with
a shorter term loan? You'll get a lower interest rate, and you'll pay
far, far less interest over the life of the loan.

An interest-only loan just lowers your "minimum payment" each month. I
could always pay principle if I wanted to.


But then all you are doing is buying a 4% note back from the bank.......why
do that when you can get 7-10 in the market/