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Interest only home mortgage loans are considered new phenomena in the loans industry and also in the home purchasing industry. While one big feature of interest loan mortgage only refinance is a bigger cash flow every month, such cash flow increase can actually come with exorbitant price to pay. In exchange for bigger cash every month, the home owner might unwittingly sacrifice his capacity to enjoy mortgage with fixed rate apart from the capability to build on equity. Indeed, when it comes to interest only home mortgage loans, the borrower benefits greatly from it if only for the increased cash every month. Home owners who go thru interest loan mortgage only refinance are surely to have more available money every month as they will just pay initially on the mortgage interest. As the payment on the principal is reduced, the home owner is put in a situation wherein he can now afford to have bigger home or enjoy a more comfortable lifestyle with their new budget. Still, there is a price to pay for such refinancing types. While interest only home mortgage loans are not ideal, they offer benefits particularly in situations when the owner is having problems in his fulfillment of monthly bills. In such case, he might only be too willing to sacrifice a financial loss just so that he continues to pay up his bills every monthly in a prompt manner. One disadvantage of interest only refinance mortgage loans is that they are made available with ARM or adjustable rate mortgages. This only means that the rates are unstable and fluctuate as the prime index rises and falls from time to time. Such is a costly risk for the home owner to experience especially when the rates of interest markedly rise. Usually a cap is placed on the amount in percentage figure, and while the rise of interest rates can be on certain period, it can actually be a major error for the home owners. Another major disadvantage of refinancing interest only home mortgage loans is that such schemes disallow the home owner to build up in their home equity during the beginning stage wherein repayment can be done only on the loan interest. This is surely a big problem for most home owners especially those who wish to earn substantial profit from the sale and disposal of their homes. They might eventually find that their participation in such home mortgage refinancing scheme only negatively affected their chance for generation of clear profit from the sale of their property. For more interesting and engaging articles and discussion on topics such as refinance home mortgage interest rate and refinancing mortgages in general, do visit our Refinance Home Mortgage for You blog.
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interest only, home, mortgage, loans,
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