Making the decision to choose an interest-only option on a fixed-rate mortgage means that your mortgage will be divided into two different periods. Under the first period, you will only pay the interest and no principal. This means your monthly payment will be significantly lower. The second period, however, you will pay both.
To give an example of this, take a fixed-rate mortgage under a 30-year term. The first 10-years you will pay for the interest in monthly payments. The last 20-years you will pay for both the principal and the rest of the interest. The initial amount borrowed will be paid off in the second term of the long-term loan. While this mortgage still has a fixed-rate, one must understand that the monthly payment during the second term will be higher than the first, and to adjust their finances accordingly. Go to Home Mortgage in Tampa to get lots of information on mortgages.
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