An interest-only mortgage is a loan where a borrower pays only the interest on the loan for a predetermined initial period first. This is known as the “interest-only period.” You have the option of paying more monthly; however, if you only pay the amount of interest that is due, once the interest-only periods ends you will still owe the original amount you borrowed and your monthly payment will increase, even if interest rates stay the same.
While a nontraditional mortgage such as Interest-Only Mortgage loans provide flexibility for consumers, consumers may enter into these transactions without fully understanding the product terms. Please contact one of our loan specialists to answer your questions.
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