Interest only loans and adjustables

Talk to alot of people that have interest only loans tied to a adjustable with also a second which puts them over the market at the market value. HOW are you dealing with these adjustables and interest only loans just want to be sure I’m on the right tract

Not quite sure what you are asking?

Please be more specific and I may be able to help you

For the duration of the interest only payments you only pay the interest on the loan and no principal. After the fixed period is over the rate adjusts to its index. Its a great loan to have when you financing 100%. Hopefully before the fixed period is over you’ll gain 20% equity in the property and refi with out PMI.

You sound like you’re refering to neg am loans.

Your question: how are we dealing with ARMS w/ interest only options?

Answer: Just fine.

Well it just doesn’t have to deal with just neg ams

it could be with any IO loan

There are more and more lenders that are offering IO programs even with fixed rates.

This is a great program for investor especially if they are not going to hold the property for very long because you will be able to get a larger cash flow spead with just paying interest verses paying the principle also. Plus, if you are going so sell it shortly the first few years you don’t touch very much principle on your loan because the bulk of the payment is for interest even if you are paying PITI.

It is just away to leverage money by alowing you to pay a lower monthy fee while still charging a decent rent and pocketing the difference.