Do you plan on retiring in this home? If not, do you plan to pay the mortgage off prior to moving? If cash flow is the primary concern, then an Interest Only Loan is a good choice unless you are in a depreciating market and highly leveraged. If you plan on moving prior to paying your mortgage in full, it is a question of pay now or pay later. By paying Interest Only, your are putting the principal portion in your pocket today rather than receiving that money when you sell your home.
Thank you so much! You confirmed what I was thinking would be the right thing to do. I just wasn't sure if there was something I was missing or something I have overlooked. Lenders don't always tell you what is best, as they are there to make money. I needed an outside opinion. I think we'll go ahead and pursue the interest only loan. It seems like the best way to improve our credit. We had financial trouble due to my illness (cancer) and we are trying to get back to top credit scores again. It's sure not easy.
Do you know if the interest only loan can be had with a 2 year ARM loan?
Thanks again! Great information!!!
Thanks! I think I'll ask about an interest only loan for two years. That seems like it would fit our needs...
1. low payment
2. Pay off second (which is at 14%! right now!)
We may or may not stay in this home after the two years (that's around retirement time) so that's when we'll decide. I am thinking that if we stay here we could look into refinancing at that time and we will have gotten our credit score up by then as well. So, hopefully a new loan will be beneficial for us at that time. We have a huge amount of equity in this home so hopefully we'll be in good shape. I guess it's all a gamble no matter how ya look at it. I think we'll take the chance on an ARM with interest only, if we can find the best lender to do this.
Another question for all of you, since you are so good at this!!! :-)
Do you know where I can research, or maybe you already know, where I can find out about the top lenders? I'd really like to know that I am working with the best, but not sure how to find out who actually is the best!