Interest Only Option

Normally, your monthly mortgage payment will consist of both principal and interest (as well as property tax, hazard insurance, and perhaps HOA fees).  An interest only option is a home loan feature that allows you to defer paying the principle portion of the monthly payment for a specified period.  It can be advantageous for those who expect an increase in income or who plan to move before the option expires.  Be aware that by using this option, future payments will be higher than if you were to pay on the principal each month.

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