Interest only home loans can be very rewarding for borrowers and risky for creditors in a lot of cases. Often the borrower has to have a good track record with great credit history and reputations if a major creditor is going to approve an interest only home loan for them. Often the monthly interest repayments hover around ten per cent or so which is high. Often in new interest only loans the interest starts at around five per cent which is very good.
However as monthly repayments continue the interest continues to rise and climb which often leads borrowers to having further financial problems. This is where you need an understanding and flexible creditor. Often a new creditor on the market will be like this and will make adjustments so the borrower can happily and easily meet there side of the bargain.
Out of all the home loans the interest only home loan is very risky compared to the others. It has been reported that there have been a lot of people who have damaged there credit history and reputation by struggling to pay back the amounts expected by the creditor for set periods. If you can get into a fixed interest only loan it may not be that good, as inflation and interest rates may continue to drop and you will be left paying a lot higher repayments than average. So variable repayments is the best way to go, once again you will need to study the strength of the economy where you live.
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