Using a Bad Credit Interest Only Mortgage Loan to Boost Your Credit
Much has been made lately about interest only mortgage loans. This has a great deal to do with the fact that many people can buy “more house” when an interest loan comes into play. Additionally, the initial payments on an interest only loan are quite small. If you don't think that you can afford a house, or if you think your credit is too poor, you might be surprised to learn that a bad credit interest only mortgage loan can help you in both of these areas.
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- Competitive rates and no hidden fees
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What is an interest only mortgage loan?
An interest only mortgage loan is one in which the loan terms are set in such a way that you only pay the interest on the loan for the first few years of the loan. Just as there are programs for bad credit as it concerns other types of loans, bad credit interest only mortgage loans are also available. Paying only the interest for the first 7-10 years of the mortgage usually means much lower monthly payments at the beginning, since you are only required to pay interest. This means that you could afford a home that maybe would be out of your range originally.
How it helps your credit rating
If you have poor credit and are relying on a bad credit interest only mortgage loan to purchase a house, then you will be pleasantly surprised to learn how it can help you improve your credit score. Because the payments are initially much lower, they are more affordable, making it easier for you to make them on time and in full each month. As you do this regularly, you will find that your credit score improves over time. When your score is sufficiently recovered, you might qualify for a more conventional refinance to a more traditional mortgage—one with better rates and terms.
Caution against interest only mortgage loans
It is important to understand that even though your bad credit interest only mortgage loan payment is initially low, it will eventually increase. In fact, after the initial part of the term, usually lasting between seven and ten years (although as few as five and as many as 12), you will have to start paying the principal as well. This results in a balloon payment that can be three or four times the amount you are paying only in interest. If you are not on solid financial ground at the time, you can end up losing everything because you are unable to make the new, higher payments.
Recommended Bad Credit Mortgage
Lenders: Top Recommended Companies To Refinance With:
(updated ):
Act Now! Lower your monthly mortgage payment!
- Competitive rates and no hidden fees
- Bad Credit OK
- New Purchases, Home Equity & Refinance
- One dedicated mortgage banker from first call to closing
- Quick Application with worthwhile results
If you are looking for a mortgage loan but have "less than perfect credit" this company has options for people with credit problems. Complete a short form and get one dedicated mortgage banker from first call to closing with a simple, straightforward process.
Mortgage rates are still low. Refinance & Lower Your Payment!
- Get Started on a Lower Payment Now!
- America's #1 Online Lender
- Save More and Spend Less!
- No Obligation and Free Expert Advice Another Great "bad-credit" Mortgage Company! QuickenLoans is also a competitive mortgage company for people with all types of credit including poor credit. Refinance or get new mortgage offers from this reputable Web based mortgage lender.
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