This was informative. I was a single parent and purchased a $300000 home for me and my 2 kids. It’s interest only. My payment originally was $1800, and over time increased to $2600. I have been paying for 18yrs on a 30 year mortgage. I didn’t qualify to refi, but we are fine. Of course my kids are grown, but interest only worked for me. The biggest thing is to refi early on if possible.
You are have been living in the present too much. You have been paying INTEREST ONLY for years aka money that disappears while you put nothing on the principal. You have been getting robbed. It’s crazy, it’s literally in the name and people still sign up for it.
@@BlakeWheelersBurnerAccount You still get to collect appreciation on the home. If you bought a 400k home this way, and the home appreciated at only 4% per year, then you will have gained nearly $50,000 in equity just from the appreciation of the property. If you consider the fact that you are hardly paying any principal at all during the first few years of the mortgage, then this type of loan may or may not make sense.
I'm confused at the interest and principal part why does it go down when the other goes up? I see the interest rate is not the percentage of the overall amount. It's the percentage of the money you still owe. School never teaches why things are calculated like that and it's our fault we don't wonder why it's wrong .we just correct it.
I have a question. If the price of the property goes up, and I sell it, would I still get the capital gain? I am confused since you mention the equity is not increasing.
Thanks for your question! For a better breakdown, including several examples, check out the article in our Learning Center: www.lowermybills.com/learn/buying-a-home/interest-only-mortgages-how-do-they-work/ - Thanks!!
When you calculating your mortgage you keep calculating the percentage of the money you still owe. That 5% is not the 1000 dollars you loaned it's the 350 you still owe. You really need to know your bank statements. How they work and why they work that way. 👍
This was informative. I was a single parent and purchased a $300000 home for me and my 2 kids. It’s interest only. My payment originally was $1800, and over time increased to $2600. I have been paying for 18yrs on a 30 year mortgage. I didn’t qualify to refi, but we are fine. Of course my kids are grown, but interest only worked for me. The biggest thing is to refi early on if possible.
You are have been living in the present too much. You have been paying INTEREST ONLY for years aka money that disappears while you put nothing on the principal. You have been getting robbed. It’s crazy, it’s literally in the name and people still sign up for it.
@@BlakeWheelersBurnerAccount You still get to collect appreciation on the home. If you bought a 400k home this way, and the home appreciated at only 4% per year, then you will have gained nearly $50,000 in equity just from the appreciation of the property. If you consider the fact that you are hardly paying any principal at all during the first few years of the mortgage, then this type of loan may or may not make sense.
In France, we don’t have the Interest only shit. And this is great.
I'm confused at the interest and principal part why does it go down when the other goes up? I see the interest rate is not the percentage of the overall amount. It's the percentage of the money you still owe. School never teaches why things are calculated like that and it's our fault we don't wonder why it's wrong .we just correct it.
Thank you! This was really helpful!
very informative!
@lowerMyBills
Are there any limitations on refinancing this loan? Or can it be refinanced at any time through the loan period?
I think you can refi after the prepayment penalty period end.
I have a question. If the price of the property goes up, and I sell it, would I still get the capital gain? I am confused since you mention the equity is not increasing.
If the home appreciates you should get the difference still
How did you calculate the payment (P&I) after the 10 years? And how’d u calculate the original interest only payment?
Thanks for your question! For a better breakdown, including several examples, check out the article in our Learning Center: www.lowermybills.com/learn/buying-a-home/interest-only-mortgages-how-do-they-work/ - Thanks!!
Informative😊
Thanks 🙂
What if I use the tax write off towards principle?
Hey bro, is that intrest you get, taxed?
I don’t have an interest only mortgage. I’m pissed mine went up at all and I think it’s bullshit and I’ll find out.
Only reason this happened is due to your assessment. Property/school taxes prob went up (assuming you escrow)
When you calculating your mortgage you keep calculating the percentage of the money you still owe. That 5% is not the 1000 dollars you loaned it's the 350 you still owe. You really need to know your bank statements. How they work and why they work that way. 👍
😂 never do this type of loan.. never!
If you’re poor yeah
@@Juicedapipsqueak10no one ever should. Imagine willfully signing up for an interest only payment while the principal still must be paid.
You don't know the power of this.
You can pay the principal while you're paying interest.
Nope.