The most strategic way to get ahead on mortgage planning is to use interest only financing…. Here’s a few reasons why:
an amortizing 30yr loan doesn’t convert to a majority of payment going to principle until after year 10
historically, people change the structure of their mortgage every 7.5 years… so the above is never realized
making additional payments to an amortizing loan only reduces the time to pay off (which per above is rarely realized). Making additional payments on an I/O loan provides immediate benefits in that your mandatory payment is reduced the next month. Int only is simply principle x rate / 12.
depending on your age and career, the flip of a majority going toward principle on a 30yr corresponds to when you will be making more money and need the higher interest deduction.
is paying off your home was such a great strategy then reverse mortgage companies ripping off older retirees wouldn’t exist.
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The most strategic way to get ahead on mortgage planning is to use interest only financing…. Here’s a few reasons why:
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