How do you feel about "interest only mortgages?" Would you feel comfortable buying a house with one?
by 
Babycakes Deux
ANSWERS: 2
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I think they're great if your in it for a short term investment, for flipping a house, etc. Possibly for keeping the payments down when first buying to be able to do some needed repair or pay off some bills out of pocket. They are not good for the long term. You have to remember that you are not reducing principal at all and when you get ready to refi to a principal reduction loan you are subject to the market or you have to wait until rates are where you want them.
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WIth an interest only mortgage, you should be putting away the remainder of what you would be paying on a regular mortgage in a high interest bearing mutual fund, if you do this for FIVE years, you have put yourself ahead of the game, however if you only pay interest and do nothing to save for the principal... you are spinning your wheels... not a good situation
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