Originally posted by "dcg123":
It depends on the entire context. It depends on your specific long range and short range goals. In my opinion, given the right circumstances there's nothing wrong with an interest only loan. For example let's say I'm purchasing a fixer-upper for $110,000 that has a repaired value of $170,000. If my goal is to sell the same property within the year of completion, there's nothing wrong with a 40 year amortization schedule on a one or two year fixed rate interest only loan with no pre-payment penalty. I wouldn't have a problem with any product other that negative amortization that keeps my payments low. And depending on the down payment, monthly payments and the profit margin in the transaction, I might even consider negative amortization.
DCG 123,
So it sounds like it's not a good loan to have unless you're going to sell the house in a year or two correct? Also, it seems like a good loan to have if you want a low mortgage note.
