If you’re in the market for a house and are considering an “interest-only” mortgage, proceed with caution.
With tightened lending standards amid ongoing economic uncertainty — coupled with continually rising home prices and persistent low interest rates — some borrowers may gravitate to these so-called interest-only loans, experts say. These are loans where you only make interest payments on the balance for a set period of time. And while they may be suitable for some would-be homeowners, it’s important to understand both their pros and cons.
“There’s a small pool of buyers that could probably use this loan option,” said Al Bingham, a mortgage loan officer with Momentum Loans in Sandy,…