• Home

    Welcome to Savings Home Mortgage LLC

    Whether you prefer to do business online or meet a live person, we will provide you a custom tailored loan to fit your exact needs.
  • Apply Now
    • Full Application
      • We suggest filling out this application only if your loan consultant has instructed you to do so. This application requires you to setup a user name and password for yourself.
    • Download Application
      • You can download the application material now and mail or fax it to us. This is a full application that can be printed as opposed to the online application that can be filled out on a browser.
  • Purchase
      Purchasing a home is a very exciting time, and being well prepared will help you make better decisions. Take this opportunity to learn more about home buying and the mortgage process.
  • Refinance
      Why pay more than you have to? Don't miss out on super low rates.
      Changing the terms of your loan can benefit you and maximize your monthly income.
  • Tools & Info
    If you would like to know the rate for which you qualify, Apply Online, and we will give you an accurate assessment of what you can afford.
    If you have any questions, just click Contact Us or call us at 888-616-6857.
  • About Us
    Company Profile
    Contact Us
    If you would like to know the rate for which you qualify, Apply Online, and we will give you an accurate assessment of what you qualify for.

Interest Only Loan


3/1 Adjustable Rate Mortgage (ARM)

A mortgage is "interest only" if the monthly mortgage payment does not include any repayment of principal for some period. The payment consists of interest only. During that period, the loan balance remains unchanged.

For example:
I if a 30-year fixed-rate loan of $100,000 at 8.5% is interest only, the payment is .085/12 times $100,000, or $708.34. Otherwise, the payment would be $768.92. This is the "fully amortizing payment" - the payment that, if maintained over the term of the loan, will pay it off completely.

The interest only loan thus reduces the monthly payment by 7.9%. A loan that is interest-only for the full term would not amortize. The loan balance would be the same at term as it was at the outset.

The interest only loans of today are interest only for a specified period, such as 5 years. At the end of that period, the payment is raised to the fully amortizing level.
In such case, the new payment will be larger than it would have been if it had been fully amortizing at the outset.

Suppose, for example, the interest only period on the loan described above is 5 years. Then the payment starting in month 61 would be $805.23. To reduce the payment by $60.58 for the first 5 years, the borrower would pay an additional $36.31 for the next 25. The longer the interest only period, the larger the new payment will be when the interest only period ends.

If the same loan is interest only for 10 years, for example, the fully amortizing payment beginning in month 121 is $867.83. To reduce the payment by $60.58 for the first 10 years, the borrower would pay an additional $98.91 for the next 20. Interest only mortgages are for borrowers who want a lower initial payment, and have some confidence that they will be able to deal with a payment increase in the future.


It's Easy! Get pre-qualified NOW!
Fill in your details below, and start your application with a free consultation.

   
*Please fill in the required fields.

What Clients Say

"During a time of crisis, Walter provided what was needed to get through a difficult time for me and my family. We sought him out a second time when were in a much better position because we can trust him."