The Drawbacks of a Miami Interest Only Mortgage

Even if MTA loans have many benefits, they also have a few but important drawbacks:

• It’s an adjustable loan – They are based on an adjustable interest rate. That means that your payments may go up or down depending on the economic indexes.
• MTAs require a minimum of a 5% - If you require 100% financing and looking for a low payment, you may prefer a 1, 3, 5 year interest only ARMS.
• Since the initial rates are so low, your monthly payment may not cover the interest charges causing the loan to create deferred interests (also called negative amortization.) If you are low on cash flow, you may need to refinance the loan every five years (just before the loan is recasted and the monthly payments jump up.)
• If you choose loan to afford a bigger home, you may be in trouble when the payment goes up.

Please, take some time before deciding on choosing this type of loan. Talk to a licensed mortgage broker who can show you the different options available to you. The Miami mortgage broker can look at your financial situation and help you choose a mortgage that fits your financial needs and goals.