Interest Only Loan Programs
1st & 2nd Home Mortgage Loans
As the name suggests, you have the option of paying only the interest portion of your mortgage payment for a pre-determined period of time, which can substantially lower your total monthly obligation.
Interest-only mortgages are no longer utilized by only savvy-investor type clients who prefer to utilize what would have been the principal portion of their payment for other, more productive investments. These mortgages are now being used by homeowners from all walks of life for a variety of purposes, including:
- Saving / Investing: A prudent homeowner could invest the payment difference in a safe, liquid investment, at an interest rate much higher than the rate his principal is costing him to borrow.
- Commission / Seasonal Income: Interest-only mortgages can make sense for people whose income is sporadic, either because they are paid on commission, or because they work in a seasonal industry. In this case, they have the option of only paying interest some months, but paying additional principal, if they choose, on other months in which they have more cash flow.
- Home Improvement: Another worthwhile use for the "spare" cash that an interest-only loan provides would be to improve the home itself. The money you save each month could be redirected into minor home improvements such as a new roof, bathroom upgrade, new windows, vinyl siding, deck, or minor kitchen remodel to name a few. Improving the value of the asset may not only mean a higher selling price later, but some enjoyment now as well.
- Principal Reduction: Some homeowners who wish to pay down their principal at an accelerated pace opt for an interest-only mortgage. Because interest-only mortgages generally offer lower rates than fully amortized mortgages, the interest portion of the payment they are required to pay each month is much lower than what the interest would be on a fully amortized loan. Therefore, they can make payments similar to what a fully amortized loan payment would be, however, a larger portion of that payment is being applied to principal and less to interest, thereby accelerating your principal reduction.
- College Money: Many interest-only customers use their extra cash to help cover monthly expenses for college.
- Pay Off Other Debt: Redirect your monthly savings and pay off other high-interest, non-tax deductible debt such as credit cards, personal loans, etc.
- Cash Flow Flexibility: Perhaps the most obvious benefit of an interest-only loan is the flexibility it gives a homeowner on a monthly basis with regard to cash flow.
Please consult a Signature Mortgage Funding loan representative for details and further explanation about our interest-only mortgages and loan programs. It is our primary objective to assist you in finding the right loan program. 
