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00:00 Introduction
00:30 Traditional Mortgages
1:30 InterestOnly Mortgages
2:37 Potential Risk
3:11 Reasons To Have An InterestOnly Mortgage
4:25 Traditional vs. InterestOnly
5:56 Pros & Cons
7:46 Closing
An interestonly mortgage is a nonconforming loan where the borrower can pay only the mortgage interest for an initial period. Nonconforming loans don’t adhere to the rules set by Fannie Mae and Freddie Mac, which are governmentsponsored enterprises that back conforming loans. That’s why the features and requirements of interestonly mortgages can vary widely.
Of course, borrowers must repay the principal balance on an interestonly mortgage. But repayment isn’t expected until after the interestonly period ends.
Featuring Avery Heilbron, Financial Educator
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