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Old 07-19-2005, 04:56 AM  
Sarah - GTS
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Join Date: Jul 2003
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In my opinion Interest only Mortgages are very risky, as you are betting that the value of the property will appreciate. What if the market drops? If you finance the majority of the property with an Interest only mortgage and the value drops you either have to hold onto the property or lose you shirt when you sell.

We do use some Interest only Mortgages, but they are short term second mortgages for small amounts (i.e. 10% of value), with very open clauses to make lump sum payments against the principal. Of course these are all rental properties, so we are investing in the income of the property vs. the appreciation and resale of the property.
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