When a mortgage becomes a miracle

When to take it

When to take it
Although one must be precautious, interest only mortgages can be very useful in certain situations. If you are confident that your professional path assures you a big raise in a few years time, you should not discard the option. An IO loan will help you acquire a home now and catch up with the payments a few years later. You could also consider these mortgages if you get large periodic bonuses or commissions. In such cases you can pay off the principal when the cash is available, but don’t forget to check if your loan contract has a clause for early payment fees.
Also, if you think you can afford a regular mortgage and have also other expenses or debts, you might consider using the extra cash to pay them off. You can also save up for future emergencies. The low mortgage payments of interest only loans will allow you to increase your purchasing potential only if you are disciplined and invest or save that extra cash.
Job relocation, retirement or a growing family can also be reasons to choose an IO loan, always that you are not planning to stay in the new property for a long time. Remember that if you buy, there is a risk of not being able to sell at a profitable price. If you take an interest only mortgage make sure the area where you are buying has a strong appreciation rate. For further enquiries ask your loan provider or contact the Financial Services Authority (FSA - http://www.fsa.gov.uk/).