Interest Only Mortgage Loans

Ditech mortgage has been advertising a $59 flat fee home equity line of credit for a while now. You can hardly watch business news or any other news channel any morning and not be bombarded by ditech ads.

Since equity lines of credit are interest only seconded mortgages, it seams appropriate to cover them here.

This type of mortgage loan became very popular as home values started to rise and interest rates started to drop. That process started in 98 and continued until the end of 04 during which time almost everyone and their uncle got themselves an equity line and fixed the kitchen and the bathroom.

I’ll cover the perils of this type of mortgage in my next post but suffice it to say for now that what ditech is advertising for Only $59, is available from almost every bank and mortgage broker for Free! Yes free, and hence the title of this post.

A recent article in the Money magazine covered the issue of cashing out of the properties in order to brat the possible housing bubble. Home prices nationwide are rising at a rate five times that of personal income and some areas gaining 20% to 30% a year. Even with home pro\ices soaring, the number of properties purchased is on the rise. Investment properties and condo-flipping have become the next rage among the get-rich-quick crowd. This recent craze has led Money magazine to call homes the new tech stocks and we know how that boom turned out.
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This calculator will help you to decide whether or not it would be advantageous for you to refinance either a single mortgage, or the consolidation of a first and second mortgage, into a single mortgage. Not only will this calculate the monthly payment and net interest savings (if applicable), but it will also determine how many months it will take to break even on the closing costs (if applicable).

This is not directly related with interest only loans. But it still gives an exellent piece of advice.