0 million non-recourse floating rate interest-only loan
that features a 36-month term with two extension options, flexible pre-payment, and is inclusive of a facility to provide for capital expenditures, working capital, and interest and carry reserves.
Borrowers who used brokers were more likely to obtain an interest-only loan
compared to those who went directly to a lender
WHEN the pressures begin to build on balancing the household budget, does it make sense to use the mortgage as a safety valve by switching to an interest-only loan
to cut monthly repayments?
The self-employed, contract workers and those receiving substantial bonuses can choose to minimise their regular monthly payments with an interest-only loan
and use 'peaks' of higher income to make ad hoc capital repayments.
When Lawrence Ragland was looking to expand his real estate holdings, he used funds he obtained from a cash-out option on a five-year interest-only loan
He said some borrowers were relying on interest rates peaking next year and then falling, and planned to have an interest-only loan
for just two years before switching to a repayment one, while others were hoping their financial position would be better in two years' time.
This can happen if the lender or intermediary wrongly sets up the loan as interest-only when it should have been a repayment loan or if the investment planned to repay the interest-only loan
is not set up.
The interest-only loan
is for a 3-year term and was closed within two weeks of application.
This compared favourably with Report 445's finding that more than 30% of applications reviewed showed no evidence the lender had considered whether the interest-only loan
met the consumer's requirements.
The financing was structured to be a 7-year interest-only loan
and was funded to 59% of value.