Steamboat Springs, CO Real Estate and Community Blog

(This article is guest-authored by Holly Rogers of Capital Mortgage Advisors. For more information on financing Steamboat real estate, call Holly at (970) 879-8765.)

You’ve found the Steamboat Springs house you want to buy, you’ve made an offer, and now you’ve got to decide how to pay for it. With all the options available today, trying to decide on a mortgage can leave you a bit baffled. One option that has everyone talking is the Interest -Only Mortgage. This increasingly popular mortgage option is:

• best for people whose income comes from infrequent commissions or bonuses, or
• for those who expect to earn a lot of money over the next few years.
• gives you flexibility in the payment and you can at any time pay towards the principal with out a penalty.

With interest-only loans, you pay only the interest on your mortgage for a fixed period of time (10 years - usually 100% tax deductible on a primary and secondary residence- on a 30 year fixed rate mortgage). At the end of the interest-only period, you start paying off principal and interest payments until the mortgage is paid. When you pay down a portion of the principal, your payment is adjusted based on the remaining principal balance. This is helpful if you have another property to sell or will be coming into some money that you wish to pay on your mortgage. You can then get a smaller payment after some of the principal is reduced. When you have a fully amortized loan (principal an interest payments being made every payment) if you pay down a portion of your principal you will reduce the time frame you are paying off the mortgage but the payments will remain the same.

Holly Rogers is a mortage broker with Capital Mortgage Advisors in Steamboat Springs. Email Holly for more information.