Repayments can stretch your budget skills and your financial capacity...
... But every property owner has to contend with them, right?
You may not be able to escape loan repayments...
... But there is a way to lower your repayments for the short term.
... And you may receive greater tax deductions, too.
The answer is interest-only home loans allow your repayments to only cover the interest portion of your borrowed amount.
Some homebuyers find this grace principal preferable than paying the full amount from the beginning.
Sometimes they use it to offset high expenditures at the beginning of the loan period.
For example, if you managed to buy a property under market value and are looking to make strategic improvements to it for value adds.
The downside is that these payments don’t actually reduce your principal.
As mentioned, the interest-only period is temporary....
... For example, you may receive an interest-only period of 5 years.
After that, it changes to a regular principal and interest loan.
Keep in mind, too, that interest-only loans generally cost more in the long term...
During the interest-only period, you’re only paying the interest.
... When it switches to a principal and interest loan, you’ll still be paying additional interest for the life of the loan.
...And you’ll have less time to pay off the entire loan.
The result is that you have to plan for higher repayments after the interest-only period is up.
If you plan accordingly, this may not be much of a hardship.
However, some may have trouble with the switch if they don’t budget for the higher repayments at the end of the period.
Many big lenders offer interest-only loans.
Some lenders have also offered longer terms for property investors.
Their aim is to boost business in a softening economy.
Once you’ve found the right loan for you, it’s time to focus on investing.
This is where Dashdot can help.
We’ll help you find the high-performance properties that can put you on the path to the future you’ve always envisioned.
All it takes to get started is to apply to work with us.
Find out if you’re a good fit today.