| Basics You can cash out your equity into a new | | | | mortgage where a borrower has the option to pay |
| mortgage loan. There are many loan options, including: | | | | less than an interest only payment. This results in a |
| - 30 year fixed | | | | very low mortgage payment. This type can help |
| - Interest only loans | | | | someone who wants to have the lowest possible |
| - Minimum payment cashout 30 Year Fixed Mortgage | | | | payment. |
| This type of loan has the advantage of interest rate | | | | The advantage of this loan type is that it helps a |
| stability. It is usually the most expensive because the | | | | borrower's monthly cash flow. The disadvantage of |
| interest rate is the highest and the monthly mortgage | | | | this loan is that if you make a minimum payment the |
| payments are the largest. This type of loan may be of | | | | amount lower than an interest only payment is added |
| limited value to someone who intends to sell the | | | | onto your principal. For some borrowers this is |
| property shortly. You don't need a 30 year fixed loan if | | | | acceptable, especially if they believe the value of the |
| you are only going to keep the property for one more | | | | property will continue to increase. |
| year. | | | | How Much Is Enough? A borrower should use their |
| Interest Only Mortgage An interest only mortgage | | | | equity carefully. It can be helpful to pay off higher |
| allows a borrower to make a lower payment than is | | | | interest rate consumer debt such as credit cards or |
| normally allowed. An interest only payment keeps the | | | | car loans. Using the equity for other extravagances |
| principal balance the same - the loan size does not go | | | | such as boats or traveling may not make as much |
| up or down. This may be appropriate for borrowers | | | | sense. |
| who do want a lower payment on their monthly | | | | Consumer debt that is consolidated into a mortgage |
| mortgage but do not want negative amortization on | | | | loan may convert the debt's interest payment into a |
| their property. | | | | tax deductible item. Check with your tax advisor about |
| Minimum Payment Loan This type of loan is a | | | | this. |