Typical Interest Only Rate?
I want to get an interest only loan for 150,000. What is the typical rate for an IO loan with good credit right now? My plan is to rent the house out for 4 year sor so, having a high positive cash flow during this time, then selling the house and making a profit from its appreciation. Sound like a reasonable idea....has anyone been doing this? Thanks.
Washington Mutual has a product called a 1 month option ARM. The current rate is 1.26%. It adjusts monthly (which is scary), but the advantage is it's an average of the last 12 months. So even if rates continue to rise, it takes into account that rates have fallen over the last 12 months. Another advantage is it offers four payment options: minimum payment, interest only, full principal and interest (30-year term) and full principal and interest (15-year term).
My broker at WAMU tells me all the VPs at the company use this product because of the tremendous financial benefits.
I'm toying with the idea of using one myself on a multi refi.
http://www.wamuhomeloans.com/rates/index.ognc
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