Times have changed, and we a forced to change with them. After the incredible events of the past few years the world is just about catching its breath, but no one knows for sure if the economy is likely to recover fully from the recent financial crisis. For many, money is by no means abundant, and interest only mortgage loans are one of the few options available if they hope to own their own home, let alone adorn it with the best home furniture. It is not the safest option however and any potential home buyers should exercise extreme caution before taking this route to home ownership.
After years of irresponsible lending and inevitable crisis, there is very little security in the property market or the job market, and there are two things which are of vital importance if an interest only mortgage is to be a successful one. Firstly you need to be fairly confident that the property is likely to rise in value, at least to the extent that the original loan amount is covered. Secondly, anyone opting for this kind of mortgage should be highly confident that they will have a steady and reliable source of income for the duration of and sometime after the term of the mortgage.
Gone sadly are the days when an interest only mortgage made it easy for anyone to earn on the property market, in the current economic climate nothing can be considered certain. While there is undoubtedly still opportunities for profitable property investment, and a place for the interest only mortgage, it can and does still lead to financial difficulty for the unprepared. House prices have corrected somewhat from the unaffordable levels from a few years ago, but there is every chance they have further to go. No one seems completely confident of a recovery and redundancies in the job market are adding to the feeling of insecurity.
In summary an interest only mortgage can work if you can make some guarantees. Essentially, this should only be considered for a relatively short term and you are completely confident you can pay off the entire debt at the end of this term. Without such guarantees this type of mortgage may be something you later regret.
