Here at MortgageBase, we specialize in providing a variety of jumbo and super jumbo loans, including our interest only loans. One of our most popular home loan products is our interest-only, 10-year adjustable rate jumbo mortgage. Let’s talk about how our interest-only, 10-year ARM jumbo mortgages work, and why they’re a common choice for our clients.
The interest-only, 10-year adjustable rate jumbo mortgage is a versatile loan which provides unparalleled flexibility for the borrower. During the initial 10 years of the loan, borrowers are required only to pay the interest on the loan. Borrowers may, if they’d like, also pay more than the interest of the loan during this period, thus paying down the value of the loan and raising equity in the home. Aside from the size of the jumbo loan and the payments during the initial interest-only period, these loans are similar to traditional adjustable rate mortgages. Let’s take a deeper look at the different portions of this loan.
The First 10 Years
Since you’ll only have to pay the interest of the loan during the first 10 years of an interest-only, 10-year adjustable rate jumbo mortgage, you’ll be able to borrow a significant amount of money, and you’ll only be required to pay a bare minimum monthly payment. That’s great news for folks who’d like a bit more financial flexibility upfront. Since we provide both jumbo and super jumbo interest-only, 10-year ARMs, you’ll also have plenty of buying power. Our jumbo and super jumbo loans can amount anywhere from $424,100 to $10 million, for both primary residences and vacation homes.
The Remaining Term
After the first 10 years of an interest-only, 10-year adjustable rate jumbo mortgage, borrowers are required to begin paying back the value of the loan, as well as the interest on the loan. Since this loan type is an adjustable rate mortgage (or ARM), the interest on the remaining value of the loan will adjust according to an index. The index of ARMs adjusts based on a third party group that analyzes investments and the current market condition, including US Treasury securities. During the adjustable rate period, borrowers will be required to pay a fixed margin rate and the index rate for their loan. Only the index rate will adjust over the lifetime of a loan. In addition, ARMs have a capped interest rate, so if the index does rise, borrowers are protected from major spikes in interest. Inquire with your mortgage lender to learn about the fixed margin rate of your loan, the adjustable index rate, and the rate cap on your mortgage.
The Benefits of Our 10-Year Interest-Only Jumbo & Super Jumbo ARMs
Due to the initial interest-only period of these loans, these loans are especially attractive for borrowers that have just enough budget to purchase a home with a jumbo or super jumbo mortgage. These loans are also great for borrowers who would like to retain financial freedom during the initial 10 year period; since during this time, the borrower can pay as much as they’d like, or pay the bare minimum interest only amount. Interest only mortgages are the perfect option for homebuyers that are looking to purchase their dream home. If you’re curious about our interest-only jumbo and super jumbo ARMs, or any of our loan products, don’t hesitate to get in touch! We’re here to connect you with the perfect home loan to earn you your dream home.
Take note, we also offer 5 and 7-year fixed rate jumbo mortgages, as well as our 10-year fixed rate home loans, so you can select a loan with an initial interest-only period that suits your needs. Learn more about our interest only jumbo and super jumbo mortgages, or get started with a quote!