Once you’ve found the right interest only jumbo or super jumbo mortgage for your home, you may be curious as to the best plan to pay off your loan. While you can pay off the loan by paying the normal payments on your bill, it may be more profitable to pay off your loan strategically over its lifetime. You can take advantage of the perks of an interest only mortgage by planning out your payments as the loan changes.
During The Initial Interest-Only Period
Interest only jumbo and super jumbo loans offer the unique benefit that there is a five- to ten-year period of mortgage payments that require that the borrower only has to pay interest on the loan. During this period, your monthly mortgage bill will remain staggeringly low for the size of the loan (remember, jumbo mortgages can be between $400,000 and $650,000, while super jumbo mortgages exceed $650,000). Take advantage of this interest-only period if you plan on paying off your loan quickly. During this initial period, some clients find it profitable to place their income into other investments instead of investing in the equity of their home by paying off principal. If you can make more money by investing your income elsewhere, go ahead!
That said, you’ll want to be prepared for your principal- and interest-payment period. During this period, your monthly mortgage bill will take a significant leap. Be sure to have sufficient savings and/or income to cover your bill during this period.
During The Remaining Principal & Interest Period
Since your monthly bills will rise sharply after the initial interest-only period, you may opt to pay off all or a significant portion of your home loan immediately after that period has ended. Some borrowers opt to save up funds, invest them as they’d like, and then pull those invested funds out to pay down their home loan. Or, you may opt to compile some income to pay down a major chunk of your principal. In these ways, interest only jumbo and super jumbo mortgage loans are ideal for individuals who have high-return investments and high income.
If you’re curious about utilizing a jumbo or super jumbo mortgage to gain financial freedom, you can call MortgageBase. We’re here to connect you with premium home loans and competitive mortgage rates. Get the home you dream of and the freedom you desire with an interest only jumbo mortgage loan from MortgageBase.