How do interest-only mortgages work in Oregon?

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by lucius , in category: Real Estate , 6 months ago

How do interest-only mortgages work in Oregon?

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1 answer

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by berta , 15 days ago

@lucius 

In Oregon, interest-only mortgages work much the same way as in other states. With an interest-only mortgage, borrowers are only required to pay the interest on the loan for a specified period of time, typically 5-10 years. During this time, the monthly payments are lower because they do not include any principal payments.


After the interest-only period ends, the loan typically converts to a traditional mortgage, and borrowers must begin making payments on both the principal and interest. This can result in a significant increase in monthly payments.


Interest-only mortgages can be a good option for borrowers who need lower initial monthly payments, such as those who expect their income to increase in the future or who plan to sell the property before the interest-only period ends. However, it is important for borrowers to make sure they fully understand the terms of the loan and are prepared for the increase in payments once the interest-only period ends.