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Go with 30 year fixed rate. 10-year interest only mortgage. Advantages -Lower monthly payment -Good for investments (meaning if you were buying a house to only sell it) Disadvantages - Majority of the time the money you owe does not decrease meaning you end my paying way more than you should. So if you take a loan for $300,000 dollars, 10 years from now you will still owe $300,000 dollars. You will be only paying the interest on the loan and after 10 years you will most likely have to take another 10 years interest rate loan only or you will end my finally going to a 30 years either way you will be screwd. So the loan you could of had payed of in 30 years will take you to pay 40 years or even more if you go with interest only. Ask your lender for more information.

by iWISH iWAS

3 years ago

Asker's Rating: 

Go for the 30 year. You'll gain equity and the 10 year interest only is not good.

by amandafofanda66- 3 years ago

NEVER NEVER go with an interest only mortgage. NEVER!!!

by ed201283- 3 years ago

Well, the payment is lower for the interest only right now, but it could go up. Which is tough if you're on a budget. 30-years are safer. I'm not a complete authority on it, so I'd consult a financial advisor.

by Bad Mother Clucker- 3 years ago

you ARE kidding right?????? this 10 year interest only is what is KILLING the housing market right now. What they do NOT tell you is that the principal occurs INTEREST thus you have to pay more on it when the time comes. Get a 30 year fixed and forget it.

by zyberianwarrior- 3 years ago

With the interest only loan at the end of ten years you will have no equity and still have to pay the loan off somehow. Yes the payments are lower but not by that much because a 30 year loan most of the first 4-5 years are interest anyhow. Go with the 30 yr. Make sure you shop around for the best deal. Good luck. If you are in the market for a mortgage, home equity loan, or refinance www ... has some great information. Find out how to get up to 4 FREE No Obligation Mortgage Rate Quotes. LEARN HOW you can save some serious money and get FREE Home Equity Loan Information at www ...

by Jackson- 3 years ago

This is a tough question, and bears thinking about. How long do you think you will live in this house? If a short time period, then I would say the interest only is a good option, due to the lower payment - but only if you are in an appreciating neighborhood. You can play it safe and do the 30 yr fixed rate with a higher payment as well, but are you single? married? How long do you think you will live in the house? What is your market like? appreciating? stable, depreciating? The best deal is leverage. Putting as little down as possible, write off the interest on your taxes, and move on. You should consult with your CPA, as well as with a good real estate consultant before you make your decision.

by Paula- 3 years ago

If you are the type who will only pay what is required, then go with the 30 yr. fixed, at least you will be paying down your principle. The interest only mortgage means just that, some of these loans do not require any principle payments, they will make you pay only interest and after 10 years you will still owe the same amount, whereas after 10 years on a 30 yr. fixed you will owe a great deal less on the house. Lower payments on the interest only, because you're only paying interest, not paying down the principle on your mortgage. 10 years is a looooong time to do that ;.)

by homzforU- 3 years ago

If you and your husband have ample income and think you can pay off the principal in 10 years then go for the interest only. If you are like most people that may not be realistic. The only reason that I would take an interest only would if I knew that I was going to sell and that I had ample income to pay off a great deal of the principal. Good luck No matter what is said here, it is your decision.

by Cynthia L- 3 years ago