Mortgage Glossary
Interest-Only Period
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
An interest-only period is a stretch at the start of a loan when the borrower pays only interest, with no principal, keeping payments lower.
What Interest-Only Period means
During this period the balance does not shrink. When it ends, payments rise to cover principal over the remaining term. These loans suit borrowers expecting higher future income or short ownership.
Florida example
A self-employed buyer used a loan with a 10-year interest-only period on a Miami condo, keeping early payments low before principal payments began.
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