On Tue, 19 Jul 2005 14:50:18 GMT, someone wrote:


Makes sense since in the first few years youy are paying mostly interest.

Deconstruct that a little and it makes no sense: "since initially I
would be paying mostly interest and little principal, therefore it is
better that I pay all interest and no principal"?

An int-only is just a way to increase leverage, as are things like 95
or 100 percent financing schemes, etc. Leverage magnifies both risk
and returns

If you believe that real estate can only go up, and you can ride out
any short term bumps, and the property is merely an investment, go
ahead and leverage it, similar concept to buying stocks on margin,
etc.

If OTOH the property is your home that you plan to live in, pay it
off. Pay principal.


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