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Pros, cons of interest-only mortgages

Tax-deductible interest a plus for short-term owners

DEAR BOB: My wife and I missed the mortgage refinancing "boat." We thought interest rates would drop further. Instead, they went up. But a mortgage broker friend suggests we instead get one of the new "interest-only" mortgages to keep our payments down. He showed us how our monthly payment will be less than if we refinance with an amortized mortgage. What do you think about the new interest-only mortgages? – Thomas V. DEAR THOMAS: I especially like interest-only mortgages for investment properties, such as rental houses and apartments. The reasons include (1) minimum monthly mortgage payments; (2) the entire payment is tax-deductible interest; and (3) the low payment maximizes cash flow from the rental property. Purchase Bob Bruss reports online. But your situation as a homeowner is a bit different. If you plan to stay in your home a long time, you probably want to build equity and eventually own the home free and clear when you are a retired "old geezer." However, if you an...

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