Short-term owners consider unique real estate loan

Pros and cons of interest-only mortgages

DEAR BOB: We are thinking about refinancing our home loan, which has a 6.75 percent interest rate. The mortgage broker who made us our loan several years ago offers an "interest only" mortgage at 5.75 percent guaranteed for five years with no closing costs. As we plan to sell our home in three or four years, is this a "good deal?" – Ron R. DEAR RON: The big advantage of an interest-only home loan is 100 percent of your monthly payment is tax-deductible interest. Another advantage is your payment is as low as it can go at that interest rate. Purchase Bob Bruss reports online. The reason, of course, is there is no mortgage amortization or balance pay down. If you expect to sell your home in a few years, mortgage balance reduction is probably of zero concern to you. However, if you expected to stay in your home "forever," then a zero-interest mortgage might not be a smart decision because you will never own your home free and clear with no mortgage. OLDER HOMEOWNER SUGGESTS B...