why do an interest only loan.

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summarizes the video
There are some good reasons to do an interest only loan. Over the last 5 years a lot of people did them to have the lowest passable monthly payment. That is one reason but not the main reason why an interest only loan was created. Here are the reasons why I recommend and interest only loan to people.
First with an interest only loan it gives you the advantage if making large deposits to your principle balance and lowering your monthly payment. Here is a good example of what I mean. You own a home that hasn’t sold yet. When it sells you’ll make a nice profit from it. You have to go to settlement on the home you want to buy before hand. If you do a non interest only loan when you sell your current house and use those net proceeds on the house you just bought. Your monthly payment will be the same. It just lowers you balance you’ll still have a high payment. With interest only anytime in the interest only period you can make a payment towards your principle balance and it will lower your monthly payment.
Each month your monthly payment is calculated on what the outstanding balance is on the loan. Depending on the length of your interest only period it will give you time to either refinance sell the house before the arm adjusts. That depends on your circumstances. This is the main reason for the interest only loan. It depends on what your needs are and that is what a good loan office is suppose to do find out what is the best loan for the customer.
Finally after giving an explanation of the interest only loan it’s the customer’s decision. Some people don’t want anything that might adjust at any time and will be happy to keep there mortgage payment the way it is even if they put a sizable payment to lower there balance.