Interest only loan pros and cons

[Khandbari Rai]

I am trying to get interest only loan to scale my portfolio and increase my cash flow. I would refi later . Looking for some inputs. Thanks

[Robin Simon]

Quote from @Nathan Frost:

Quote from @Dave Skow:

@Khandbari Rai pros- you can make a  smaller  payment ( the Int ony  payment ) for  up to 10 yrs    ...cons - the rate for this program is slightly higher than regular amortizing loan ...if you make the min payment - your loan balance  will not move  down at all  over  10 yrs  -  the lender  uses the  full amortizing  payment for qualifying  ...at the end of 10 yrs - the lender will change the payment to a  fully amortizing payment for the  remaining balance over the  remainder of the loan term ( likely to be 20 yrs)

 Is it more cash flow though?  Still have taxes due in December and insurance payments.  Where is the more cash flow?

 Its generally going to be more cash flow for the first 10 years with no principal payment due - that flips in year 10+ to less cash flow (but most people assume refinanced by then + rents will have likely increased).

Property Taxes / Insurance irrelevant here because they will be the same whether you do fully amortizing or interest only