Refinancing to an interest-only loan is a good choice for anyone looking to make their money work harder for them. For instance, making interest-only payments and putting the difference into an investment which brings a higher rate of return. Traditional mortgages offer no such option. That's something to think about if you're not maximizing your yearly 401(k) and IRA contributions.
But there are other things you can do with the extra cash you can have every month:
You could pay down high-interest credit card debt.
Save for your children's college tuition.
Buy or lease a second family vehicle.
Increase your home's value by making home improvements.
Set aside money for a rainy day.
Depending on your existing loan balance , refinancing to an interest-only loan could get you access to thousands of dollars over the course of several years to put to use as you think best.
Interest-only refinancing may also be a good option for people who expect move again before the end of the interest-only period of their home loan.
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