Beside Concho remarks “interest only” are good as a source of “cheap capital” at the right times for the right people. Basic requirements for it to be a “good loan” are that the borrower be in an extremely good equity position and have a good plan for using the capital, hopefully a nearly fool proof business plan or investment and even better an exit strategy to cover. What is even better about “interest only” is that some come with a decent teaser rate. Old school was that only people who could demonstrate that they meet the kinds of parameters I am describing could get them . Let’s hope they stay available.
