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South Florida

Interest-only loans cater to the rich

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Interest-only loans help borrowers free up cash and take advantage of tax benefits, but they have become rare since the financial crisis, available only to the wealthy because of tighter banking standards, according to the New York Times. The number of interest-only loans plummeted in 2010 after Freddie Mac stopped backing them because of big losses. The government’s decision caused many lenders to follow suit. The ones who still did offer the loans tightened their standards; today, the borrower is generally required to have at least 30 percent equity in a property and a FICO score of at least 720. [more]