They may be one of the richest couples in North America but Beyoncé and Jay-Z have reportedly bought a home in Los Angeles’ swanky Bel-Air neighbourhood with an interest-only mortgage.
The U$88 million estate was bought over the summer with a 40% downpayment, Business Insider says. The couple then arranged the interest-only home loan.
With a loan that starts low but increases when borrowers begin to pay off the principal, it can be a risky strategy, plus of course interest rates are now on the rise.
Interest-only loans have also been blamed for their role in the financial crisis and now make up only a small share of US mortgages.
However, with the couple estimated by Forbes to worth more than a billion dollars, there shouldn’t be too much for their lender to worry about!
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