I hear many people speak about those bad "interest only loans". These loans were and continue to have a very bad name.  Even some very famed people in real estate have a misconception about these loans. 
It's not the "interest only" part that is bad.

Let me explain.
A regular conventional 30 year mortgage is composed of two elements, the interest and the principal.  So each month a portion of the payment is allocated to the interest and a portion to the principal.  The principal is always a very small part.  An interest only loan is one where you pay the interest only and no principal.  In essence you get to choose if you pay principal or not.  On a $250,000, 30 year loan at 6.75% your (PI) payment is $1,621.50 of which in the first year. $2,665 is principal and $16,794 is interest.  With an interest only loan you would eliminate the need to pay the $2,665 in principal.  You could if you wanted.  That is the power of an interest only loan, you have a choice, you control your finances.  If you could earn more than 6.75% on that money, why would you pay down the principal?

This loan got a bad wrap because it was usually associated with adjustable rates.  The adjustable rates gave these loan s a bad name, not the "interest only" part.  You can get 5 year, 7 year and 10 year fixed loans. 
"Interest only" loans are a great tool with little risk.  The biggest risk is that the money you don't pay into principal, you'll spend on a TV or a Vacation instead of investing it.