Interest-Only Mortgages Are a Bad Deal

rg1570

Here's how it works: Say a home buyer opts for an interest-only loan at 1.5 percent. On a 30-year loan of $100,000, the buyer would owe $125.00 in interest at the time of his first payment. But say the "real" interest rate is more like 6 percent, or $500.00 at the time of the first payment. The difference, or $375.00, would be tacked on to the principal of the loan, so that in a month the balance of the loan would be $100,375.00!

Interest-only loans never get paid off - at least not by making the scheduled monthly payments. Many of them are combined with balloon payments which are either paid off or converted to a more traditional mortgage at a later date.


no middlemen mortgage lenders
http://benchmarklending-mortgage.blogspot.com/

Ian_W

:spam: :spam: :spam: :spam: = Reported.

Woby_Tide

interest only loans never get paid off!

Ladies and gentlemen, Sherlock Holmes has entered the arena.....

dunstonh

I know you lot enjoy a good whinge about brokers in this country but look at the crap you get in the US and realise that its not all bad over here.

rg1570

An interest-only mortgage is enticing; the low monthly payments make it possible for people to buy a home who otherwise could not afford one, and it allows people to buy bigger and better homes than they could with a conventional mortgage.

But the reality is that with the real estate boom slowing down, the interest-only loan isn't the great opportunity is seems to be; it's actually a big, expensive, messy time bomb, waiting to explode.


http://benchmarklending-mortgage.blogspot.com/

poopscoop

Woby_Tide wrote:

interest only loans never get paid off!

Ladies and gentlemen, Sherlock Holmes has entered the arena.....

Someone give him a Blue Peter badge :rotfl:

Woby_Tide

rg1570 wrote:

An interest-only mortgage is enticing; the low monthly payments make it possible for people to buy a home who otherwise could not afford one, and it allows people to buy bigger and better homes than they could with a conventional mortgage.

But the reality is that with the real estate boom slowing down, the interest-only loan isn't the great opportunity is seems to be; it's actually a big, expensive, messy time bomb, waiting to explode.


http://numpty-mortgage.blogspot.com/

Does your manager know what a complete numpty he has in charge of his spamming operation? Theres only one thing worse than a spammer and that's a clueless spammer wasting time spamming the wrong country


Maybe todays blog could be

"Spammed the wrong country, how much of a muppet do I feel. Had a burger to make myself feel better. Spammed the right country in the afternoon. I think I may get a bonus soon. Go team!"

meanmachine_2

If you think American IO deals are bad, I have a friend, who signed up to a 1.8% IO mortgage, and is now locked onto the bank's SVR for...FIVE YEARS.

The ERC? Oh, a mere 8% of the original loan.

No, I couldn't believe it either.

By the way, on an unrelated note, was watching an old episode of Ellen yesterday (no, don't know why), and apparently she has a 30 year fix @ 7.1%.

Pricey.

Fancy tying in for that long. Those crazy yanks.