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Exotic Mortgages - I owe what?

By
Real Estate Agent with KW Fayetteville

Most home buyers don't fully understand the risks associated with taking on alternative type mortgages that allow interest-only payments or negative amortization. You may have seen or heard the ads for Quicken Loans or similar, just know this, with some of these loans the payments are really low but after several years of payments you may owe more on the house than when you bought it. Many people over the last few years signed up for such loans thinking property appreciation would keep them out of trouble. Many of those people are in over their heads right now.

I may be too old fashioned or even simplistic but I feel that when rates are low most people are best served with a fixed rate. If the payments are more than you can handle then you should probably get a cheaper house or wait until you have some down-payment saved. I could write pages, but again, I like to keep it simple.

Paul Jerome
Seller Helps Buyer - Clearwater, FL

Yes, we're back to full doc and budgeting.  Good post Ron!

The Option ARM really only has two options. 

(1) keep your house, or (2) foreclosure

Aug 06, 2007 12:00 PM
JEROME G
White Plains, NY
Ron..those who have been simplsitic and conservative are the ones who are not in foreclosure.
Aug 06, 2007 12:00 PM