Both mortgage professionals and real estate agents need to do more to educate consumers on loan products. Interest only loans are not always bad but if they are used to buy a home that the buyer can not afford they can lead to foreclosure.
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Interest only mortgages can definately be a nightmare if used for the purpose of making a home you can’t afford magically affordable. While they are definately a ligitiment option for some scenerio’s, those scenerio’s are few and far between. While it is also certain that some of these loans are created through misinformation, or the lack of information all together, it’s also become a common excuse for borrowers once they find themselves in a bad situation to blame the lender. It’s an easy scapegoat, but it generally doesnt help their situation, nor does it help real estate markets in general.
Great blog keep up the information.
-Tommie
Awesome! Love these videos!
The link didn’t work for me? I totally agree with Tommie. People can have short memories and too conveniently forget what their lender told them about adjustments at the end of the interest only term. However, should the lender be approving these loans when it is obviously the person can afford the payment today, but not tomorrow?
On the other hand, I have used these loan products for real estate investments, and they have been an excellent choice for my needs. Good product when used wisely.