Homeowners using ARM and IO loans

Posted Jun 6th 2005 8:10AM by Richard Nacht

In a survey conducted by the Mortgage Bankers Association it was revealed that adjustable rate and interest only loans accounted for 63% of all loans originated in the second half of 2004.

Also, San Francisco's LoanPerformance has announced that 25% of buyers nationwide are taking interest only loans.

Here's how one lender recently advertised interest-only loans: "You won't build equity in your home during the interest-only period, but it could help you afford to buy the home you want instead of settling for the home you can afford."

But for how long?

Reader Comments

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1. Hello!

In my opinion it's better to pay the rate and the interest of one loan instead of payng the rent.At least you will know that some day, a certain day that house will be yours.

www.my-mortgage-loans.com

Posted at 6:29AM on Dec 19th 2005 by Alexia Jones

2. I have to agree with Alexia, when possible always go fully amortized for a personal home, but if you can't its still far better to get an interest only than pay rent. You can gain appreciation on the property and you will have a really nice tax right off for the interest payment.

Posted at 6:29AM on Dec 19th 2005 by rj

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