Those Bills Will Come Due Much Faster Than The Interest Only Loan Collector

Category: Finance, Real Estate.

Exploding growth in the mortgage loan segment has put the interest only loan in a huge category all it s own. That kind of growth is almost frightening to even the most experienced lender.

Up from the first part of the century, the interest only loan is now cornering a near one- fourth of the mortgage loan market. The benefit of the interest only loan is that the consumer is eligible to buy a much bigger house, than with a standard mortgage. The interest only loan and the bigger house are great, if you re certain in a given period of time that you ll be able to afford a higher mortgage payment. Can you imagine the possibilities say four to five years from now, when many of these loans come due in paying the interest and the principal, if our economy isn t still a thriving bustling place? But is anything guaranteed and given in this day and time? Those bills will come due much faster than the interest only loan collector.

The home owner that borrows with the interest only loan to be able to afford the bigger house has a bigger problem than just a mortgage note that may be beyond their means to pay, they generally live beyond their means elsewhere. The borrower that uses the interest only loan as a way to bridge the gap between my tomorrow salary, and the reality of today s salary, will probably still have this same habit, when tomorrow s salary becomes today s. Most of the interest only loan borrowers don t fall into this market segment. This idea is great, if you happen to be a young professional with a great future, and you work for a company that s willing to buy your home at the end of 5 years, when you re ready to move up the corporate ladder, but these deals are few and far between. They re in the one that will be trying to find a way to pay a huge mortgage payment in about 5 years. You just need to make sure before you step onto the dream cloud, that you ve got a net beneath you! The big house, and the great, the picket fence job are wonderful goals and dreams to have.

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