Wednesday, May 25, 2005
" Interest Only" Loans
I find myself completely losing faith in my fellow man. Who are the people out there who are stupid enough to take out one of these interest only loans? Don't they realize that they are doing little (or nothing) to pay off the principle of the loan? You could pay on one of these things for decades and still owe the same amount. Worse yet, many of them are adjustable on the interest rate. That means the rate will surely go up in the future. The companies offering these items must be smiling all the way to the Bank (if they aren't one) and counting on doing it for many years to come. I wonder if there is a penalty for paying it off? Wouldn't suprise me. The people that sign up for this torture are probably the same ones carrying the big credit card balances. I heard the average balance is around $16k! I owe nothing on mine, so which of you is offsetting me? Do you owe 20k or more? Do you realize how stupid that is?
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4 comments:
Actually, Rock, the interest only loan can be a wise choice if (1)you don't plan on living in your home for more than four years or so; and (2) you live in an area in which you can be reasonably sure your home will appreciate in value over the next four years or so. I think it can be a good idea under those circumstances.
Okay Abe. There might be a few people whom could use these monsters without getting burned, but I'd never do it. Most think the home market has hit its top. Tell me what happens if your home's value goes down...
So many blogs and only 10 numbers to rate them. I'll have to give you a 9 because you have a quailty topic.
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I finally had to resort to moderating comments since so many fly by night outfits look to put up links to their outrageous loan offers on this post. Apparently, some of you will actually sign on to a loan with 99.75% interest rates. I feel for anyone that stupid. Go visit fair lenders, not these sharks.
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