MSN Money recently ran an article stating that interest only loans are bad choices for most borrowers. The headline ran as "Interest-only loans: not magic, usually not smart".
Then, the next line:
The last interest-only mortgage craze ended with a wave of foreclosures in the Great Depression. Today's interest-only ARMs are even riskier. Here's what to ask before you take that risk.
The author does a good job disclosing some of the risks inherent to interest only mortgages, but he avoids putting mortgages in the full context of a complete financial plan. As a result, the article is filled with fear-mongering instead of an actual education.
For example, the author warns of:
To address these issues, one-by-one:
It's only at the end of the article that the author briefly highlights the positives of interest only home loans and he nails it on the head.
In short, it comes down to discipline -- just like with any other mortgage product.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2017 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)