Rough Road for Mortgages Ahead?

There is a great deal of concern about many of the Mortgages being done now and in the last couple of years. Interest-Only and ARMs are still being done in order to get the borrower into their "Dream" Home. Is this the best solution? No equity payoff with Interest-Only loans, along with a big increase in payment down the road after your ARM or Interest-Only loan adjusts can be a serious problem, especially if personal income does not increase along with that payment. In today's market you could actually end up owing more than the house is worth because of the over-inflated housing prices in many areas. The same logic can prove to be true with all of the 100 LTV loans being done. What LTV will they be next year? A borrower could easily be upside down on their home with a house that is now worth LESS than they paid for it. Now what happens if one of the borrowers lose their job or have to take a lower paying position? Will they walk away from the home of their "Dreams"? They might if it soon ends up a Nightmare. Many borrowers are buying more house than they can afford and may deeply regret it over the course of time. Think about the future, and be reasonable in your expectations. Buy what you can afford and include a down payment. If you cannot put down a modest down payment, can you really afford the house payment? This is just some food for thought. Everyone wants that home but they need to be realistic in what they can afford now, as well as in the future. That way, it will remain their "Dream" home for years to come.

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