The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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From: CalculatedRisk	7/24/2005 12:44:26 PM
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Interest-only loans offer payment shock down the road northjersey.com Almost one year after they purchased a Hoboken condo, Dana Defonte and Michael Olin haven't paid off a penny of the principal. "We wanted to keep our monthly payments down," said Defonte, a copywriter. So the couple took an interest-only mortgage, an increasingly common type of financing that allows borrowers to postpone principal payments. In their case, monthly payments are about $150 lower than they would be with a conventional mortgage - for now. But today's low payments come at the cost of higher payments later, when borrowers will have to start paying off the principal. Defonte and Olin aren't worried about payment shock, in part because they expect to sell their condo before 2009, when they are obligated to start making payments on the principal. <MORE IN ARTICLE> MY COMMENT: They will sell before the payments go up ... just like everyone else! ROFLOL.

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