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To: Ilaine who wrote (117047)	5/30/2005 6:37:41 AM
From: John Carragher	Read Replies (1) \| Respond to of 793745

this type loan has been around for at least five years. My son had one to get into his first house. interest only loan, no equity, no down payment. just pay closing costs. this is a very dangerous loan as variable rate and if market price for housing comes down they are paying interest on a loan that is higher than the value of the home they are in. they can just walk away from the loan.. this will be the case with the speculation loans now in dc. sf. florida. the hot markets could get hurt bad ... if rates rise much again these people may not have cash flow to meet the monthly interest only payments and have to walk away. as to too much equity in homes. i agree with you to a point. i have always carried a mortgage and still do for the next 15 fifteen years. None of my friends carry a mortgage! they all have mortgages paid up for retirement or earlier. It was scary when market was crashing a few years ago and i still had a huge monthly payment to meet with no earned or fixed income coming in. i have refinanced since three times and monthly amount is very manageable and a great tax deduction. Only a few will carry mortgages and those are folks who itemize tax deductions or follow value of cash.