As the cost of houses continues to increase, fewer people are able to afford them. Many creditors have responded to this situation by creating a new class of mortgages that are quite risky. A large number of people have begun getting these mortgages, and the payments are generally low when you first get the loan. In this article I will discuss these mortgages in detail, and what you should know about them.
Option Payment Mortgage
The most risky mortgage option available today is the Option Payment Mortgage. With this mortgage you decide how much you want to pay each month. You can pay either the principle, interest, or minimum amount allowed by the creditor. The danger with this type of mortgage is that you could end up paying more money than your home is worth. Those who fee that they are responsible with their personal finance should only use this mortgage.
The second type of risky mortgage is the Interest Only Mortgage. As the name implies, this is a mortgage with which the borrower pays interest on the loan for a set number of years. This could be ten years, and at the end of the ten years the borrower would begin making payments on...