Thursday, August 31, 2006

Payment shock for non-traditional mortgages

'Exotic' mortgages seen losing their allure

In order to get the $800,000 house he bought early last year in California’s Silicon Valley, Joe got an “option ARM,” an adjustable-rate loan that lets him choose from a variety of payments every month. The smallest payment included no principal and less than 100 percent of the interest due. The unpaid interest was tacked onto the principal, creating “negative amortization.”

Posted by aris @ 08:38 AM (17 views)
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