Watch out for creative financing. Today’s mortgage market has proved to be very tough and only appears to be getting tougher. Unfortunately in markets like this, many mortgage brokers and mortgage companies introduce a variety of expensive mortgage products that are simply unsuitable for many borrowers.
Option ARM/Pick-a-Pay
As rates begin to creep up, option ARMs and Pick-a-Pay loans will become the product of choice for many brokers to push. These products allow the borrower to choose how much they would like to pay during any given month, with some very low minimum payment requirement. These loans allow many people who could not ordinarily afford to make payments on a home to make interest-only payments or payments significantly below the standard principal amortization plus interest payments.
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