Tom
Laguna Hills,#2Consumer Suggestion
Wed, September 13, 2006
The loan you are talking about being offered the first time is called a neg-am loan. You recieve 4 payments options as follows: 1. Neg-AM / Deferred interest (your quoted loan) 2. Interest Only 3. 30 Year Term 4. 15 Year Term The problem with this loan is that you can recieve a neg-am payment option but you are qualified on the 30 year term loan. This is what it would look like. 400K Loan Amount Payment Rate: .5% Real Rate: 8.5% Payment: $1,192/mo Qualifying Payment: $3,075/mo If you can't qualify for a payment of $3,075 then the $1,192 payment is void and no longer valid along with the program. It is probably better for you anyway because on the Neg-AM payment you would be adding a balance to your home of roughly $1,200/mo. So in 5 years instead of oweing 400k you owe $472,000. This program is real and this rate and payment are real also, unfortunately, companies do tend to take advantage of borrowers not understanding. Best of luck in whatever you do.