$80,000 Extra Interest Is "Godsend"

You may recall that the California Housing Finance Agency bank rolled out the Interest Only Plus loan for qualified first time home buyers. Mr. Broderick Perkins at Realty Times has a write up on it that comes up with some hard numbers.

"Nothing down, five years of interest-only payments and a low fixed interest rate of 5.25 percent (as of this printing) that doesn't change for the life of the loan..Ken Giebel, at CalHFA, says you'd pay about $79,000 more in interest over the life of the CalHFA loan compared to a conventional mortgages."

"It's continuing evidence that lenders and government agencies will do whatever it takes to spur the housing market and allow more people to become home buyers and help the economy," said Rick Pelleriti, a mortgage planner.'It's certainly something I'd recommend to some of my clients.'"