"Free Money" Is Not A "Bad Day At The Races"
The NCTimes wants to help borrowers with the array of borrowing options. "There are other strategies for lowering monthly payments or increasing total borrowing ability, and those strategies rely on mortgage products that were not even available to most purchasers as recently as a decade ago, according to Doug Perry, of Countrywide Home Loans."
"'Home values and purchase prices have gone up so tremendously, it's led to a number of products to assist consumers to be able to buy and to provide flexible options so they can afford what they buy,' Perry said."
"When Paul Espinoza decided to refinance the home he owns he decided to go with an interest-only package in order to reduce his monthly payment. What he didn't know at the time he signed his refinancing documents was that his principal amount would continue to climb. 'The cost to you is really the amount that the principal goes up over the period of the loan,' said Espinoza who felt that he wasn't made fully aware of that possibility by his lender when he arranged for the new deal. 'I'm curious why this isn't mentioned by loan officers?'"
"Rob McNelis, president of the California Association of Mortgage Brokers' San Diego chapter said, 'We've all known this rapid price appreciation is unsustainable. Historically, the real rate of home price appreciation is around 3 to 3.5 percent; not a bad day at the races when you realize it's free money.'"