The Road Less Traveled to the Right House
We live in a good housing market here in NC, where you can get nice affordable suburban homes for great prices. A few years ago when we first started looking to buy, our eyes where on a couple of sweet party shacks. Three floor townhomes with lower floor party rooms, mid floor social areas, and upper floor private bedrooms. The ones we looked at were from $220-$360K. Not bad at all.
Still, we started to notice lots of curious signs for “interest only” loans in the communities we looked at. Builders were aligned with mortgage companies to offer mortgages that would immediately put buyers at a disadvantage, having them pay no principle and only interest. These loans allowed buyers to get into larger and more expensive homes than they normally would be able to afford, but when the interest only portion of their loans expired trouble might ensue. Like adjustable rate mortgages, there was a time clock ticking on these loans. Buyers weren’t thinking that they wouldn’t be able to afford the adjusted loan payments down the road. Many thought they would enjoy their party shacks and sell them before the party ended — never anticipating what happened with our economy. When people started pointing fingers at the mortgage industry, minorities and the poor were seen as the catalyst for the housing crash. I sat and remembered all of the middle and upper class suburbanites (like myself) of all races, who were clambering after those party shacks, considering taking those risky loans and potentially defaulting on them. Read more…
