[markbarnes19]

I keep hearing advertisements for interest-only mortgages. Now, as a former mortgage specialist, I understand them. However, they are advertised as helping people eliminate their mortgage more quickly, which doesn't make sense to me. Does anyone have a lone like this? How do you cut your mortgage? Just by adding to the principal each month?

[mcmama]

As a pro, you know how competitive the loan business is right now. A lot of people are getting loans that really make no financial sense for their objectives in getting them. I haven't heard the ads for people to use them to eliminate the mortgage more quickly. Some of the ads are very confusing if people are not clear about the process.

I have heard the commercials for interest free loans that offer to cut the monthly payment - look, you can afford this much more house! Right now they are great for the short term, but are risky for those who are getting them because if they stretch themselves they can get a bigger or better house than what they could normally afford.

What do the ads say? I would like to know the answer to this one too. Does someone know something we don't?

[MJ7]

We purposely got an interest only loan knowing full well what it is. We figured by maximizing our house we can buy in a booming market we could make a good investment. In 12 mo, we have almost $150,000 in equity because of where we live! The house we sold gained less percentage wise as it was smaller and lacked the ideal location. Our interest only will eventually start to contribute toward the principal and our payments will skyrocket. With uncertain interest rates, it's a bit scary, however, we counted on using this 3 year lock in we have to pay down most of our debt (we're doing good so far) and either refinancing or paying the higher rate. We are in the maximum size home we really need. We will most likely down size in price and pay capital gains in our next move preparing for retirement. We figure home prices are drasticly cheaper in a few cities we are concidering out of state and we'll have the house there close to paid off.

I think it takes a dicsaplined person to take certain risks with their mortgage. We've gone from only affording a home that was worth $100k 6 years ago to owning a home we couldn't afford in todays market, somewhere close to $500k. This is all with little income increase. and the accumulation of 2 expensive car payments.