Who should get a flex pay mortgage loan?

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So my husband and I have found a home that we really love but its out of our price range at the current moment. I have a job in September on hold when I graduate from college and we will be able to afford the house then, but it will probably be gone. My question is should we get one of those Flex pay loans for now that allow us to pick the certain payment or are these loans a scam?

3 Comments
  1. Reply
    Rush is a band
    February 9, 2011 at 2:43 pm

    Those loans are generally gone. They are certainly gone if you also don’t have a down payment.

    The reason they are gone is that they were too high risk for the average person to correctly handle. The minimum payment didn’t even cover the interest (negative amortization) and the owed balance grew every month. That might have been OK when the underlying asset was increasing in value by 10-20% a year, but as soon as house appreciation stopped, these mortgages were a disaster waiting to happen.

    Without a work history you won’t get a loan anyway. You have a promise of a job in September, but I have personally seen companies rescind offers when the economy gets tough.

    You would really be better off (financially anyway) waiting until you can truly afford it. I know it’s not what you want to do, but part of being a responsible adult is doing the things you don’t want to do.

    good luck!

    ps – I can’t really think of anyone who should get a flex pay mortgage loan except maybe someone who’s income is very seasonal or heavily bonus dependent. Then they should have a large downpayment and have the discipline to pay down the loan on a regular schedule.

  2. Reply
    golferwhoworks
    February 9, 2011 at 2:52 pm

    pick a payment loans are all gone now. The only loan you may get is an arm but the rates are very close to fixed

  3. Reply
    HEATHER
    February 9, 2011 at 3:30 pm

    Do not buy a house that is out of your price range at the moment. A lot of things can go wrong between now and September. You will find another house you love when the time is right.

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