Just in case there weren’t enough loan options for buyers who want to artificially afford artificially expensive homes in a housing market made artificially high by the use of a plethora of other exotic loan products, make way for the 50 year amortizing 5/1 ARM loan!
This normally amortizing loan has a lower fixed interest rate for the first 5 years, then it can adjust annually for the remaining 45 years.
Apparently, this option would be best for those who don’t feel comfortable with an interest only or negative amortization loan option but still like the feel of something a little bloated and crazy.
A small catch though... buyers will have to put at least 5% down… wow 5%!! Well… at least until they formulate the 50 year blended option!! whopee!!
So goes the vicious cycle of distorted loans distorting the market... requiring further distorted loans… etc. etc. … onward and upward?
I wonder how many poor bastards will rationalize getting into one of these loans on the premise that they could always re-finance or sell the property within the 5 year fixed rate period.
Oh well, just another one for the history books I guess…