Wall Street Journal
It appears, doctors, that more folksare choosing the alternative route when itcomes to home mortgages. According toa recent article in the ,today's homebuyers are passing up conventionalfixed-rate mortgages for eitheran interest-only or adjustable-rate mortgage(ARM). For example, the articlepoints out that during the first 2 monthsof 2005, 61% of mortgages taken out byCalifornians were interest-only loans; in2002, that figure was less than 2%. Sowhat's influencing homebuyers to go thealternate route? Because both types ofloans carry lower initial monthly payments,borrowers are able to purchasehomes they wouldn't qualify for with afixed-rate mortgage. Despite the opportunityARMs and interest-only mortgagesoffer those in the market for a moreexpensive home, going the alternativeroute isn't always a smart move. In fact,some mortgage analysts predict that therecent popularity of these loans willresult in more foreclosures, as well asother market and economic problems.