These past years,California realestate prices have gone up through the roof and most people I know got into these very overpriced homes with "creative"
financing. Here is an example...the unexperienced first or second time buyer finds the house of their dreams wwaaayyyy over budget,,BUT..ah..there are magic loaning companies who will get you into this dream house benefiting the loan company-not the buyers. With a little trick called the(ajustible)low rate 5 year loan that the buyer can handle,(for their first 5 years),,,,but wait!!! What happends after 5 years????? The sale has gon through,,people have made their commitions and walked away with a fat billfold and a celebratory dinner...all the while the buyer is sitting in the new mansion wondering how they could ever afford this gem of a home....WRONG!!!!! Buyers, what do you think is going to happen in 5 years? Your loan rate will now jump and increase sky high!!!!!!!!! You may not be able to afford your dream house afterall,,because the morgage is going to keep on getting more expensive and hopefully your paychecks will be able to keep up with this scam. Finally...and...so sad later..you might want to be informed of a heartbreakening word called.....Forclosure
or sell your dream home and come out with less than you put in.
This kind of trickery is so sad on buyers that would do anything for their dreamhouse and the sellers/loaners play on the buyers emotions because, at the end of the day, its the buyers that have to worry about being able to financially
keep the dream home and the loaners are looking to make another buck without the care of the last buyer that will most likely move out of the house of their dreams...I call that sad.
So in closing, this example will be one of the reasons why we will be seeing foreclosed property every where!!!! Especially in Southern Calif where a small plain home is at least $500,000 in a shabby neighborhood.