Lenders and mortgage businesses pushing low rate mortgages. Ads on the radio, print ads in the Business section of newspapers tell customers: 1 percent mortgages, $500K mortgage loans only $1,500/month, get into your dream house, etc. Above sounds very attractive to get a mortgage loans, but now with the adjustable rate much higher & value of houses declining, these people are defaulting! The default rates are rising, the financial institutions who made these loans are in trouble, but realtors are to blame. The radio ads don’t mention that the real rate gets added to the back of the loan every month, for example a $500k mortgage loan can end up being a $700k mortgage loan after a certain time because the interest is added to the end of the term instead of the beginning, that’s the reason why rate loans are low in the first place! Mortgage loan is the generic term for a loan secured by a mortgage on real property; the “mortgage” refers to the legal security, but the terms are often used interchangeably to refer to the mortgage loan. Mortgage loans generally refer to a loan secured by residential property, often for the purpose of acquiring the residence. Mortgage loans may be lower priced than other forms of borrowing because the value of the property reduces risk for the lender. There are many benefits of Mortgage Loans. Home owners get into their house they always dreamed of today, but what happens in five years from now, when the adjustable rates starts? Maybe they have to sell their home lower than what they paid for it and owe more than they think! There are lenders who explain this to customers at time of closing, but those things are often not explained in their radio ads, print ads, etc. Lenders try to close the deal from there! LendAdvisors.com - Blog that helps you with Real Estate, Mortgages & Refinance. Source: http://www.lendadvisors.com/2007/03/08/low-rate-loans-may-hide-mortgage-interest-rate-bomb/