I have been following this thread and I was not going to post anything, but I am changing my mind so I can put in my two cents. People have there opinions on what is best and that is great. What I feel compelled to say, which others have touched on, is that it is crazy to generalize a particular loan product as bad or good. As has been said before, everyones situation is different. Stat say that we Americans refinance our homes on average every 4 years. There are so many factors to choosing a loan that is right for you. Can you honestly say to yourself that once you get a 30 year mortgage you will NEVER refinance because your goal is to pay it off? For most the answer is no if they are being honest. Does this mean you should not get a 30 year fixed? I don't know. Again it would depend on your situation. For most homeowners, tapping your equity is the only answer for major repairs or maintenance on their homes. How many people can write a check for a new roof or remodel a kitchen or bath? From my experience, very few. This of course is a function of poor financial practices and income not keeping pace with the rising costs of EVERYTHING! No one can predict the future, but we can certainly make educated guesses. All these "crazy" loan programs have both benefited and hurt the real estate market. More people became homeowners then ever, and current homeowners saw amazing appreciation. This in turn created more demand and inflated prices to stupid levels. The market will correct itself and unfortunately some people will be hurt. By in lage, my feeling is that most will make it through and find a way. Remember, most of the short term fixed loans have annual and lifetime caps on the rates unlike most of the loans in the 80's! The lender has a vested interest in writing loans that people can pay. They are not in the business of owning homes. Also, increased equity is nothing more than increased leverage.
Sorry for the ramble....NUFF SAID!
Nice points. Deciding on a particular loan product can be confusing for most. Consider the one or two options that fit your situation and comfort level. There are tons of great options that weren't even available a few years back. Personally, I've really been diggin the pick-a-pay loan with 4 options built right into it.