[lbo-talk] frontiers of financial innovation

[Jordan Hayes]

> I love this phrase I just read in a letter to Business Week:
> "negative amortization variable-interest mortages with low teaser
> rates." I'm guessing that this means that in the early stages, your
> monthly payment doesn't even cover the interest, so the difference
> gets tacked on to the principal - and, should market interest rates
> rise, so will your mortgage payment. What are people thinking when
> they sign up for these things?

I had one in the early 90s for a while.  It was just the ticket.

You don't see the benefit?  I think it's clear.

In particular, it's a no-brainer when appreciation in the market is
higher than interest rates.  Ever take any math classes? :-)

/jordan