Credit Sharks

Merleism: The more confident your local TV weather person is in forecasting an unusual weather event, the more like he or she is to be wrong. Our wacky, quirky weather guys and gals all got a memo from the National Weather Service about an approaching winter storm, that was likely to cause colder than normal temperatures and rain or snow, depending on where in the area you live. The memo became the basis for weather stories on the five o'clock news reports, with the weather reporters putting their own distinctive style on them. We were told that the temperatures would be the lowest in many years and the the rain would be heavy and the snow deep, especially in the mountains. We have had cool, not cold temperatures and sporadic light rain thus far. We are like the travelers stuck in Denver last month. Despite bold predictions, each passing day turned out not to be the day they were hoping for. Each day since the original forecast, the gravity of the situation has been downgraded on the TV weather segments. The two foot accumulation of snow in the mountains became one foot and the then a few inches. Our heavy rain was pushed back day by day. We are still waiting. In other news, I was talking to someone today who was thinking about getting an interest-only home loan. Let me repeat that, an interest-only home loan. A loan that no matter how long you pay on it, the balance never goes down. . My friend had been taking to a guy who was trying to convince her that there were some very good reasons, smart reasons, savvy reasons, sophisticated reason, to take out this loan. Despite his slick sales pitch, the reality is that there is no good reason for the average person to take out an interest-only loan. there are reasons they do so, but there are no good reasons. This is a terrible product for the average person because sometime, sooner or later, you will have to deal with the principal balance of the loan. Either through higher payments or through refinance. If interest rates are high or you have less income at that point, you have a potentially a serious problem. These mortgage guys tell you that real estate values always go up, so you are building equity anyway, through rising home prices. Of course, sometimes there is a drop in prices, like in most parts of the country right now. So I told my friend that she was heading down a dangerous path. I hope she listens. I think she will. Things in this blog represented to be fact, may or may not actually be true. The writer is frequently wrong, sometimes just full of it, but always judgemental and cranky Tag: Daily Life Personal Finance Humor