[Rick Lee]

Wayne, you're assuming your landlord bought the house with 100% financing on a 30 yr. fixed loan. There's no more expensive way to do it and it's even more expensive if he was honest and disclosed that it was an investment property. You could own that house for far less per month. The avg. life of a 30 yr. fixed loan is seven yrs. How many people your age and younger do you know who honestly think they'll stay in the same house for 30 yrs.? Probably none. And even if you were 110% sure you'd never move, chances are very high you'd be refinancing or tapping equity at some point down the road. Get an ARM.

If you can afford a decent down payment and have big bonuses or cash windfalls coming once or twice a year, an I/O loan, MTA or option ARM can be good products. The problem with those loans is that they are going to mostly unsophisticated borrowers who only look at the min. monthly payment, ignore the neg. amort. and don't invest the money they save by making the minium payment. I heard even Alan Greenspan has an MTA on his own house. Those are only sucker loans for people who believe in a free lunch.