No money down and interest only loans becoming more common

The National Association of Realtors reports that 43% of first time homebuyers purchased their homes with no money down in the last quarter of 2005.

Meanwhile, out in California, which includes the top four least affordable home markets in America (LA, San Diego, Santa Ana and San Francisco) 60% of all mortgages written last year were interest-only, usually for first five years. That means no payments to principle. If prices drop, so will equity.

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