Hedge Unit: Interest + principal Speculative Unit: Interest only payments w/ a balloon principal payment at the end 2/28 Ponzi unit: teaser rate for two years w/ full interest payments optional , then reset to a high interest rate. are full interest payments still optional after the two years? also, is this type of mortgage also all interest payments and then a balloon payment at the end? thanks.
high interest rate. are full interest payments still optional after the two years - I believe so not sure. also, is this type of mortgage also all interest payments and then a balloon payment at the end? - only if the prices of the house keeps going up.
so under speculative the buyer will continue paying even if property values go down (but will STOP paying if interest rates go down? and under ponzi, if either interest rates or property values (emphasis on property values) go down, he will stop paying this is kind of my understanding on this.