Exploding growth in the mortgage loan segment has put the interest only loan in a huge category all its own. Up from the first part of the century, the interest only loan is now cornering a near one-fourth of the mortgage loan market. That kind of growth is almost frightening to even the most experienced lender. The benefit of the interest only loan is that the consumer is eligible to buy a much bigger house, than with a standard mortgage. Can you imagine the possibilities say four to five years from now, when many of these loans come due in paying the interest and the principal, if our economy isnt still a thriving bustling place?

The interest only loan and the bigger house are great, if youre certain in a given period of time that youll be able to afford a higher mortgage payment. But is anything guaranteed and given in this day and time?

The home owner that borrows with the interest only loan to be able to afford the bigger house has a bigger problem than just a mortgage note that may be beyond their means to pay, they generally live beyond their means elsewhere. Those bills will come due much faster than the interest only loan collector. The borrower that uses the interest only loan as a way to bridge the gap between my tomorrow salary, and the reality of todays salary, will probably still have this same habit, when tomorrows salary becomes todays.

This idea is great, if you happen to be a young professional with a great future, and you work for a company thats willing to buy your home at the end of 5 years, when youre ready to move up the corporate ladder, but these deals are few and far between. Most of the interest only loan borrowers dont fall into this market segment. Theyre in the one that will be trying to find a way to pay a huge mortgage payment in about 5 years.

The big house, the picket fence, and the great job are wonderful goals and dreams to have. You just need to make sure before you step onto the dream cloud, that youve got a net beneath you!