Daily Real Estate News  |  March 16, 2004  |   Creative Mortgages Fuel Home Sales Lenders are rolling out innovative mortgages to help cash-strapped buyers afford homes as prices continue to rise, but borrowers will have to pay higher interest rates in exchange for greater flexibility. Among these offerings are so-called "piggyback loans," which allow consumers to avoid private mortgage insurance or jumbo loans by obtaining a first mortgage along with a home-equity loan or credit line; interest-only mortgages, whereby only the interest is due during the first few years; and negative amortization loans, which impose minimum payments based on interest rates. Some lenders also are letting borrowers skip a total of 10 payments during the loan term or provide purchase-and-renovate mortgages that take into account both the home price and remodeling costs. Countrywide Financial Corp. is even considering a loan that would include the property price as well as the borrower's utility bills; while IndyMac Bancorp has come up with a new financial product that caters to the special needs of self-employed homebuyers.

Source: The Wall Street Journal (03/16/04); Simon, Ruth