d you're in a lot of trouble with no way out. And balloons are bursting all the time. They're one of the main reasons mortgage defaults and foreclosures are approaching record breaking highs all across the country.

Too many people got themselves suckered into exotic 125% loan to value and mortgage refinance loans with risky balloon payments. And now they're paying the price.

LTVs are not for the desperate already drowning in debt, no matter how seductive they may seem. So before jumping into one, always do your homework and carefully consider all your alternati

Did you know that 125% loan to value and mortgage refinance are extremely risky for borrowers?

Well, they are! That's why you better think twice before jumping into an exotic 125% loan to value (LTV) second mortgage that allows you to refinance by borrowing more than your home is worth.

It sounds too good to be true, and it is. That's why the Federal Trade Commission warns, “Borrowers Beware!”

Too many unscrupulous lenders use 125% loan to value and mortgage refinance to prey on vulnerable homeowners. Even though LTVs opens a door for lots of people to borrow, especially young couples with limited income and often shaky credit, this type of loan comes with a high price.

Interest rates are much higher and closing costs often add up to more than 10% of the loan balance. There have actually been stories of interest rates as high as 30% and hidden fees of 20 points or more.

LTVs are costly because, since there's no collateral and no way for the lender to foreclose, LTVs are also risky for lenders. So, they make you pay through the nose for the privilege of borrowing.

This high income potential attracts unscrupulous lenders and debt consolidation "advisors," high pressure home improvement salespeople and so-called foreclosure “rescue” companies willing to take a gamble on the risk of default in return for the huge profits they can make at the borrower's expense.

They persuade vulnerable homeowners, often people with lower income, high credit card debt or poor credit, into believing that 125% loan to value and mortgage refinance are in their best interest. And they make an offer that sounds too good to refuse, with very attractive, extremely low monthly interest-only payments. But the offer comes with a huge burden.

Somewhere down the line, usually a lot sooner than you anticipate, you're going to have to come up with a bundle of money to pay a big balloon payment. By the way, did you know that if you have to move for any reason, you can't sell your home without first paying off your balloon loan? And where are you going to raise the money, since you owe more than your home is worth?

Think about it! When the balloon comes due, if you can't raise enough quick cash in time or refinance at a cost you can afford, your balloon bursts and you're in a lot of trouble with no way out. And balloons are bursting all the time. They're one of the main reasons mortgage defaults and foreclosures are approaching record breaking highs all across the country.

Too many people got themselves suckered into exotic 125% loan to value and mortgage refinance loans with risky balloon payments. And now they're paying the price.

LTVs are not for the desperate already drowning in debt, no matter how seductive they may seem. So before jumping into one, always do your homework and carefully consider all your alternativ

rrow, especially young couples with limited income and often shaky credit, this type of loan comes with a high price.

Interest rates are much higher and closing costs often add up to more than 10% of the loan balance. There have actually been stories of interest rates as high as 30% and hidden fees of 20 points or more.

LTVs are costly because, since there's no collateral and no way for the lender to foreclose, LTVs are also risky for lenders. So, they make you pay through the nose for the privilege of borrowing.

This high income potential attracts unscrupulous lenders and debt consolidation "advisors," high pressure home improvement salespeople and so-called foreclosure “rescue” companies willing to take a gamble on the risk of default in return for the huge profits they can make at the borrower's expense.

They persuade vulnerable homeowners, often people with lower income, high credit card debt or poor credit, into believing that 125% loan to value and mortgage refinance are in their best interest. And they make an offer that sounds too good to refuse, with very attractive, extremely low monthly interest-only payments. But the offer comes with a huge burden.

Somewhere down the line, usually a lot sooner than you anticipate, you're going to have to come up with a bundle of money to pay a big balloon payment. By the way, did you know that if you have to move for any reason, you can't sell your home without first paying off your balloon loan? And where are you going to raise the money, since you owe more than your home is worth?

Think about it! When the balloon comes due, if you can't raise enough quick cash in time or refinance at a cost you can afford, your balloon bursts and you're in a lot of trouble with no way out. And balloons are bursting all the time. They're one of the main reasons mortgage defaults and foreclosures are approaching record breaking highs all across the country.

Too many people got themselves suckered into exotic 125% loan to value and mortgage refinance loans with risky balloon payments. And now they're paying the price.

LTVs are not for the desperate already drowning in debt, no matter how seductive they may seem. So before jumping into one, always do your homework and carefully consider all your alternati

ulous lenders and debt consolidation "advisors," high pressure home improvement salespeople and so-called foreclosure “rescue” companies willing to take a gamble on the risk of default in return for the huge profits they can make at the borrower's expense.

They persuade vulnerable homeowners, often people with lower income, high credit card debt or poor credit, into believing that 125% loan to value and mortgage refinance are in their best interest. And they make an offer that sounds too good to refuse, with very attractive, extremely low monthly interest-only payments. But the offer comes with a huge burden.

Somewhere down the line, usually a lot sooner than you anticipate, you're going to have to come up with a bundle of money to pay a big balloon payment. By the way, did you know that if you have to move for any reason, you can't sell your home without first paying off your balloon loan? And where are you going to raise the money, since you owe more than your home is worth?

Think about it! When the balloon comes due, if you can't raise enough quick cash in time or refinance at a cost you can afford, your balloon bursts and you're in a lot of trouble with no way out. And balloons are bursting all the time. They're one of the main reasons mortgage defaults and foreclosures are approaching record breaking highs all across the country.

Too many people got themselves suckered into exotic 125% loan to value and mortgage refinance loans with risky balloon payments. And now they're paying the price.

LTVs are not for the desperate already drowning in debt, no matter how seductive they may seem. So before jumping into one, always do your homework and carefully consider all your alternati

s. But the offer comes with a huge burden.

Somewhere down the line, usually a lot sooner than you anticipate, you're going to have to come up with a bundle of money to pay a big balloon payment. By the way, did you know that if you have to move for any reason, you can't sell your home without first paying off your balloon loan? And where are you going to raise the money, since you owe more than your home is worth?

Think about it! When the balloon comes due, if you can't raise enough quick cash in time or refinance at a cost you can afford, your balloon bursts and you're in a lot of trouble with no way out. And balloons are bursting all the time. They're one of the main reasons mortgage defaults and foreclosures are approaching record breaking highs all across the country.

Too many people got themselves suckered into exotic 125% loan to value and mortgage refinance loans with risky balloon payments. And now they're paying the price.

LTVs are not for the desperate already drowning in debt, no matter how seductive they may seem. So before jumping into one, always do your homework and carefully consider all your alternati

d you're in a lot of trouble with no way out. And balloons are bursting all the time. They're one of the main reasons mortgage defaults and foreclosures are approaching record breaking highs all across the country.

Too many people got themselves suckered into exotic 125% loan to value and mortgage refinance loans with risky balloon payments. And now they're paying the price.

LTVs are not for the desperate already drowning in debt, no matter how seductive they may seem. So before jumping into one, always do your homework and carefully consider all your alternative options.

And, by all means, work only with reputable lenders you know you can trust. And never let yourself be conned into some deal that’s only going to get you deeper into debt. It's not worth it!