Suppose a bank decides to offer a large number of interest only mortgages. 1. Do you think that they would get a lot of business? 2. Would they be setting people up for negative financial outcomes (and should they have any responsibility for them)?
3. Suppose additionally that these loans were adjustable rate. How do you think the uncertainty of a mortgage payment (like that of an ARM) would change a person’s saving and spending habits? Give at least two additional responses (these can even be to people responding to your initial post)