Then again, you have to ask yourself, in most cases why would someone take an IO ARM in the first place?
Of course the line I always heard was — “Well you see, these are doctors about to graduate medical school. They don’t have much income now but NEXT year they’ll have a lot and they’ll go with a more traditional loan.”
If that was indeed the case then nothing will happen when these option ARMs recast. All of these newly minted doctors will just suck up the higher payments or refinance into a different mortgage when the time comes. We will soon find out, won’t we?
