Mortgage expert David Reed invites Walletpop readers to ask him questions about real estate financing. leave your questions in the comment section of this post.
Q: David -- I've been asked by Freepoint to refinance with them. This company claims that I would build up wealth by investing the difference in my equity with them, getting an interest only loan. They state that having equity in your home is not good because someone can sue you and have a claim on your equity. After several years, one would have enough money to pay off their mortgage if they desired. I would like to get advice on this. They said the higher interest would be a tax write off and I would be investing the equity and getting a higher return. Please advise. Thank you. - Helen
A: Helen -- Don't return their phone calls. I don't know who that company is, and while I'm sure they're a fine organization, I'm not comfortable. I see three big problems with this "pitch" which used to be very popular among mortgage loan officers yet seems to be falling by the wayside.
Build wealth by investing the different in equity with them
Having equity in your home isn't good because someone can sue you
The higher interest would be a tax write off
Sheesh. And I thought loan officers like that were out of business or selling cars or something.