Sometimes in life people actually get what they ask for and if they’re to stupid to realize it, then they should not have asked for it. When you have a person who want’s to purchase a house and they make enough income even though their credit sucks (which by the way is their own fault) we lenders try to accomodate their requests because we are committed to CRA (Community Reinvestment Act)but in most cases they’re are given the opportunity to lock a rate at a higher fixed rate or an adjustable rate loan. To date I have never not once ever suggested an Arm but their have been people that decided to go with the lower Arm rate. Not my fault, totally their own decision.
I remember when I bought out my sisters’ shares of my parents house in 2000, I still had some credit history that was problematic. So I got a loan that reflected it - at a higher interest rate. After a few years, I was able to refinance, get a lower rate and take some money out for home improvement. Maybe I’m dense, but I cannot for the life of me think why people think that a $500,000 home can be bought with a $60,000/year salary or that their loan payments will only be $850 a month in perpetuity. It makes no economic sense.