Lenders Tweaking Years

Loans that have short pay back periods are dangerous for homeowners. Otherwise known as balloon loans, the default rate is high on these loans because most homeowners have problems meeting the final pay back date. So, why would lenders want to write these loans? Well, it has to do with risk. Lenders view more years on a loan pay back as risky. They figure the more years, the longer they have to hope you make payments. As a result, they view short term loans more positively. Yes, it is odd.