Has anyone heard of integrated home loans with a 1% interest rate? Is it to good to be true?

Answer 1

Yes, it is to good to be true.
In fact your payment will be based on 1% but you will actually be paying 7-9% and your rate will not be fixed. You have the option of paying the low payment, but the remainder of your bill is going to be added to your debt. After a few years this option gets taken away, and your loan is much higher than when you started, so the regular payments are huge. It forces you to refinance again to get lower payments.
If your loan officer sold this loan to you in any other way, they are lying and you need to go somwhere else. Almost every lender and every mortgage broker has a similar program with very low payments, so just choose someone that is up front about the program.

Answer 2

Ron is correct, in that you might have a payment based on 1%, your real interest rate will be 7-9%.

So, for example, let's say you finance $200,000. You might have a minimum payment of $643. If your actual interest rate is 7.5% (which it's likely to be at least that high), you will also have the option of paying all of the interest, or $1250. You'll also have a 30 year and 15 year payment option.

If you don't pay the $1250, you will add the difference between the $643 and the $1250 to your balance. So, in month 2 of your loan, you'll owe $200,607. Next month, $201,215. And so on and so on. It will stop when it hits $220-230,000, depending on which lender you're with or which state you're in.

You're almost always better off taking an interest-only loan, if you need some payment relief. At least your balance remains the same, and doesn't rise. Heck, you can have a 30 year fixed rate loan, that gives you an interest-only option for the first 10 years, at about 6.25%. Fixed rate loan that's at least 1.25% lower rate than the 1% offer you're seeing.

And I would bet $100 that you can't get an honest answer about the real risks of this loan from the guys at integrated. They'll talk in circles until you give up.

Tread carefully, shop around, talk to friends and family and get some referrals.

Answer 3

No, I have never hear of an integrated home loan.

Yes, it is too good to be true.