One expert says the new Wealth-Builder (WB) loan – a loan with a term of only 15 years – may be all smoke and mirrors.
Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania Jack M. Guttentag scoured all of the documents on WB he could find, and found none mentioned the reduction in interest rate required to make the payment almost as low as the one on traditional 30-year loans, which the WB promises. “I believe the current mortgage design is in many respects obsolete and badly needs an upgrade,” Guttentag wrote. “But the WB is not it.”
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