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Basically they make the first 'n' years interest only, and defer the principal payment...a typical 30 year $1200 payment might become $1000 on an interest only basis. After a few years the payment amount kicks up higher. The pitch is that you'll be making more then, and the house will be worth more, or you'll have moved and your increased equity will translate into profit.
Doesnt that sound great?
Only problem with this scenario is if your wages dont go up (and wage increases have been nada the last 5 years), your home stops appreciating in value (how much higher can these things go anyhow?) or you end up staying in the house a long time, in which case you get soaked on the overall interest payments.
Ha Ha...the limit is when even with these weird financial constructions nobody can afford even a modest home. No buyers, no uplift.
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Many an optimist has become rich by buying out a pessimist
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