The Mortgage Bankers Association of America reports that more people are taking out disastrous home loans. Going back six years, only two out of every 100 people took out one of those loans. But today about 40 percent of people are taking out exotic loans that could harm their wallet. This is a loan where you don’t pay any principal on your home, known as an interest only loan. Or the other type is an option loan that sets the payments so low that the balance on the loan goes up instead of down. Option payment loans are worst, but both are bad news. Banks were pushing these kinds of loans in the ‘80s and they were called “Negative AM” loans. Back then, many people had to foreclose on their homes because they took out these loans. It’s happening again today. If you can’t qualify for a traditional home loan – typically a 30-year fixed loan – you shouldn’t buy that home.