Then how could you tell if the loan was negative. Simple. If you don't pay the minimum interest each month, the part you do not pay is added to your balance and your loan balance goes up, not down. There first option was less than interest only. Voila!
The second advertisement talks about getting you a fixed rate and gives you a very low interest rate. It is a fixed rate, true, but it is a 15 year fixed rate, not a 30 year. Most people will pick up the phone and call because they have found this terrific low 30 year fixed. If you know anything about me you know that a 15 year loan is my favorite loan. But I do not advertise it as a 30 year, I screamed about it as a 15 year because I truly believe it is a way to change your financial life forever. My father told me from the time I can remember that if someone feels that they can mislead you in one instance they certainly won't stop there. Simple solution: put the type of loan and interest rate in big print, not small.
The third example is on radio and this advertisement talks about a 15 year loan (good) at a rate that is not realistic and then gives you the APR, annual percentage rate, which tells me, but probably not you that it has a lot of points with the origination of the loan. A point is 1% of the loan and they are talking about 3 or 4 points. If you have a $300,000 loan and you find out that to achieve the rate they are talking about you would need to pay $9000 to
$12,000 up front. Most people would laugh and hang up. That isn't the answer. You need to know how a point works so you can evaluate the situation. By paying a point you get a lower interest rate and lower payment. Thus you save money on a monthly basis. You take the monthly savings and divide it into the cost of the point. That will tell you how many months you will pay before breaking even. On a 15 year loan I wouldn't go over 36-48 months. Why? Because if you wait much longer you might sell the house or refinance the loan again for other reasons and never make up the dollars you spent. That is why it generally never pays to take more than a point. It doesn't make financial sense.
The aforementioned examples are not the only ones out there, but just the most popular at this time. Again, we are in a poor place in this country with all of the foreclosures that have happen and will happen. Even if society would condone the phrase "I didn't understand how the loan worked" do you really want to be tricked?
It is up to you. Either learn, stay out of the real estate market (and really other financial markets as well) or be prepared for the worse case scenario. Everyone can learn the basics of real estate and real estate financing if you only ask.