Will my mortgage payment increase monthly?
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The mortgage borrowers know that with many types of mortgages, their monthly payment could go up a lot from one month to the next.
Depending on the terms of your loan, your monthly payments could increase — in some cases dramatically. Nontraditional mortgage loan prod- ucts such as interest-onlys and option-ARMS are more complex than tradition- al fixed or 15 - or 30 - year adjustable rate mortgages (ARMs) and can carry a significant risk of payment shock (a large and sudden increase in your monthly payment).
To avoid drastic increases in your monthly payments, it is important for you to understand loan terms and associated benefits and risks prior to choosing one of the many mortgage products available today. If you are considering an adjustable-rate mortgage, traditional or otherwise, make sure you have the ability to repay the debt. Federal law requires the lender to provide you with specific disclosures about the terms of your loan during the application process. Review these disclo- sures carefully. The lending institution should provide you with enough infor- mation to make an informed decision. What you should ask the lender: • What is the most appropriate loan product for me? • Can my monthly payments rise? If so, how much? |
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