Low Payment Now, High Payment Later
Posted on December 13, 2006
Filed Under Mortgage Updates
That low payment looks sweet when you first sign up for a mortgage for your home, however what potential homeowners are not being told is that they could end up paying much more than they could afford later on.
Mortgage lenders often emphasize the low initial payments, but gloss over the possibility of higher payments later, according to John Dugan, U.S. Comptroller of the Currency.
Dugan says the government is taking steps to address the problems that arise from a variety of non-traditional mortgages that have helped fuel a housing boom.
One problem, he says, is that some lenders often fail to evaluate a borrower’s ability to make higher payments.
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