Have you decided on a new home that you're going to make an offer on? Or maybe you are planning on refinancing an existing mortgage, and are deciding what you want your monthly mortgage payment to be. Choosing how much to pay each month is a good place to start. It's one of the first questions a car salesman will ask when you walk on to his lot, and with all the new types of mortgages, it's now a question that can be asked by many mortgage lenders.
Innovative mortgage products, sometimes called exotic mortgages, have features that allow borrowers to minimize their monthly payments early in the life of the mortgage in exchange for higher payments down the road. Most borrowers believe they will refinance their mortgage or move before those higher payments set in. However, a misunderstanding of the risks associated with these mortgages can lead to financial stress - or even disaster. (To read more about shopping for a house, see Understanding the Mortgage Payment Structure,Shopping For A Mortgage and Make A Risk-Based Mortgage Decision.)
Innovative mortgage products, sometimes called exotic mortgages, have features that allow borrowers to minimize their monthly payments early in the life of the mortgage in exchange for higher payments down the road. Most borrowers believe they will refinance their mortgage or move before those higher payments set in. However, a misunderstanding of the risks associated with these mortgages can lead to financial stress - or even disaster. (To read more about shopping for a house, see Understanding the Mortgage Payment Structure,Shopping For A Mortgage and Make A Risk-Based Mortgage Decision.)
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