| If you refinanced your old mortgage or purchased your | | | | adjustable rate mortgage amortized for the remaining |
| home with an Adjustable Rate Mortgage, you might | | | | term of your loan. |
| wonder what will happen once the introductory period | | | | What does this mean for you? If your mortgage was |
| of your loan ends. Many homeowners that financed | | | | a thirty year interest only mortgage with a five year |
| their homes with these risky variable interest rate | | | | interest only period, the mortgage payment will be |
| mortgages are in for a shock when the mortgage | | | | based on a 25 year payment schedule at the end of |
| lender adjusts the interest rate and monthly payment. If | | | | the interest only period. Not a big deal right? It means |
| you are one of these homeowners, here is what you | | | | your monthly payment will be much higher, not simply |
| need to know to protect yourself from a mortgage | | | | because the interest rate has gone up, but because |
| payment crisis. | | | | you now have less time to pay back the full amount |
| Many homeowners purchased homes during the | | | | of your loan than if you used a traditional mortgage to |
| recent housing boom that they simply cannot afford. | | | | finance your home. |
| These homebuyers qualified for the loans using | | | | The bottom line is that you may not be able to afford |
| interest only or option mortgages because they could | | | | the payments once your loan is converted. If you are |
| not qualify for a traditional mortgage to purchase their | | | | coming up on the end of your introductory period and |
| dream home. Buying outside of your means is the first | | | | do not know what your monthly payment will be, you |
| sign of trouble when it comes to personal finance. | | | | should contact your lender immediately and ask about |
| Homeowners in this situation that can afford their | | | | the change. If you do not qualify to refinance the |
| monthly mortgage payment during the interest only or | | | | mortgage and will not be able to afford the payments, |
| option period may find they cannot afford the | | | | you may need to take on a second job or consider |
| mortgage payment when this period ends. If you have | | | | selling your home. |
| one of these loans you should review your contract to | | | | You can learn more about your mortgage options, |
| find out when the interest only or option period expires. | | | | including common homebuyer mistakes to avoid by |
| This timeframe usually lasts for five years; after this | | | | registering for a free mortgage guidebook. |
| time the mortgage will convert your loan to a standard | | | | |