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Do You Know Your Loan?
By JLP | June 15, 2006
There was an interesting article by Sandra Fleishman on the Washington Post website about mortgages. What bothered me about the article is this quote:
The Fed economists’ report, published this spring, concluded that about 35 percent of borrowers with ARMs didn’t know how much their interest rate could jump, or reset, at any one time. And 41 percent of those holding ARMs weren’t sure of the maximum interest rate they might have to pay.
Wow! That’s a lot of people! I wonder how many of them were told all that stuff but just didn’t pay attention.
There’s also quotes in the story about people who went with ARMs because that was the only way they could get into the house they wanted. That just doesn’t seem like good decision-making to me.
Topics: Mortgages | 2 Comments »
June 15th, 2006 at 8:05 am
I imagine if all those people were told fully what their mortgages were like, the fine print, they might not all have bought them.. At least that’s what I hope. The other thought is that people tend to remember good information more – so if they “mis-heard” that the rate could adjust upwards only two percentage points, instead of only two percentage points per year, they aren’t likely to pay attention to things they hear about other people’s deals that they think are worse than theirs.
July 3rd, 2006 at 8:28 pm
There is more truth there then what most mortgage companies will admit. Most Mortgage Brokers are not interested in doing what is best for the consumer but rather what profits their pockets the most. Learn all you can before you sign any loan and make sure that the Loan Originator has your interest at heart!