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Today’s featured e-book download is Interest-Only Mortgage Payments and Payment-Option ARM’s: Are they for you? (2.74 MB, 17 pg) – Information to help you decide if an interest-only mortgage payment is right for you.

What you can learn from this booklet

Owning a home is part of the American dream. But high home prices may make the dream seem out of reach. To make monthly mortgage payments more affordable, many lenders offer home loans that allow you to (1) pay only the interest on the loan during the first few years of the loan
term or (2) make only a specified minimum payment that could be less than the monthly interest on the loan.

Whether you are buying a house or refinancing your mortgage, this information can help you decide if an interest-only mortgage payment (an I-O mortgage)—or an adjustable-rate mortgage (ARM) with the option to make a minimum payment (a payment-option ARM)—is right for you. Lenders have a variety of names for these loans, but keep in mind that with I-O mortgages and payment-option ARMs, you could face

1. Payment shock. Your payments may go up a lot—as much as double or
   triple—after the interest-only period or when the payments adjust.

In addition, with payment-option ARMs you could face

2. Negative amortization. Your payments may not cover all of the interest
   owed. The unpaid interest is added to your mortgage balance so that you
   owe more on your mortgage than you originally borrowed.

Be sure you understand the loan terms and the risks you face. And be realistic about whether you can handle future payment increases. If you’re not comfortable with these risks, ask about another loan product.

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To download this e-book, or any of our current e-books, please visit the ebook page where you may choose the e-book(s) you wish to download. *Download an e-book by clicking on it’s title.*