Related Services - The following company listings on the Debt Consolidation Loan Directory are offered to assist you with handling your credit card bills and other monthly payments. Also, in addition shop for other financial services ranging from credit card offers to home and car insurance.
- Credit Card Debt Consolidation - Learn about the debt consolidation process and review detailed listings for lenders and services offering to help consolidate your debts.
- Debt Management Programs - Too many credit bills for you to handle with your budget? Compare different programs and find the one that is the right match for your individual situation.
- Debt Settlement Company - Too much debt? List of companies providing this alternative to bankruptcy that provides for debt negotiation and arbitration services for those that need to eliminate debt.
The New Climate for Mortgage Borrowers
If You're Looking for a New Mortgage or to Refinance
Be wary of a mortgage with payments that can increase substantially. "In the worst cases, people lose their homes when they take on mortgages they can't afford," said Sandra Thompson, Director of the FDIC's Division of Supervision and Consumer Protection.
Examples of mortgages at risk of rising payments include:
- Interest-only loans, for which the borrower pays only the interest — not principal — for the first three, five or more years but then must either pay the loan off entirely or start making much higher payments to repay the principal. The potential risks are significant, especially if the interest rate has gone up and the consumer can't make the new, higher payments.
- "Payment option" ARMs, meaning the borrower has several choices on how much to pay from one month to the next for a set time period. These ARMs may be appropriate for people whose monthly income fluctuates, but if they defer too much interest their costs will go up significantly (because they'll be paying interest on a higher loan amount, perhaps for many years). "Borrowers risk defaulting on their loan if they can't afford the higher payments and if they have problems switching to a better loan," said Luke W. Reynolds, an FDIC Community Affairs Specialist.
- Hybrid ARMs charge a low fixed-interest rate in the early years and generally result in a higher payment thereafter. "These loans allow the consumer to place a bet on the direction of interest rates over the term of the loan, and it is very risky to take a bet when your home is on the line," added Reynolds.
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Fall 2007 |
Try to Raise Your Credit Score |
Thinking About Buying a New House? |
Contact Several Lenders | |
FDIC Consumer News is published by the Federal Deposit Insurance Corporation
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Last updated on 11/08/2007