How will the new interest rate or the monthly payments be calculated?
The increased rate and payments are stated in advance in some mortgages. In others, they are tied to certain indexes and depend on future market conditions. In these loans, the amount and frequency of the changes in your interest rate and payments also depends on the terms of your loan agreement. • Will the advertised monthly payments be large enough to pay off the mortgage? Some mortgage plans offer low monthly payments even though the interest rate is fairly high. If these monthly costs are not enough to repay the loan amount and the interest charges, the difference may be added to the principal. In some plans, you could owe more at the end of the mortgage term that at the beginning. • Will you have to refinance the mortgage after a few years? If a large or “balloon” payment is due after a few years and you do not have the necessary cash, you may have to refinance the mortgage. If you do refinance and interest rates have risen, you may have to make much higher monthly payments than y
