REAL TipS: BUYING

Know the risks of specialty mortgages

The housing market has remained hot since 2001, causing prices to rise dramatically in many areas. These high levels make it difficult for some buyers to afford a home, particularly first-time buyers. As a result, many are looking to lenders that offer specialty mortgages. While non-traditional loans such as interest-only and negative amortization may help buyers stretch their current income, these mortgages pose a greater risk.

Some specialty mortgages can increase by as much as 50% after the introductory period, while others may actually cause your loan balance to grow instead of decrease. It is important to know the risks, as well as the advantages, associated with creative mortgage lending, because you may find yourself unable to handle the possible payment increases. For affordable housing programs in Texas, click here.

Texas Association of REALTORS®