WSJ.com – The Home-Mortgage Muddle
The study found that about 35% of people with adjustable-rate mortgages didn’t know how much the rate could increase at one time, and 41% weren’t sure of the maximum rate they could face. About 28% didn’t know which index of interest rates would be used to determine their adjustments; many others gave incorrect answers, such as the consumer price index or “the going rate.”
The study, by Fed economists Brian Bucks and Karen Pence, says people with low incomes and less education are more likely to be unsure of the terms of their mortgages.
Oh that can’t be a good thing.