Negative Mortgage – Negative for your Health
cbs13.com – Call Kurtis: Negative Mortgage
Leslie and Rob McDonald have the family sanctuary they’ve always wanted in their Modesto home. But this happy life now goes on under a shadow.“I didn’t understand what we were signing. A lot of embarrassment, a lot of stress. My husband, well he’s actually begun having heart problems now, because of it,” says Leslie McDonald.
It is a tricky kind of home loan called a negative amortization mortgage. It’s a kind of adjustable rate loan that allows you to keep your interest only payment the same for a guaranteed period as interest rates rise. But in the end the small payments don’t cover the rising cost, and the difference is added to your mortgage balance, pushing you further in debt.
“We’re losing about a thousand dollars a month in equity in our home,” says McDonald.
Oops! Considering that the Bay Area leads in this type of mortgage, it really makes you wonder…
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