by Calculated Risk on 8/19/2005 03:18:00 PM

The National Association or Realtors (NAR) cautioned homebuyers on certain loans today:

Homebuyers may not realize that monthly payments on some types of specialty mortgages can increase by as much as 50 percent or more when the introductory period ends.
...
"Consumers are susceptible to loans with monthly payments that can spike dramatically, or that actually increase the amount they owe on their home." NAR President Al Mansell of Salt Lake City.
...
"We’re warning homebuyers to approach these new mortgages carefully," says Mike Calhoun, general counsel for the Center for Responsible Lending. "They should be cautious about accepting a mortgage they can’t afford. These mortgages can be devastating for families who are stretching their budget to buy a home."

"Consumers particularly need to understand the risks inherent in specialty mortgages when financing a home purchase," says David Lereah, NAR’s chief economist.

I suppose late is better than never. Just yesterday I posted excerpts from: Home buyers get comfy with debt. I suspect some of those buyers are going to wish they had been "cautioned".