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    t several years. These loans were offered with very low interest rates, but now can switch into variable loans with much higher payments.

    Borrowers often refinance out of their newly adjustable loan and back into some type of fixed rate loan. They may also choose a long

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    Payment Changes

    For starters when a mortgage lender evaluates your mortgage application they want to make sure you are not going to experience “payment shock”.

    A mortgage lender will evaluate your current mortgage or rental payment and see if your new loan will be much higher than this.

    If you mortgage size will go from $2,000 per month to $4,000 per month after a cash out refinance the lender wants to see if you can really handle the new payment. The lender will compare your new potential debt load to your total pretax income. Lenders usually don’t want to see your monthly debt load be more than 40% of your pretax income. Some lenders will go as high as 55% debt to income ratio. This depends on the mortgage lender underwriting standards.

    Another form of payment shock you may experience is when your mortgage switches from a fixed rate to an adjustable rate.

    Your monthly mortgage payment may shoot up dramatically, sometimes by $1,000 or even more per month.

    This often happens to borrowers who recently received 2/28 mortgages or 3/28 mortgages in the past several years. These loans were offered with very low interest rates, but now can switch into variable loans with much higher payments.

    Borrowers often refinance out of their newly adjustable loan and back into some type of fixed rate loan. They may also choose a long

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    much higher than this.

    If you mortgage size will go from $2,000 per month to $4,000 per month after a cash out refinance the lender wants to see if you can really handle the new payment. The lender will compare your new potential debt load to your total pretax income. Lenders usually don’t want to see your monthly debt load be more than 40% of your pretax income. Some lenders will go as high as 55% debt to income ratio. This depends on the mortgage lender underwriting standards.

    Another form of payment shock you may experience is when your mortgage switches from a fixed rate to an adjustable rate.

    Your monthly mortgage payment may shoot up dramatically, sometimes by $1,000 or even more per month.

    This often happens to borrowers who recently received 2/28 mortgages or 3/28 mortgages in the past several years. These loans were offered with very low interest rates, but now can switch into variable loans with much higher payments.

    Borrowers often refinance out of their newly adjustable loan and back into some type of fixed rate loan. They may also choose a long

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    Lenders usually don’t want to see your monthly debt load be more than 40% of your pretax income. Some lenders will go as high as 55% debt to income ratio. This depends on the mortgage lender underwriting standards.

    Another form of payment shock you may experience is when your mortgage switches from a fixed rate to an adjustable rate.

    Your monthly mortgage payment may shoot up dramatically, sometimes by $1,000 or even more per month.

    This often happens to borrowers who recently received 2/28 mortgages or 3/28 mortgages in the past several years. These loans were offered with very low interest rates, but now can switch into variable loans with much higher payments.

    Borrowers often refinance out of their newly adjustable loan and back into some type of fixed rate loan. They may also choose a long

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    n your mortgage switches from a fixed rate to an adjustable rate.

    Your monthly mortgage payment may shoot up dramatically, sometimes by $1,000 or even more per month.

    This often happens to borrowers who recently received 2/28 mortgages or 3/28 mortgages in the past several years. These loans were offered with very low interest rates, but now can switch into variable loans with much higher payments.

    Borrowers often refinance out of their newly adjustable loan and back into some type of fixed rate loan. They may also choose a long

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    t several years. These loans were offered with very low interest rates, but now can switch into variable loans with much higher payments.

    Borrowers often refinance out of their newly adjustable loan and back into some type of fixed rate loan. They may also choose a long-term interest only loan, such as a 10 year interest only loan. This gives the borrower a lower payment than usual but also the fixed interest rate and monthly payment.

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