How can I recognize deceptive mortgage ads and offers?

The Federal Trade Commission (FTC) says an ad with a very low or 'fixed' rate may not disclose the true terms the law requires. A rate may be low or labeled fixed only for a brief opening stretch — the FTC notes that period can be as little as a month — and then the rate and payment can rise sharply. If an interest rate appears in the ad, federal law also requires the APR. Check whether that APR is clear or buried in fine print or deep on a website.

A very low payment can mean you would pay only interest for a time. Principal would still come due later through higher payments or a large balloon payment. Some offers let you pay only part of the interest each month and add the unpaid interest to the balance. That negative amortization can leave you owing more than the home would sell for.

When you compare offers, the FTC says to look at the total monthly payment. That calculation typically includes principal, interest, taxes, and homeowners insurance, and may or may not include private mortgage insurance. If PMI or FHA insurance applies, ask whether it is included in the quoted payment. An attractive headline is not a reason to skip the written terms.