The United States is already struggling to prop up a financial system in which the vast majority of mortgages are underwater and the median monthly payments are $500.
But a new bill to finance home loans, the first installment of which comes with interest, will add $20 to the median loan balance.
“We’re hoping that this will encourage people to borrow in a more balanced manner,” said Peter Diamandis, chief executive of mortgage finance company Boost Finance, which helped write the bill.
In the U.S., mortgage lenders have been reluctant to extend credit to borrowers whose balances are too high because the loans can be complicated, time-consuming and expensive to pay off.
This year, a new credit boom has put more pressure on the system.
The Federal Reserve has encouraged banks to provide more consumer credit to people with more modest credit scores, including for people who have a job but cannot pay their mortgages.
The bank, however, has also limited the amount of credit to those with incomes of at least 100 percent of the median household income.
But Boost Finance has been lobbying for more credit to finance loans, particularly to borrowers who can’t afford to pay back their loans.
The boost is based on the median annual payment on a home loan of $600, according to data from Bankrate.com, a credit-rating agency.
“Our main concern is that the loan is going to be unaffordable for borrowers with high-risk borrowers who are getting squeezed,” said Dan Stokes, chief operating officer of Boost Finance.
The $20 fee, which is available to consumers with the first $500 in mortgage payments and $20 in annual household income, will apply to all mortgages issued in the U