Psst … Have I got a deal for you – a dirt cheap mortgage that lets you decide how much to pay each month. And don’t worry about your lousy credit rating, we’ll lend to anybody. …

If you’ve shopped for a mortgage recently, you’re sure to have run across offers for some type of “high-cost” loan – especially if you’re African-American or Latino. Many are “subprime” loans with high interest rates – 11 percent for many. Also, many use floating rates that eventually may saddle borrowers with payments they cannot afford.

Sub-prime loans are ostensibly for borrowers considered high risks because of poor credit histories. Lenders tout these loans as a way to help people buy homes when they otherwise could not. Rates are higher because lenders think there’s a greater-than-normal risk these borrowers will stop making payments.

But officials at the Association of Community Organizations for Reform Now conclude, quite reasonably, that lenders are pushing these profitable products to borrowers who could qualify for cheaper, conventional loans. Previous studies have found that a third to a half of subprime borrowers could get better deals.

The motive is easy to see. A typical subprime loan has an adjustable rate figured by adding 5.5 percentage points to the six-month London Inter-Bank Offer Rate. Early in 2004, the LIBOR rate was about 1.2 percent. It’s now about 5.4 percent.

That means a loan that charged 6.7 percent at the start of 2004 could jump to nearly 11 percent at its next adjustment – compared with the 6.5 percent you can get on a typical 30-year mortgage. For every $100,000 borrowed, the monthly payment would rise to $952 from $646.

“With 60 percent of subprime loans set to have their interest rates change by the end of 2006, ARMs pose a huge threat to the security of individual homeowners and entire neighborhoods,” ACORN said, in a research report.

Many high-cost loans give borrowers the option to make rock-bottom payments whenever they choose. Sometimes called “option ARMs,” these may require that only the interest be paid – and sometimes not even all of that. The borrower thus makes no progress in whittling the debt, and by making a succession of minimum payments can end up owing more than he originally borrowed.

Homeowners facing rate increases that make their payments too expensive can try to sell their properties. But that may be difficult in today’s cooling housing market. An option ARM borrower who has made only minimum payments may find he owes more than the house is worth.

What should you do if you have a high-cost loan?

Despite what you were told when you got it, you may be able to refinance with a standard 30-year, fixed-rate loan.

There are lots of counseling agencies that can help with debt issues, often for free. For a referral, call the U.S. Department of Housing and Urban Development at (800) 569-4287. ACORN’s counselors can be found at www.acornhousing.org.

Also, check that your credit report does not contain mistakes. Get a free report by calling (877) 322-8228, or Google “free credit report.”

Finally, shop around among lenders, who are listed in the Yellow Pages under mortgages. Remember, lenders want to lend – somebody will be hungry enough to offer a good deal.