Mortgage Loan :: How to Mortgage Your Home

Types of Mortgages and Which Mortgage Loan is the Best for You

Just wanted to quickly discuss the advantages (in stability and overall cost) of a 30-year fixed rate mortgage over an adjustable rate mortgage (aka ARM).

Adjustable Rate

With an ARM, you may get a very low interest rate to begin with, but once it resets and that rate adjusts, you might be looking at payments that you couldn't afford even if you stopped buying anything else for the month to cover it! Many folks are in foreclosure now for this very reason.

Fixed Rate

30-year fixed rate mortgages are more stable and predictable, and today you can get such a great deal due to low interest rates that I can't think of a reason NOT to go with one!

What to Watch Out For

Anything with a "balloon payment"
Fixed for only a certain length of time
Interest-only mortgages
Loan officers who don't want you to read the paperwork
Pushy mortgage companies

Very Important

A home loan is something you will be obligated to pay for decades. Be SURE to read every word of the paperwork you receive, and make copies of it as backup. If you have or can afford to have a lawyer, ask him or her to read over all paperwork to make sure it's fair and legit before you sign. The legal cost and extra time will be well worth it. If your mortgage company has a problem with this, you might want to consider a different shop.

So remember that YOU are the customer and the mortgage company is working FOR YOU. Keep your options open and be conscientious -- there are many great deals out there, especially right now -- and you will find the way to your new home.

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