Smart Borrowing

Buying your home

Types of Mortgages

Being a Smart Borrower

A Home Buyer's Dictionary

Mortgage rates, terms, requirements and settlement service costs vary from lender to lender. Check out commercial banks, savings and loans, credit unions and insurance companies. Compare rates and requirements; appraisal, credit report, survey, title search and settlement service costs; title insurance fees, "points" and prepayment penalties.

Ask lenders if their own customers get more favorable terms, as it may pay you to transfer accounts and/or credit cards. Ask about an "open-end clause" allowing you to borrow more money later without refinancing.

Ask about capping and Adjustable Rate Mortgage, to limit the amount the interest rate can increase each adjustment period and overall. To avoid "negative amortization" (interest being added to the mortgage's principal), make sure your payment amount rises with each interest rate increase. And ask about a Conversion Provision allowing you to change to a fixed rate mortgage at a specified point in the term of the ARM.

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