Be Wary of Ads
Don’t jump at the ads that seem ‘too good to be true,’ they probably are. Do your research, get quotes from multiple lenders, and read all the fine print. Ads will highlight low initial interest rates and monthly payments without stressing that those rates and payments will rise significantly in the future or that only ‘perfect credit candidates’ qualify. Gather all of the facts and ensure that any deals you consider meet your financial requirements.
If you look at ARM advertisements, look at the introductory interest rate, how long the rate is in place, and the loan’s annual percentage rate, or APR. If the APR is significantly higher than the initial rate, it indicates that the payments will likely rise significantly after the introductory period, even if market interest rates remain unchanged.
Choosing a mortgage is likely to be the most significant financial decision you will ever make. Gather all of the details you need to make an informed decision. When speaking with lenders, mortgage brokers, settlement or closing agents, your attorney, and other professionals involved in the deal, ask questions about loan features—and keep asking until you receive straightforward and full responses.