Internet presentation by Mortgage Market
Information Services, Inc. (opens in new window)
One of the Nation's Leading Publishers of Home Finance
Information.
PEOPLE ARE ASKING (continued)
Mortgages have changed, and so have the questions that need to be
asked and answered.
Shopping for a mortgage used to be a relatively simple process.
Most home mortgage loans had interest rates that did not change over the
life of the loan. Choosing among these fixed-rate mortgage loans meant
comparing interest rates, monthly payments, fees, prepayment penalties,
and due-on-sale clauses.
Today, many loans have interest rates (and monthly payments) that
can change from time to time. To compare one ARM with another or with a
fixed-rate mortgage, you need to know about indexes, margins, discounts,
caps, negative amortization, and convertibility. You need to consider
the maximum amount your monthly payment could increase. Most
important,
you need to compare what might happen to your mortgage costs with your
future ability to pay.
This booklet explains how ARMs work and some of the risks and
advantages to borrowers that ARMs introduce. It discusses features that
can help reduce the risks and gives some pointers about advertising and
other ways you can get information from lenders. Important ARM terms
are
defined in a glossary on page 19 (page 16 in this electronic booklet). And a
checklist at the end of the
booklet should help you ask lenders the right questions and figure out
whether an ARM is right for you. Asking lenders to fill out the
checklist is a good way to get the information you need to compare
mortgages.
The above text was extractly directly from the Consumer
Handbook On Adjustable Rate Mortgages, as published by the
Federal Reserve Board and Office of Thrift Supervision. Although the above
text is public domain, this electronic booklet is copyrighted © 1996
by Mortgage Market Information Services, Inc. Readers of this electronic
booklet are allowed to print the booklet for non-profit distribution
Pg 1 -- Introduction and credits
Pg 2 -- PEOPLE ARE ASKING
Pg 3 -- PEOPLE ARE ASKING (continued)
Pg 4 -- WHAT IS AN ARM?
Pg 5 -- HOW ARMS WORK:THE BASIC FEATURES
Pg 6 -- FEATURES (continued)
Pg 7 -- CONSUMER CAUTIONS (Discounts)
Pg 8 -- CONSUMER CAUTIONS (Payment shock)
Pg 9 -- HOW CAN I REDUCE MY RISK?
Pg 10 -- REDUCE MY RISK (continued)
Pg 11 -- REDUCE MY RISK (continued)
Pg 12 -- REDUCE MY RISK (continued)
Pg 13 -- REDUCE MY RISK (continued)
Pg 14 -- WHERE TO GET INFORMATION
Pg 15 -- INFORMATION (continued)
Pg 16 -- GLOSSARY
Pg 17 -- GLOSSARY (continued)
Pg 18 -- MORTGAGE CHECKLIST
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