Internet presentation by Mortgage Market
Information Services, Inc. (opens in new window)
One of the Nation's Leading Publishers of Home Finance
Information.
WHERE TO GET INFORMATION
Before you actually apply for a loan and pay a fee, ask for all the
information the lender has on the loan you are considering. It is
important that you understand index rates, margins, caps, and other ARM
features like negative amortization. You can get helpful information
from advertisements and disclosures, which are subject to certain
federal standards.
Advertising
Your first information about mortgages probably will come from
newspaper advertisements placed by builders, real estate brokers, and
lenders. While this information can be helpful, keep in mind that the
ads are designed to make the mortgage look as attractive as possible.
These ads may play up low initial interest rates and monthly payments,
without emphasizing that those rates and payments later could increase
substantially. Get all the facts.
A federal law, the Truth in Lending Act, requires mortgage
advertisers, once they begin advertising specific terms, to give further
information on the loan. For example, if they want to show the interest
rate or payment amount on the loan, they must also tell you the annual
percentage rate (APR) and whether that rate may go up. The annual
percentage rate, the cost of your credit as a yearly rate, reflects more
than just a low initial rate. It takes into account interest, points
paid on the loan, any loan origination fee, and any mortgage insurance
premiums you may have to pay.
Ads may play up low initial rates.
Get all the
facts.
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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