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Courses in this Department


How Ready Are You to Buy a Home?

Determining Your Dream Home and Finding It!

Factory Built Homes Are Worth a Look

Purchase Manufactured Homes with FHA Loan

How to Buy a Foreclosed Home

Pros and Cons of Corner Lots

Know the Neighborhood Before You Buy

Tune in to an Open House on the Radio

Finding a Qualified Broker or Agent

Shopping for a Loan and Choosing a Lender

How to Improve Your Credit

How to Survive the Loan Application Process

Making an Offer and Signing Contracts

Cancel Your Contract in 3 Days

Understanding the Closing/Settlement Process

Choosing Home Inspection and Settlement Professionals

Double Check Your New Home - The Walkthrough

Know Your Consumer Rights

Seniors Have Many Housing Opportunities

Preparing for the Big Day -- Relocating Moving

Make Your Home Your Castle - Cost Effective Redecorating Ideas


 

Optional Features

They are worth taking a look at.

Basic Options

Here is a brief list of some of the options you may want to add to your loan.

Caps

An interest-rate or payment cap places a limit on the amount your interest rate or monthly payment can increase. Obviously, anything that provides protection against interest rate hikes is a very good idea, so pay close attention to the cap. Although we've listed it here as an option, a cap is really a must. Avoid any ARM that does NOT have a Cap.

Caps come in three versions:

1 - Periodic caps, which limit the interest-rate increase from one adjustment period to the next;

2 - Overall caps, which limit the interest-rate increase over the life of the loan, and

3 - Monthly payment caps, which limit the total amount your monthly payment can increase from one adjustment period to the next.

Longer Term ARMs

You can limit your risk by choosing a longer term ARM, such as a 5/1 or 7/1, where the interest rate is fixed for five or seven years. The tradeoff is you'll probably pay a slightly higher rate than a typical ARM in exchange for that sense of security.

Balloon

These loans offer a lower rate during a set initial period, after which the rate "balloons" to a higher level. A balloon loan is only a good idea if you're absolutely sure you'll be selling your home or refinancing before the loan matures.

Making a Decision

Take a good look.


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