Steps
- Talk about the options with mortgage lenders about the types of loans from which to choose, but mostly to avoid.
- Accept only a fixed rate, unless you just want to move into a house on lower payment plans, but lose it when you get to the high payments which are caused by A.R.M. (adjustable rate mortgages, variable) and balloon notes.
Mortgage options
- Find and sign up for "Fixed rate" payments (but know that the payment changes when the insurance cost and property tax changes).
- Accept the fact that fixed rates do not start low, but they are not going to have huge coming over the horizon or balloons either.
- Avoid "Variable" rate--rates goes up or down.
- Avoid "Balloon" note -- refinancing options.
- Know the danger of "Liar" loans -- No verification of your income and job. They have low payments for a few years and then it goes up with variable rates or balloons.
- Resist "N.I.N.A." loans -- No Income and No Assets required. They have low payments for a few years and then it goes up with variable rates or balloons.
- Fight "N.I.N.J.A." loans -- No income and No Job or Assets were needed. They have low payments for a few years and then it goes up with variable rates or balloons.
Tips
- Get a fixed loan that has a payment that you can afford on a fixed rate. You will be out of luck if you opt for the variable kinds of "temporary" mortgage because it will reach the time to refinance and change to full payments.
- Always pay on time. Do not accept low teaser-rates (they're temporary), personal desire (lust) and lack of responsibility by buyers and sellers cause your bad loan. Now you need to just say "No!" to any strange loans...
- You can pay your mortgage payment with a credit card when you are short of funds, but this also ends... and you have that debt and it may ruin your credit.
Warnings
- Avoid debt horror stories like "How credit ruined my life." or "I was a credit abuser." With great temptations credit leads to excess spending--and bankruptcy, repossession and foreclosure.
- There are many promises for fiscal and economic solutions--bank corporations make millions while leading to ruin, so don't sign for strange kinds of loan arrangements...
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