When you meet with a lender to apply for financing,
you may feel as if you are in a foreign country as the loan officer talks
points, Regulation Z margins, PMI, and ARMs.
You are not alone if you feel left behind by loan terminology. Like many
professionals, lenders use a highly specialized language. Don't hesitate to ask
for a translation! This is especially true if you are investigating some of the
more complicated loans with rates that can be adjusted periodically. As you
consider the various loan options, find out what the interest rate will be and
at what point the lender will commit to that rate. If the loan has an adjustable
rate, be sure that you understand how often and by how much your payments can go
up or down. Find out if the loan can be assumed by a future buyer. The lender
isn't trying to confuse you. The mortgage process is complicated, so just keep
asking questions until you understand.