Bad Credit Personal Loan 1

Understanding mortgages: Look before you leap

Do you know what is an FHA loan? Why you should (or should not) pay for points when you take out a mortgage? What about the ins and outs of pre-qualification? What is an ARM and how does it work?

If you say no, no, no, no, you're not alone. According to the results of a recent survey by Zillow, the real estate market online, nearly half of all potential buyers do not understand mortgage basics like these.

Needless to say, this new research is troubling.When you enter a product like a mortgage - which can take up to 30 years and cost you hundreds of thousands of dollars in interest alone - you really want to look before you leap. To help you do that, I have compiled a small quiz true / false:

• Rights are normalized between lenders.

False. Approximately one third of respondents thought that Zillow Lenders are required by law to charge the same fees for credit reports and assessments, but in reality you can - and must - do the trick.

"My general advice is to compare loans in a holistic manner - so you want to look at the rates, charges, and the reputation of the lender," said Erin Lantz, director of the mortgage market Zillow, which hosts a quiz similar to the company survey where you can test your knowledge and learn from your mistakes. Why the matter of reputation? Because you want to close the loan on time - otherwise you could face a logistical nightmare, and the extra money spent to store your belongings, or staying in a hotel. Sites like Zillow and customer feedback LendingTree compilation.

• You always want to pay points up front.

False. Points of mortgages as interest paid in advance - you pay a little more forward and get relief from the current interest rate. One point equals 1 percent of the loan amount, so you need to compare the cost of purchasing the point with how much you save on the loan due to a reduction in your interest rate. In general, paying points makes sense if you plan to be home for a long time, because you will recover what you spent and then some. (There are online calculators to help you do the math - Bankrate.com has a good idea.) Just make sure not to compromise your cash flow by putting all your savings in your down payment and closing costs - you will need some money for an emergency fund, not to mention maintenance .

• If you have been pre-selected, the loan is a done deal.