Other Finance Related Services - The following directory listings on DebtConsolidationLoan.com are provided to assist you with the management or consolidation of your debt. Also, while on this site, feel free to shop for other financial services such as auto insurance and home equity loans.
- Personal Loan Consolidation - This type of lending is most often structured as an unsecured debt. This means your personal property or house will not used as collateral. Your approval (or denial) will usually be based upon your payment / credit history and your ability to repay the loan. This type of credit is also often called a signature loan.
- Debt Settlement Service - Too much debt? List of companies providing this alternative to bankruptcy that provides for debt negotiation and arbitration services for those that need to eliminate debt.
- Debt Management Help - Having trouble keeping up with your monthly credit payments? Compare debt management companies in this online list that can try amd help you get a grip on your personal financial situation.
A Shopper's Guide to Bank Products and Services
Questions to Ask Before Signing a Mortgage Loan
What will my monthly payment be? How much and how often could the payment go up?
Make sure you can meet the loan payments now and in the future, especially if you're considering an adjustable-rate mortgage (ARM). "ARMs can be attractive because you're paying less money initially, but understand that those payments are likely to go up," said Cynthia Angell, a Senior Financial Economist at the FDIC. "If interest rates rise and you've got an ARM, you've got to be sure you could handle the higher monthly payments." It's also important to understand the index your interest rate would be tied to and to get a sense of its volatility.
Is there a "balloon" payment? If so, when is it due, and how much will I owe?
A balloon payment is a large, lump-sum payment due at the end of the loan term. A balloon feature may keep monthly payments low in the early years, but the loan must be refinanced or paid off in full at the end of the loan term. For some borrowers, a balloon loan can be very appropriate. For others, the consequences can be costly, perhaps even resulting in the loss of their home if they can't repay or refinance the amount due.
What is the Annual Percentage Rate (APR) for this loan? Is this the lowest rate you can offer?
The APR is the cost of the loan expressed as a yearly rate, and it includes the interest rate, "points" (each point equals one percent of the loan amount), broker fees and certain other charges. Comparison shop among several lenders, then negotiate the best possible terms.
Are any points, fees or other charges being added to the loan balance and increasing my payments?
If so, how much extra will I pay each month and over the life of the loan? Investigate whether it makes sense for you to pay these charges up front or roll them into the loan.
Does the loan amount include fees for credit protection that would cover the loan payment if I die, become ill or unemployed?
If so, why, and how much will it cost me in up-front, monthly and total fees? First ask yourself if you really need this type of coverage. You may not need the extra protection, or you may get a better deal from your insurance agent or other sources. If the lender requires this kind of coverage, it must tell you and include the cost in its calculation of the loan's APR. Otherwise, the coverage is entirely voluntary.
Is there a prepayment penalty if I pay off the loan early by refinancing or selling my house?
Some lenders offer loans with prepayment penalties at lower interest rates than the same loans without prepayment penalties. Depending on your circumstances —for example, if you do not expect to move during the period subject to a prepayment penalty — a loan with a prepayment penalty can be a good alternative. However, if market interest rates drop, you may miss out on a chance to refinance if the prepayment penalty on your loan is too high.
Also see:
- Home Equity Loan Financing - Questions You Should Ask Before Getting a Home Equity Loan.
- Mortgage Glossary - Need help understanding home loan financing terminology? This glossary of terms provides definitions for some of the most common mortgage-related words and phrases.
- Mortgage Loan Calculator - Plug in the numbers and estimate a home loan payment using this simple mortgage calculator.
FDIC Consumer News is published by the Federal Deposit Insurance Corporation
FDIC Consumer News is produced quarterly by the FDIC Office of Public Affairs in cooperation with other Divisions and Offices. It is intended to present information in a nontechnical way and is not intended to be a legal interpretation of FDIC or other government regulations and policies. Mention of a product, service or company does not constitute an endorsement.
Find current and past issues of FDIC Consumer News at http://www.fdic.gov/consumernews. Refer to this same index to locate the issues that are specially formatted for being reprinted in any quantity.
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Last updated on 5/17/2005