Mark - Both of the previous answers aren't bad or inaccurate...they just don't necessarily tell the whole story. Many factors play into why a borrower may choose a certain loan program and please don't think it needs to be solely based on a fixed rate. YES, adjustable rates have had a huge impact on the home owner's ability to repay the loan, BUT often times it is b/c the borrower did not take action sooner or may not have fully understood the program when signing...which is quite possibly due to the loan officer's inability to explain.

To fully maximize the potential of a mortgage as an investment and not just a liability, be sure to search out an established Mortgage Planner in your area and not just an "order taking" loan officer. There is true power in understanding the options a mortgage can have & don't be afraid of the market. The water's warm...come on in...just wear the lifevest (Planner)!

Sat May 24 2008, 14:37

Many home buyers fell into the trap of factoring in an increase in income.
“Don’t worry you will make more in a few years than you are right now”. “So it may be tight right now but in the long run you will be better off.” The problem with that thinking is everything will cost more in a few years due to inflation. So a good part of an increase in income will be eaten up by an increased cost of living.
My best advise is buy something you can afford today and for the long term. To many Americans live way above their means.

Thu May 22 2008, 10:34

My sure you get a good faith estimate of your closing cost associated with your load. Your load officer should give you a copy of that and the truth in lending statement as well. These will protect from arriving at closing with unexpected cost and the lender should honor their estimate. Also see if your note will have a pre-payment penalty. Remember the more you credit is run the farther it drops. So get a copy of your credit report and give that to lenders when shopping around.

Thu May 22 2008, 10:33