Second Mortgage Financing

If you are considering borrowing against the equity in your home, or if you are a potential home buyer who wants to learn more about the different kinds of mortgages available in today's market, you may be interested in several publications issued by the Federal Trade Commission.    

A new brochure, Facts for Consumers:  SECOND MORTGAGE FINANCING, suggests what homeowners should consider when they begin shopping for a second mortgage or home equity loan.  It discusses choosing a lender; the meaning of certain mortgage terms, such as "balloon payment" and "points"; the cost of obtaining the loan; and disclosure documents lenders are required to give applicants.  The brochure also discusses what to do if problems occur and where to obtain additional useful information.     

The FTC also has updated its guide to creative home financing for home buyers, THE MORTGAGE MONEY GUIDE.  The booklet explains basic concepts that potential home buyers, or those who may want to refinance their current mortgages, should understand before they begin shopping for home loans.  It discusses the differences between fixed-rate and adjustable-rate mortgages and explains some of the creative financing techniques that have been offered in the past few years, such as buy-downs, balloon payments, shared appreciation, and graduated payment mortgages. The guide also contains a chart comparing different types of mortgages and a table showing monthly payments at different interest rates.