Jul 07, 2009

Your Mortgage: Any Idea What It Says?

According to the 2009 survey of California homebuyers (by the California Association of Realtors), a full 32% of people buying homes in traditional (non-foreclosure) sales "either did not know or were not sure they knew the terms of their loan."

Yikes! Isn't this how we got into a lot of mortgage trouble in the first place? If there's any cause for hope, I suppose it's that most of these (88%) were fixed-rate mortgages, which are inherently more predictable than the other varieties that were so prevalent a few years ago. No big surprises or balloon payments in store. Nationwide, the trend is toward more use of fixed-rate mortgages.

Still, I would recommend scanning the fine print on your mortgage at least once -- especially if there's a chance you want to sell or refinance within the next few years, in which case you need to watch out for any prepayment penalties.