| Too many investors go to closing and sign | | | | fixed-rate loan, you may end up with a |
| documents without ever reading them, taking | | | | surprise at closing in the form of an |
| the word of the "professionals" involved in | | | | adjustable-rate loan that is fixed only for a |
| the closing. This is a huge mistake, unless | | | | certain time period, such as two years. In |
| that professional is your lawyer, and he or | | | | some cases, you may be promised a five-year |
| she has read and understood the loan | | | | fixed rate and end up with a three-year fixed |
| documents. Don't presume that the lawyer you | | | | rate. Moreover, read carefully about how the |
| are paying represents you. | | | | loan adjusts. Some ARM loans can only be |
| | | | adjusted twice a year, others can be adjusted |
| Too many investors go to closing and sign | | | | monthly. |
| documents without ever reading them, taking | | | | |
| the word of the "professionals" involved in | | | | Finally, look at the amount the loan can |
| the closing. This is a huge mistake, unless | | | | adjust each time, and the maximum rate the |
| that professional is your lawyer, and he or | | | | lender can charge over the life of the loan. |
| she has read and understood the loan | | | | All of this will be spelled out in the |
| documents. Don't presume that the lawyer you | | | | mortgage note. (Hint: if the note is titled, |
| are paying represents you. Many banks have | | | | "Adjustable Rate Loan," it's a dead giveaway |
| lawyers that represent them and charge that | | | | that you don't have a fixed-rate loan!) |
| fee to the borrower. | | | | |
| | | | Owner-Occupied Loan-If you apply for the loan |
| Mortgage brokers and lenders are not by their | | | | as investor, the mortgage broker may submit |
| nature dishonest but there are enough shady | | | | it for approval as an owner-occupied loan, |
| characters that try to slip things by on | | | | either by accident or on purpose. Read the |
| borrowers. In some cases, it is a mistake by | | | | documents carefully. Do not sign your name to |
| the lender or a miscommunication between the | | | | any document saying that you promise to live |
| mortgage broker and the lender, both of which | | | | in the property if you aren't actually going |
| result in the borrower getting a different | | | | to do so. In most cases, the mortgage or deed |
| loan than what was promised. | | | | of trust will have a rider (addendum) that |
| | | | says you do not intend to occupy the property |
| The most common things that are incorrect on | | | | as your principal residence. |
| a loan are: | | | | |
| | | | The bottom line my friends, is READ before |
| Prepayment Penalty-The most common "hidden" | | | | you sign. Once you sign, you are out of luck, |
| clause is a prepayment penalty that the | | | | because there's no three-day right of |
| lender does not disclose or that was supposed | | | | rescission for an investor loan! |
| to be omitted. The only way to know for sure | | | | |
| is to read your mortgage note to see if there | | | | Jump to the top of this page |
| is a prepayment penalty clause. In some | | | | |
| cases, a lender may say there is no | | | | Click Here for more info for Read Before You |
| prepayment penalty, but has inserted a "soft" | | | | Sign! |
| prepayment penalty (applies to . In addition, | | | | |
| read carefully how much the penalty is, and | | | | Written exclusively for by Attorney William |
| how long after the loan is originated the | | | | Bronchick, Certified Registered |
| penalty applies. | | | | Nationally-known attorney, Author, |
| | | | Entrepreneur and Speaker. |
| Fixed versus Adjustable Rate-If you pay for a | | | | |