The Fine Print, Part 2

It has been written and preached by many people that before you sign any legal document, read it first! This caveat has been repeated so many times that when one person (or company) wants to influence the agreement to their own favor they no longer resort to printing the disclaimers in print so tiny you need the Hubble telescope to read it - they simply use legalese, and page after page of disclosure. I was watching a congressional investigation into the credit card companies’ practices about “universal default”, minimum payments, change of due dates and how violating any one of these “disclosed defaults” can result in a new interest rate of upwards of 30%. One of the members on the committee did some investigation, and it was concluded that it would take an equivalent of a 22nd grade education to understand the pamphlets that are included with your credit card.
Home mortgage lenders either invented the technique of burying the requesting party with information and unreadable agreements, or they certainly took the idea and ran with it. The mountain of paperwork that requires reading and signing in order to close a home loan has always been almost indecipherable. It is because of the shear quantity of this paperwork that many borrowers have found themselves having agreed to pre-pay penalties, horrendous adjustable interest rates that change in the 2nd month of the loan, or costs that have risen dramatically from the initial disclosure.
I can’t cure the 22nd grade education requirements, but when it comes to reading the home loan documents before you sign them - ask for a copy the day before. That way you’ll have a dictionary handy, and the time to use it.

Fixed Rates for Conforming Loans (under $417,000) as of 5/24/07 (p.m.) are:
(rates quoted are for 0 point loans, improve rates by half a point for 2 points in fee)

30 year fixed: 6.375% (APR 6.439%) payments are $2,601.54/mo.
15 year fixed: 6.125% (APR 6.231%) payments are $3,547.11/mo.