Be sure you
understand how much your monthly payments will be and what they cover. Mortgages
First Associates, LLC will be able to give you this information in advance. With
some loans, you will be required to make monthly payments on the principal and
interest. With other loans, you may be required to pay interest only on the
borrowed amount. With these loans, your monthly payments will not reduce the
principal amount of the loan. With such a loan, you will be required to pay back
the entire borrowed amount at the end of the loan period. These loans are
popularly known as "balloon loans." If your loan has a balloon payment, you
should consider how you will arrange to repay the entire amount when it becomes
due.
On "home equity lines," the mortgage company does not have to give you the
exact amount of the monthly payment, but must explain how it is figured. This is
because the borrowed amount will vary and your outstanding balance will change
if you use the line of credit. However, if your monthly payment term is 5% of
the outstanding balance and your outstanding balance is $5,000, your minimum
monthly payments would be $250
