Insider Jeff Fleming

Read the Fine Print!

Taking out a mortgage for a home is one of the largest commitments we'll make in our lives and shouldn't be taken lightly. This week, Jeff offers tips for getting exactly what you want out of a mortgage loan--plus advice for diversifying investments.

Dear Jeff:
In 1991 I purchased a new mobile home and lot in a trailer court. When it was financed, I told the people at the bank that I wanted a 10-year mortgage! I still have $12,000 to pay and a rate of 10.5 percent. I went to the bank to see if I could get a lower percentage rate by refinancing, and they told me that I couldn't do that! My home won't be paid off till 2005.

I am 66. I still work every day. I need guidance as to what I should do. It was my hope that it would be paid for this next year. I am a woman and alone. That makes things more difficult.

Thanks for your help, Audrey

Jeff Says:
Your loan officer is sitting across the desk from you and says, "We approved your loan, but we just need you to sign some papers." You get out your favorite pen and start signing the massive stack of papers in front of you in all of the places your loan officer points out. "Initial here. Sign your full name here. Again on these pages, and don't forget to date it also." You finally finish. Hooray! You both stand up and shake hands. Until that very moment, you did not realize just how sweaty your palms really were. Sound familiar? Imagine how nervous you would have been had you taken the time to read everything put in front of you the way we all know we should.

I am sure that it is now painfully clear to you that you need to read and to understand your loan agreement before you sign it. Unfortunately, most people do not, despite the fact that it is a legally binding contract and contains the provisions by which you and the lending institution must abide. In other words, you are stuck with the terms to which you have agreed, regardless of whether or not you have read the contract.

My suggestion to you is to find your paperwork and read it now. Was your mortgage actually for a term of ten years as you recall? If it is, you are in great shape. If your contract is actually different than what you thought you were getting, it will be very difficult to get any satisfactory results. However, you may want to talk to an attorney who can review your documents personally and advise you accordingly.

My final piece of advice for you is to encourage you to talk to other mortgage companies about refinancing your loan. The fact that your existing mortgage company told you that you could not refinance the loan with them certainly does not preclude you from trying to refinance it elsewhere. You can even shop for refinancing loans online from sites like Quicken and Eloan. I hope your efforts are successful, and I plead you to read your new documents carefully.

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