This is true, but the biggest traps are actually pretty easy to spot. “Fixed” means that the rate will not increase; a “30 year fixed” is the traditional kind of mortgage your parents and grandparents probably had. “Arm” means that you have a low rate to start and then it increases. “Interest only” or “balloon” also mean that your payments will increase at a given point (usually by a whole lot).

However, that was not really the video I was looking for. There was another one on the same site about a month back that talked about a major danger regarding rates. I can’t find that tape, but at least I can give you the main point.

The video focused on the fact that some mortgages that give you a low rate have a nasty trap in the fine print, where it says that the rate will be raised after a couple of years or so.

Also, if you “qualify” based on the low rate, that has nothing to do with your ability to pay the higher rate just down the road.

Be careful. It wouldn’t be a bad idea to spend some money on a real estate lawyer to go over the mortgage contract before you sign. When I sold my mother’s house, I got a standard realtor contract, but I wanted to understand it. So a real-estate friend of mine went over it line-by-line. On the strength of his suggestions, I got the realtor to change some points that could’ve really socked me. Standard doesn’t always mean fair.

Also– check the references on your home inspector. I don’t know about your area, but in mine basically all you have to do is pay for a license to be a home inspector. If anything comes up that the seller has to fix, be sure and verify that the work was actually done. My seller was supposed to have reshingled the roof. He simply found someone to write a receipt. I was the one stuck with the repair bill (which wasn’t covered by insurance) when it started leaking a couple of years later.

I’ve lived in Richmond for five years. I know the neighborhoods very well now. This development is going up very close to where I live, and even though my current apartment complex has gone down in the last year or two, only a few blocks away things are much, much better. And there’s a neighborhood revitalization push going on.

My biggest problem is going to be the money. Years of under- and unemployment has taken a toll on me financially.

Also, think long and hard about the neighborhood and surrounding area, and where you think it will be heading in 5-10 years. Also get a good, thorough inspection.

chsw