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COMPARISON SHOP FOR BEST MORTGAGE

SHARE COMPARISON SHOP FOR BEST MORTGAGE

One of the most difficult aspects of buying a house is the financing - figuring out how much you can afford, finding a good lender and choosing a mortgage.

Real estate agents can help you get through this complex process, but it helps to have a good grounding in the basics before you get started.The following information, mostly from the trade publication Real Estate Today, describes the mortgages generally available and the advantages and special features of each.

Reading this will give you a good idea of what you'll find when you start to look for a mortgage and allow you to do knowledgeable comparison shopping.

Loan type: FHA (Federal Housing Administration) fixed rate

Loan term: 30 year, 25 year, 20 year, 15 year

Assumable: Yes.

Who might benefit: First-time buyers with little cash.

Loan type: FHA adjustable rate mortgage

Loan term: 30 years

Assumable: Yes.

Who might benefit: First-time buyers whose income is likely to go up.

Loan type: VA (Department of Veterans Affairs) fixed rate

Loan term: 30 year and 15 year

Loan Limits: $184,000

Assumable: Yes.

Special features: No down payment. Sellers can pay all closing costs and prepaids.

Who might benefit: Only available to eligible veterans and active military personnel.

Loan type: VA adjustable rate mortgage

Loan term: 30 years

Assumable: Yes

Special features: No down payment, but borrowers must qualify at a rate 1 percentage point over the starting rate.

Who might benefit: Buyers short of cash.

Loan type: Conventional fixed rate

Loan term: 30 year, 25 year (hard to find), 20 year, 15 year and 10 year

Assumable: No.

Who might benefit: Buyers who can put 20 percent down and avoid private mortgage insurance. But private mortgage insurance is still cheaper overall than FHA mortgage insurance.

Loan type: Conventional ARM

Loan term: Most 30 year, occasionally 15 year

Assumable: Yes.

Who might benefit: Buyers whose incomes are rising, buyers who won't be in the house more than three to five years.

Loan type: 7/23 and 5/25 programs

Loan term: 30-year loan with five or seven years of level payments, then convert to an ARM.

Assumable: No.

Who might benefit: buyers who Loan type: Community home buyers program.

Loan term: 30 years

Assumable: No.

Who might benefit: First-time buyers, cash-strapped buyers.