Q: We are first-time homebuyers and are confused about the many mortgage programs. Can you summarize what is available?

A: First, go to the Consumer Financial Protection Bureau website (www.consumerfinance.gov). There you'll find a wealth of information about all aspects of buying a house or condominium.

Once you have signed a contract for the purchase of your new home, condominium or cooperative apartment, and assuming you do not have all of the cash in your bank account, you will need to obtain a mortgage loan.

There are many different loans on the market — and many different loan programs from which to choose. You should contact at least three different lenders, and ask them to give you a list of the loans they offer. Take careful notes, and remember one important thing: Do not give any lender money until you are absolutely certain this is the lender — and this is the loan — you want to obtain.

The three basic loan programs are as follows:

Conventional. This type of loan is generally available from a bank, mortgage broker or credit union. Within the category of conventional loans, there are various options available, such as a fixed 30-year mortgage or an adjustable-rate mortgage, called an ARM.

ARMs adjust on a periodic basis, although in most cases they will run for a period of 30 years. Generally speaking, the shorter the term of the adjustment (such as a one-year ARM), the lower the initial interest rate will be. However, when the adjustment period comes around, the interest rate for the next adjustment will either go up or down, depending on the economy.

When interest rates are falling, an ARM seems like a good deal. However, when interest rates are rising, the consumer who obtains a one-year ARM is almost guaranteed to see an interest rate hike as high as 2 percentage points at the end of the first year.

All lenders have, or should have, a written explanation of the way their ARM works. Read it carefully and seek aid from financial and legal advisers if you have questions.

Department of Veterans Affairs loan. This type of loan is generally available from mortgage brokers. It is only available to military veterans through the VA. There are certain conditions that you must meet if you want a VA loan, and you should make sure that your potential lender provides you with all the details. Your sales contract has to be adjusted if you get a VA loan. If the appraisal is less than the contract price, either the buyer must let you out of the deal, the price must be reduced or you must pay cash for the difference.

Federal Housing Administration loan. This loan is insured by the FHA. It will guarantee the lender against a default by the borrower, but the borrower will have to pay an insurance premium for this coverage. Once again, there are conditions that must be met before such loans can be obtained; you should discuss these terms with the potential lender.

It is not possible in a short article to fully discuss the various mortgage loans on the market. Furthermore, creative lenders are always coming up with new programs. However, not all these loans will be in your best interest.

You should shop around, and don't accept the first loan offered. After all, remember that the life of the loan may be as long as 30 years, and that's a long time to be stuck with an uncomfortable loan.

Benny Kass is a practicing attorney in Washington, D.C., and in Maryland. He does not provide specific legal or financial advice to any reader. Readers may email him, but he cannot guarantee a personal response.

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