FINANCING & INSURANCE
While considering financing arrangements available through retailers, a home buyer, also, should shop around for other loan sources. Investigate the financial arrangements that can be made through other sources, including commercial finance companies, banks, credit unions, and savings and loan associations. Many of these organizations have home loan programs.

In some situations, the Federal Housing Administration, or the Veterans Administration, will back a loan for the home, as well as for a purchase site and preparation costs, if needed. A federal loan guarantee can result in a lower interest rate, and a longer period in which to repay the loan.

The federal Truth-in-Lending Law requires that lenders disclose the annual percentage rate being applied on loans. The lender must tell you the annual percentage rate you are being charged in simple interest terms. Be sure to check all financing arrangements available. Make certain the finance costs are clear. Do not sign any contract until you understand exactly what you will receive and what it will cost. Do not sign any contract with blank spaces. Do not rely on any oral agreement. Have all terms put in writing and save a completed copy for your records.

Ordinarily, there will be no closing costs or attorney's fees to pay in financing and insuring a home. Title searches are not required. However, if you are purchasing your own property on which to place your home, there may be closing costs. Also, you should have a title search performed to be certain the ownership of the land is clearly defined and there are no prior liens, or claims on it. Title insurance offers additional protection against unexpected claims.

Insurance (fire, theft and physical damage) is required by lending institutions and, usually, is included in the financing package. The cost of the insurance premium for the entire period of the loan can be computed in advance, along with the interest on the loan. Thus, the total insurance premium for a certain number of years will be included in the face amount of the loan before dividing the number of months to determine the monthly payments. This method of handling the insurance makes payment of the premiums automatic, and protects you against any increase in rates which might otherwise apply during this period.

Do not assume, however, that the insurance required by the lending institution is all that you need for your own protection. The required insurance may be just enough to protect the lender's interest in your property; you may want to add extra protection to cover its full value.

If you pay cash for the full purchase price of your home, and do not have a lender requiring insurance, you still should obtain a policy for your own protection. In addition to fire, theft and physical damage insurance on the home itself, you may want a personal effects policy for your belongings. Also, credit life insurance will pay the remaining balance on the home in the event of the purchaser's death, thereby assuring survivors a debt-free home.

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