Among the customers of Savings and Loans (S&Ls) are individual savers and residential and commercial property mortgage borrowers. Their traditional role for savings and loans is to accept deposits and make mortgage loans, but it has expanded recently to a focus on one- to four-family residential mortgages, multifamily mortgages and commercial mortgages.

These institutions are growing bigger, and the lines between S&Ls and commercial banks are not as defined as in the past.

Deposit insurance is provided through the Savings Association Insurance Fund, a subsidiary of the Federal Deposit Insurance Corporation.

An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage.

* Also see "Owner Financing"

Seller Versus Buyer Closing Costs

Buyers and sellers often negotiate who will pay certain closing costs, and the results vary depending on the negotiated deal. In fact, it's not uncommon for a sales agreement to state that either the buyer or seller pays all closing costs. The agreement that you and the seller reach must be specified in the sales contract.

Your negotiations could depend on a variety of factors, including the quality of the home, how long the home has been on the market, whether there are any other interested buyers, and how motivated the seller is to sell the home.

The final step before you get the keys to your home is a formal meeting called the closing. It is at this meeting in which ownership of the home is transferred from the seller to the buyer.

Also called a settlement in some parts of the country, the meeting is typically attended by the buyer(s), the seller(s), their attorneys if they have them, both real estate sales professionals, a representative of the lender, and the closing agent. The purpose is to make sure the property is physically and legally ready to be transferred to you.

Several closing costs will be paid at this meeting. These expenses are over and above the price of the property and are incurred when ownership of a property is transferred. Closing costs generally include a loan origination fee, an attorney's fee, taxes, an amount placed in escrow, and charges for obtaining title insurance, and a survey. Closing costs vary according to the area of the country.

When working with an approved lender who uses Desktop Underwriter® -- our advanced automated underwriting system -- a number of costs associated with your closing may be reduced, including mortgage insurance, appraisal fees, and credit report fees.

* Also see "Closing" entry

The HUD-1 Settlement Statement itemizes the amounts to be paid by the buyer and the seller at closing. The (blank) form is published by the U.S. Department of Housing and Urban Development (HUD).

Items on the statement include:

-- real estate commissions,

-- loan fees,

-- points, and

-- escrow amounts.

The form is filled out by your closing agent and must be signed by the buyer and the seller. The buyer should be allowed to review the HUD-1 Settlement Statement on the business day before the closing meeting to know the closing costs in advance.

The HUD-1 Settlement Statement is also known as the "closing statement" or "settlement sheet."

Six-Month Adjustable-Rate Mortgage

This adjustable-rate mortgage (ARM) offers a low initial interest rate for the first six months with an interest rate that adjusts every six months thereafter. The rate caps per adjustment can be 1 percent or 2 percent; the lifetime adjustment caps can be 4 percent, 5 percent, or 6 percent. This type of mortgage may be right for you if you anticipate a rapid increase in income over the first few years of your mortgage. That's because it lets you maximize your purchasing power immediately. It may also be the right mortgage for you if you plan to live in your home for only a few years.

The interest rate is tied to a published financial index. When comparing ARMs that have different indexes, look at how the index has performed recently. Your an approved lender can provide information on how to track a specific index and how to review a 15-year history of the index.

Advantages:

-- Maximizes your buying power immediately, especially if you expect your income to rise quickly in the next few years.

-- Lets you select an index that meets your financial needs.

-- Easier to qualify for due to a low interest rate and a 1 or 2 percent annual rate cap.

Some six-month ARMs let you convert to a fixed-rate loan at certain adjustment intervals. Ask your lender which of their six-month ARMs include this option. Your lender can also provide further specifics about this mortgage option.

Details:

-- You can get a six-month ARM with a term of 10 to 30 years. Typically, they are 10, 15, or 30 years.

-- Can be used to buy one- to four-family, owner-occupied principal residences including second homes, investment properties, and condos, co-ops and planned unit developments.

-- Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)

A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.

Your lender may require you to have a survey of the property performed. This process confirms that the property's boundaries are correctly described in the purchase and sale agreement.

Also called a plot plan, the survey may show a neighbor's fence is located on the seller's property or more serious violations may be discovered. These violations must be addressed before the lender will proceed.

The buyer usually pays to have the survey done, but some cost savings may be found by requesting an "update" from the company that previously surveyed the property.