Released: June 03, 2006

Do you know your adjustable rate loan?

Source: By Sandra Fleishman, Washington Post (Free Registration)

Pat Smucker knows exactly how much she owes on her house, what the loan terms are, how the interest rate has doubled in the past four years and that the rate could go even higher before her retirement home in Florida is finished.

But then, the Sterling resident has a big advantage over most borrowers: She worked in banking for 33 years before retiring recently. So she’s well aware of myriad loan types and terms and the relative risks of new loan products.

Smucker and her husband, Joe, a retired federal government worker, were among the most clued-in home borrowers interviewed at random recently at Reston Town Center. Though their mortgage was the furthest thing from their minds as they cooled down from a bike ride to the mall, the couple agreed to participate in an informal survey of what borrowers know about their mortgage loans.

The sidewalk survey was just a simple quiz. What do you know, and when did you know it? Eight out of 11 mortgage holders knew quite a lot - a decent percentage, wouldn’t you say?

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