When you're shopping for a mortgage, be sure you confirm the answers to the following questions:

• What is the total amount of money I am borrowing?
• What type of loan am I taking? Is it a—
• Fixed rate?
• Variable rate?
• A loan with a fixed rate initially, followed by an adjustable rate (a 'hybrid' loan)?
• Interest only?
• What is the interest rate on the loan? What is the APR?
• What are the monthly payments?
• How much are the real estate taxes? Insurance? Homeowner association fees, if any?
• Do the monthly payments include an amount for escrow items such as property taxes and insurance, or will I have to pay those separately?
• Will there be a balloon payment—a large lump-sum of money—due at the end of the loan?

If you are taking an adjustable or variable rate loan, you should also ask:

• What index is the loan tied to and how can I keep track of it?
• What is the margin, or percentage added to the index to arrive at the interest rate?
• When is the first time that the rate and payment can change to be either higher or lower?
• How frequently can the rate and payment change?
• How much can the rate and payment change at each adjustment?
• Are there any annual caps on how much the interest rate and payment can change? What are they? Are there interest rate or payment increase caps over the life of the loan? What are they?
• What is the highest the interest rate and/or monthly payment can ever be?