Ive also heard bad things abiout ARM'* (Adjustable Rate Mortgage).

Ya ARM'* are the pits and being pushed because the Banks know the direction of interest rates.... Bait you now and keep pushing up as the rate goes back up, Sorry John I keep forgetting you live in the foriegn soil to the North. dont they have Home Loan Conselling up there.?

I'm in Illinois...

Home loan counselors? Would that be different from my mortgage lady?

LOL I'm all backwards 2day. Call your BBB and ask them . Yes different and usually nonprofit. It seems like the loan lady would be more helpful but keep an eye on what she presents, as she is in it for herself. Have you tried for help with the local FHA office??Are you a first time buyer because there are some there is a Fed program and alot of States have one too. The important thing is be persistant and something will work out. definatly dont go for an ARM or one of those do it this way for a couple years and we'll renogotiate deals. Interest rates have climmed a little and with one recent Fed interest hike (To Banks) done and more to come that is not a good choice.

Here is an example but I'm not endorsing, check it out and do a yahoo/ google search for illinios First Time Home Buyers.

http://www.downpaymentsolutions.com/...illinois.shtml

The important thing is to read all the fine print. While some are there to help... others are out to scalp ya.

another here . these are Mortgage companies that hook you up becasue they can get FHA gurauntees on the money they are lending you.
http://www.ameristarmadison.com/info.htm

[off topic]
Okay, so you are 35, drive a bimmer and put down 75% on your house... I gotta ask: what do you do for a living?
[/off topic]

Edit :

Guess I'm in the wrong business!

An 80-15 might work in your situation, with 5% down... then you can avoid PMI ... your second loan would have a higher interest rate, but you can control that, just pay it off early... in any event, interest is tax-deductible, I don't think that PMI is

And I would do fixed rate if I were you... ARM rates are on the rise... and although the fixed rates are not at "record lows", they are still low compared to what they were years ago.