PORTFOLIO. Tips and trends that affect your money

The convertible adjustable mortgage When interest rates started ticking up a few months ago, homebuyers started thinking again about adjustable-rate mortgages. But even though ARMs meant people who couldn't qualify at higher fixed rates could now buy a home, others still prefer the certainty of a fixed rate.

Now many lenders are giving them a chance to have it both ways. First Union Mortgage Corporation in Charlotte, N.C., for example, has begun offering a convertible ARM. Like a normal ARM, this starts with a rate that's lower than a fixed-interest mortgage, has a 6 percent lifetime cap and a 2 percent annual cap.

However, after the first year and before the end of the fifth year, the loan can be converted to a fixed-rate mortgage, for a fee of one percent of the loan balance, plus $250. So with an outstanding balance of $80,000, the conversion would cost $1,050. Convertible ARMs are available in 15-year, 20-year, 25-year, and 30-year terms.

Similar loans are being offered by several other lenders, including Home Owners Federal Savings & Loan in Boston, the Boston Five Cents Savings Bank, and Sterling S&L in Los Angeles. Uncommitted loan commitments

Those rising mortgage rates also caused some problems for many people in the midst of buying homes. With rates going up, many lenders ``unlocked'' mortgage rate commitments, so a person who thought he was getting a 10 percent mortgage suddenly found his rate was 10 or 11 percent. For some people, this meant they could no longer afford the loan, or the house.

In some states, attorneys general have sued lenders to force them to honor mortgage commitments, while several state legislatures pushed through bills to require mortgage lenders to give borrowers an estimated closing date, to tell them when interest rates will be set, and to say how long a given rate will be honored.

People who think a lender has reneged on a mortgage commitment may be able to get help from the Mortgage Bankers Association, through its toll-free hotline: 800-634-7067. Home equity tips from the bankers

Before signing up for a home equity loan, consumers might want to take a few minutes to read ``What You Should Know About Home Equity Loans.'' It's a useful brochure that talks about the how these loans work, how to avoid aggressive lenders, and what questions to ask. Many banks have free copies, or you can get one by writing to ``Home Equity Brochure,'' American Bankers Association, 1120 Connecticut Ave., NW, 8th Floor, Washington, DC 20036. Soaring CD rates

Mortgage rates aren't the only thing going up. Certificates of deposit are now offering savers who want federal insurance reason to smile.

In many places, six-month CDs are paying more than 8 percent, while one-year CDs are yielding around 9 percent. If interest rates are going to keep going up for a while, it's probably a good idea to keep maturities short.

Although a six-month CD may not pay as well as one-year certificate, you will be able to ``trade up'' to a higher yield sooner, assuming rates are higher in six months.

Also, look for a bank that compounds interest at least daily; avoid weekly, monthly, or quarterly compounding, and simple interest which means no compounding. Does your credit rating get sand kicked in its face?

Rebuilding your credit rating's muscles takes time, but it's worth the effort if it lets you borrow for real necessities.

Most people don't find out they have a bad credit rating until they're turned down for credit or if a landlord refuses to rent an apartment because of a bad credit report.

If this happens to you, you have the right to a free examination of your credit report, says the Consumer Credit Institute of the American Financial Services Association. If you're just curious, it should cost less than $10.

If the negative information in your file is correct and shows you to be more than 90 days behind on some bills, try to correct this situation as quickly as possible.

If being late in payments was a temporary problem caused by a specific situation, like losing a job, medical bills, or helping a family member in an emergency, talk it over with your creditor. You might be able to work out an agreement that would let you make payments over an extended period. Ask the creditor to report payments of past-due amounts to the credit bureau.

Of course, if any of the information in your credit report is wrong, the credit bureau must take steps to correct it promptly. Gold funds shine - then begin to fade

If you've been watching the list of top-performing mutual funds at the bottom of this page for the last few months, you may have noticed the shining performance of gold funds. Over the past year, some gold funds have increased in value by more than 140 percent.

But the more recent record hasn't been so hot. While some funds have more than doubled investors' money during the year, they have posted negative returns for the month.

This is a common pattern for ``hot'' mutual fund groups: After a few months, or maybe a year or so, they fade. This pattern is especially common with precious metals funds, and sector funds that specialize in one particular industry, like bank stocks, technology companies, or transportation companies. That's why most experts recommend funds of this type be watched closely and that they make up no more than 10 to 15 percent of your total investment portfolio. If higher rates don't work, try coupons

Airlines, hotels, credit cards, and car rental companies offer bonuses or coupons for more miles, gifts, or discounts. Now, some banks are getting into the act. PSFS in Philadelphia has a ``Rate Builder'' program that lets customers open a new account and accumulate coupons good for one percentage point additional interest on certificates of deposit. Customers can also get lower rates on some loans.

Bank of America in California, meanwhile, sent out coupons with its monthly checking account statements that customers can redeem for cash bonuses or fee waivers. A coupon might be good for a $20 bonus for buying a CD, or a waiver on the $400 charge for a home equity line of credit.

Other institutions will certainly be watching to see how these banks' programs are received. In the meantime, of course, a certificate with a higher rate, more frequent compounding, or a car loan with a lower rate - all without coupons - may still be a better deal than a bundle of coupons.

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