[Wrote this back in 2009 and went looking for it tonight because … well, just because.]

Read the Note. If you’re thinking of taking out a loan from a bank and you would let me give you one word of advice, it would be just that: Read the Note. Okay, it’s actually three words. I can’t count. That’s what makes me such an improbable banker. But I know this one thing about banking that’s vitally important: Read the Note.

When you get to the closing, which will usually be handled by a title company, they want you to sign your papers in a big hurry and get you out of there. It’s not because they don’t like you, it’s because they’ve got a lot of loans to close every day, they’ve probably alotted no more than an hour for your closing, and it’s likely their office is understaffed. They’re a little pressed for time. Don’t worry about that. Go ahead, scribble your name as fast as you can on all the other documents, but before you do, ask to see the Note, and read it, every word, as tedious and boring as that might be, before you sign anything else. Take as long as you want. You literally owe it to yourself.

The Note is your contract with the bank. It spells out in black and white exactly what you owe, broken down to the penny: the amount you borrowed, the amount you’ll have to pay in interest, the interest rate, the monthly payment, and the penalties you’ll have to cough up if you don’t make your payment. There’s got to be a Note for any loan you make. Sometimes it’s called something else, a Security Agreement or whatever, but regardless of the name they give it, it’s your promise to pay. You should not only know it backwards and forwards, you should have a copy of it in your desk.

Any time you have a question about your loan, you should take out the Note and read it to see if you can figure out the answer, because I guarantee that if you call without reading the Note first to see if the answer’s in there, the guy you talk to will not only be reading the answers straight off the Note to you, he’ll be thinking to himself what a great big doofus you are. You don’t want that, do you? No, of course you don’t. So read the Note.

Probably the most important thing to understand about your loan is how the interest will be figured. It seems to be the question most customers call their banks to ask about, even thought it’s right there in the Note. They have to tell you how they plan to figure the interest. Why wouldn’t you want to know exactly how they do that? And don’t skim over it, thinking it’s too hard. It’s multiplication. It’s one step up from counting on fingers. You learned multiplication in grade school. Anybody can do it. Hell, I can do it, and I have a high school education. Okay, I have a college education, too, but my major was in English Lit. We didn’t do a lot of math in Expository Writing 101.

Here’s how simple it is: The interest I pay on my mortgage loan is always the same. I could figure it out with a pencil and paper. I could even do it in my head, if I wanted to waste about a half hour and bore myself numb, but I’d rather use a calculator. It takes only seconds that way. Goes like this: Balance times rate divided by three sixty times thirty equals my monthly interest. And the Note spells it out just as plainly as that. After you do it two or three times it’s as easy as balancing a checkbook. Tell me you can balance your checkbook. Or, rather, don’t tell me you can’t.

Besides how you’ll be charged for interest, the Note will tell you whether or not your loan balloons. That means your last payment will be more than all the rest, sometimes thousands of dollars more. Balloon loans aren’t so popular now but they were for a while because some people couldn’t get any other kind of loan. I’m not sure how they were easier to give to people who weren’t making enough money or didn’t have good enough credit for more conventional loans; that’s the part of banking I truly don’t understand, but somehow they were.

When My Darling B and I were shopping around for a mortgage we were offered a balloon. The loan officer had to explain to us what it was. But even if he hadn’t, or if he had but we weren’t paying attention, the Note would have spelled it out in the starkest terms imaginable. If we’d actually agreed to such a thing but then come to our senses and stopped to read the Note before signing, the terms would have hit me like a punch in the face from Mohammed Ali. “Let’s see if I’ve got this right, Mister Loan Officer: you’re offering me the chance to make fifty-nine payments of a thousand dollars and one payment of one-hundred ten thousand dollars? Sounds great! And will you also please pull all my fingernails out with a pilers, too? And hit me on the head with a brick? Thanks!” Why did anybody ever agree to these things? I still don’t understand it.

Read the Note. I just can’t say it too many times. If your agent scheduled the loan closing at nine in the morning and you’re not a morning person, tell him to reschedule it. If you get to the closing and you can’t find your glasses, call it off. Don’t let anybody pressure you into signing a damn thing just because the papers are ready and everybody’s in a hurry to get out of there. And if you don’t understand any part of it, don’t sign it. Think of it this way: If it’s a thirty-year home mortgage, you’ll be obligated to pay for it for at least half of your remaining life. Read the damn Note.