Tips & Traps When Mortgage Hunting, 3/e

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ISBN: 9780071448925 | 0071448926
Cover: Paperback
Copyright: 6/8/2005

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WITH HUNDREDS OF MORTGAGES NOW AVAILABLE, HOW DO YOU CHOOSE THE ONE THAT'S RIGHT FOR YOU?Congratulations! Chances are you're buying a new home or refinancing an old one and are now in the process of applying for a mortgage loan. Before making any decisions that could affect the next 30 years of your life, arm yourself with this edition ofTips & Traps When Mortgage Hunting.There are so many loans now available for practically every situation. America's leading real estate authority, Robert Irwin, will help you cut through the confusion and find the mortgage that fits your needs and is right for your budget. If one of your biggest concerns is paying too high an interest rate, or shelling out excessive cash for closing costs, this book will save you money by showing you how to find the lowest rates available. In easy-to-understand language, Irwin explains... When to use a mortgage broker and how to find the right one How to use the latest technology to conduct a mortgage search online How to shop for and lock in the lowest interest rate How to avoid being denied a mortgage because of a credit problemThis clear and comprehensive guide will provide you with the most up-to-date information and insider tips to help you avoid the traps of mortgage hunting and find the right mortgage at the right,/p>

Acknowledgments

xii

1. How Do I Get a Purchase Mortgage?

(24)

Find the Loan or Find the House?

(1)

Alice's Open House

(1)

Al, the Mortgage Broker

(4)

Enter PMI

(3)

The Credit Rating

(2)

The Mortgage Payment

(2)

The Dreaded Closing Costs

(1)

No Closing Cost Mortgages

(2)

Getting the House

(1)

Manipulating the Mortgage

(2)

The Final Mortgage

(1)

The Closing

(3)

HUD-1 Disclosures

(3)

2. Mortgage Selector

(32)

Fixed-Rate Mortgage

(1)

Fixed-Rate Mortgage with Balloon

(1)

Adjustable Rate Mortgage (ARM)

(1)

Fixed Rate with ARM

(1)

Fixed Rate/ARM with One-Year Adjustments

(1)

Low-Rate Teaser Adjustable

(1)

Capped Interest Rate ARM

(1)

Capped Payment ARM

(1)

Adjustable with One-Time Conversion to Fixed

(1)

Interest-Only Mortgage

(1)

Low-Down/No-Down Conforming Mortgage with PMI

(1)

Low-Down/No-Down Mortgage without PMI

(1)

No Down Plus Closing Costs Covered Mortgage

(1)

125 Percent Mortgage

(1)

Low/No-Documentation Mortgage (Liar's Loans)

(1)

Jumbo Loan

(1)

Bad Credit Mortgage

(1)

Second Mortgage-Home Equity Loan

(1)

Seller's Mortgage

(1)

401(k) Loan

(1)

Biweekly Mortgage

(1)

Bridge Loan

(1)

Construction Loan

(1)

FlexiLoan

(1)

No Credit Mortgage

(1)

Land Loan

(1)

Reverse Equity Mortgage

(1)

FHA-Insured Mortgage

(1)

VA (Veterans Administration) Mortgage

(1)

40-Year Mortgage

(2)

3. Critical Questions to Ask When Getting a Mortgage

(10)

Can I Buy for Nothing Down?

(1)

How Do I Determine the Mortgage Payment?

(1)

Should I Put More Money Down, If I Can?

(1)

What Are Points?

(1)

Where Do I Get a Mortgage?

(1)

How Long Does It Take to Get a Mortgage?

(1)

What Is Preapproval and Should I Get It?

(1)

How Do I Lock in a Low Interest Rate?

(1)

How Much Will My Mortgage Fees Cost?

(1)

Can I Get a Bigger Mortgage Than My Lender Offers?

(1)

Is There Any Advantage in Getting a Shorter-Term Mortgage?

(1)

How Is a Mortgage Different from a Car Loan?

(1)

How Much Information about Myself Must I Tell the Lender?

(1)

What Are the Steps Involved in Getting a Mortgage?

(1)

What's the First Thing I Should Do to Get Started?

(1)

4. How Do I Get Preapproved?

(6)

Does Preapproval Really Help with the Purchase?

(2)

What Should Go into the Preapproval Letter?

(1)

Who Should Issue the Commitment Preapproval Letter?

(1)

How Much Does the Preapproval Letter Cost?

(2)

5. Where Do I Get a New Mortgage?

(10)

Should I Try a Bank or an S&L?

(1)

What Is a Mortgage Banker?

(1)

What Is a Mortgage Broker?

(2)

Credit Unions

(1)

Online Lenders

(1)

What Are Secondary Lenders?

(1)

What Is the Different between a "Conforming Loan" and a "Portfolio Loan"?

(1)

What Is a "Portfolio Loan"?

(1)

How Do I Get a Mortgage, Fast?

(4)

6. Loans for Prime and Subprime Borrowers

(18)

How Do Lenders Evaluate You?

(1)

How Do You Stack Up?

(1)

Do You Fit the Profile?

(7)

Who Actually Sizes You Up?

(1)

What's Underwriter Approval?

(1)

Should You Get Discouraged?

(1)

Subprime Mortgages

(1)

How Much Will It Cost for a Subprime Mortgage?

(4)

Quick Quiz-Rate Yourself

(2)

7. Can I Improve My Credit?

101

(10)

Can I Explain Away a Problem?

102

(1)

Some Explanations a Lender Might Accept

103

(1)

What If the Credit Reporting Agency Made a Mistake?

104

(1)

Will the Credit Agency Correct the Mistake?

105

(1)

What If I Have Little or No Credit?

106

(1)

Where Do I Begin to Establish Credit?

106

(2)

What If I Need to Establish Credit Instantly?

108

(1)

Should I Consider a Cosigner?

109

(2)

8. Mortgages for the Self-Employed-No-Doc Loans

111

(4)

How Do I Prove My Income If I'm Self-Employed?

112

(1)

What Are Mortgages without Documentation?

113

(1)

Other Alternatives for the Self-Employed

114

(1)

9. Can I Cut My Mortgage Costs?

115

(12)

Is There Any Government Protection for Me?

115

(1)

What Is the Good Faith Estimate?

116

(1)

What Other Disclosures Will I Be Given?

117

(1)

What Can I Do If I Find Something Wrong?

118

(1)

When Should I Check Out the Costs?

118

(1)

What Are Typical Mortgage Settlement Costs?

119

(5)

What about a Prepayment Penalty?

124

(1)

What If I Want to Complain about a Lender?

125

(1)

A Great Booklet to Check Out

125

(2)

10. How Can I Cut My Mortgage Payments?

127

(10)

Using a Balloon Payment

128

(1)

What Are 5/30, 7/30, or 10/30 Mortgages?

128

(1)

What Is a Buy-down?

129

(1)

Who Gets Charged for the Buy-down?

130

(1)

What Are the Types of Buy-downs?

131

(1)

What Is an Adjustable Rate Mortgage?

132

(1)

What's the Big Advantage?

133

(1)

What's a Convertible Mortgage?

133

(1)

How Does a Convertible Mortgage Work?

134

(3)

11. Introduction to No-Down Payment Mortgages

137

(4)

What Is LTV and CLTV?

137

(1)

Are You a Prime Borrower?

138

(1)

What about Government Loans?

138

(1)

What about Closing Costs?

139

(1)

What If I'm Not a Prime Borrower?

139

(2)

12. Can I Cut or Eliminate Points?

141

(6)

Do You Believe in the Tooth Fairy?

141

(1)

Why Points?

142

(1)

Trading Interest for Points

142

(1)

Should You Pay the Points or Pay a Higher Interest Rate?

143

(2)

The Bottom Line?

145

(1)

What about Zero-Cost Mortgages?

146

(1)

13. What Is a Jumbo Mortgage?

147

(4)

Getting a Jumbo Loan

147

(1)

Where Do I Get a Jumbo?

148

(1)

Why Are They Also Called Portfolio Loans?

148

(1)

Can a Jumbo Be in Any Format?

149

(2)

14. Should I Opt for a Biweekly Mortgage?

151

(8)

What about a "Biweekly" Mortgage?

151

(1)

How Do I Establish a Biweekly Mortgage?

152

(1)

Can I Set Up a Biweekly Payment Schedule Myself?

153

(1)

Why Not Simply Get a 15-Year Mortgage?

154

(1)

Will I Have Higher Payments?

154

(1)

Still Don't Get How to Save Money by Paying Off Sooner?

155

(1)

Is There a Better Way?

156

(1)

What's the Advantage?

157

(2)

15. Can I Get the Seller to Finance Me?

159

(16)

How Does Seller Financing Work?

160

(1)

Will Sellers Cooperate?

161

(1)

Can Creative Financing Cut My Monthly Payment?

162

(1)

Can Creative Financing Cut My Costs and Red Tape?

163

(1)

What Is a Wraparound?

163

(1)

How Does a Wrap Work?

164

(1)

What Are the Ideal Conditions for a Wrap?

165

(1)

What If the Seller Wants to Wrap a Nonassumable?

166

(1)

What to Include When You Ask for Seller Financing

166

(6)

Will a Seller Give Me a First Mortgage?

172

(1)

Contract of Sale

172

(1)

How Do I Negotiate with the Seller?

173

(2)

16. Should I Consider an FHA or a VA Mortgage?

175

(8)

FHA Mortgages

176

(2)

VA Mortgages

178

(3)

Impound Accounts

181

(1)

Maximum Loan Amounts

181

(2)

17. What's the Advantage of an Early Payoff?

183

(6)

Can You Pay It Off?

183

(1)

Should I Consider Equity Return?

184

(1)

How Do I Make the Payoff Decision?

185

(1)

What about Tax Savings?

186

(1)

The Problem with Real Estate Is Lack of Liquidity

186

(1)

What's the Value of a Paid-Off Home?

187

(2)

18. How Do I Cancel My Private Mortgage Insurance?

189

(4)

How Much Does It Cost?

190

(1)

Must You Pay PMI for the Life of the Mortgage?

191

(1)

How Do I Get the PMI Removed If My House Has Appreciated in Value?

191

(1)

Is There Any More Government Help Coming?

192

(1)

19. First-Time Home Buyer and Other Special Programs

193

(4)

What If I'm a First-Time Home Buyer?

193

(1)

Programs Other Than MCC

194

(1)

How Do I Find Out about the Various Mortgage Programs?

195

(2)

20. Reverse Equity Mortgages

197

(4)

How Does a Reverse Equity Mortgage Work?

197

(1)

What Happens If You Outlive the Equity in the Property?

198

(1)

FAQs on Reverse Equity Mortgages

198

(3)

21. Does a New Mortgage Affect My Taxes?

201

(10)

Are Points Deductible?

202

(1)

Can I Deduct the Points in the Year I Pay Them?

202

(2)

Can I Deduct Interest Paid on a Mortgage?

204

(2)

What about the Tax Considerations When I Refinance?

206

(1)

What about Tax Consequences When I Sell?

206

(1)

What about the "Up to $500,000 Exclusion"?

207

(1)

How Does Mortgage Interest Compare to Personal Interest?

207

(1)

What about Mortgages That Are Forgiven?

208

(1)

What about Late Payments on a Mortgage?

208

(1)

What about Interest on a Mortgage That Is Over and Above the Value of the Property?

208

(3)

22. When Should I Refinance?

211

(6)

What If Interest Rates Are Falling?

211

(3)

What Are the Problems Associated with Refinancing?

214

(1)

Should I Get a Debt Consolidation Mortgage?

214

(1)

What about Home Equity Loans?

215

(2)

23. Understanding Adjustable Rate Mortgages

217

(12)

What's the Teaser Rate?

217

(1)

Beware of Underqualifying Because of Teasers

218

(1)

What's the Index?

219

(2)

How Do I Decide Which Index to Use?

221

(1)

What's the Margin?

222

(1)

What Is the Adjustment Period?

222

(1)

What about Interest/Payment Rate Caps?

223

(1)

Are Interest Rate Caps Beneficial?

224

(1)

What about Monthly Payment Caps?

224

(1)

How Do You Find Out If Your Mortgage Has Negative Amortization?

225

(1)

What Are the Steps?

226

(3)

24. How Do I Prepare for the Loan Closing?

229

(6)

Who Should I Take to the Closing?

229

(1)

What Should I Bring to the Closing?

230

(1)

What Should I Challenge?

231

(1)

What Will I Need to Sign?

232

(3)

Appendix A Amortization Table

235

(2)

Appendix B Mortgage Terms

237

(16)

Index

253

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Tips & Traps When Mortgage Hunting, 3/e

Summary

Author Biography

Table of Contents

Supplemental Materials