Description
Book SynopsisThe only guidebook that shows you how to finance any property--with or without bank approval
Would you like to discover all of the many ways that you can finance real estate? Want to learn how to cut your financing costs, avoid pitfalls, and negotiate the best terms? Then let Gary Eldred''s 106 Mortgage Secrets All Borrowers Must Learn--But Lenders Don''t Tell, Second Edition guide you. Fully updated, this practical guide explains how today''s changing mortgage market really works. Unlike other mortgage guides, this book goes beyond traditional bank-originated loans and shows you how to benefit with seller financing, assumables, subject-to, wraparounds, lease options, foreclosures, and other money-saving possibilities.
106 Mortgage Secrets also protects you from the sharp practices of loan reps that have recently sparked Congressional hearings and multiple state investigations. In addition, Eldred shows how and why the right financing decisions can add tens (a
Table of ContentsPreface to the Second Edition xi
Introduction: Use OPM to Achieve All That You Really Want xiii
1 Affordability Depends on You—Not a Lender 1
Secret #1 Affordability depends on you 1
Secret #2 How you choose your property and arrange financing can add (or subtract) tens (or even hundreds) of thousands of dollars to (from) your net worth 6
Secret #3 Separate the emotional from the financial 7
Secret #4 Align self-talk with your priorities 9
Secret #5 Envision the propert(ies) you would like to own 5, 10, or 15 years from now 15
2 Increase Your Borrowing Power 17
Secret #6 10,000 lenders set their own standards 17
Secret #7 You can make your qualifying ratios look better 20
Secret #8 Lift your qualifying income 23
Secret #9 Reduce your debt 27
Secret #10 Use compensating factors to justify higher qualifying ratios 30
Secret #11 Never fib to a lender 32
Secret #12 Can’t qualify? Enlist a cosigner, co-borrower, or co-owner 34
Secret #13 Let tenants pay your mortgage 36
Secret #14 Don’t change your loan status 42
3 Slash Your Cost of Interest 43
Secret #15 Many borrowers who want a fixed-rate loan should choose 15 years, not 30 or 40 44
Secret #16 Lower interest rates mean big savings 48
Secret #17 Lower rates magnify borrowing power 49
Secret #18 ARMs sometimes offer greater borrowing power, lower costs, with risk you can manage 51
Secret #19 State and local housing finance agencies offer lower-interest mortgage loans 53
Secret #20 Assume a low-interest-rate mortgage 54
Secret #21 “Assume” a nonassumable mortgage 57
Secret #22 Save $1,000s with a Mortgage Credit Certificate (MCC) 61
Secret #23 Seek employer assistance, or seek an employer who gives assistance 62
Secret #24 Obtain a lower interest rate; pay points 63
Secret #25 Negotiate a buydown with the sellers 64
Secret #26 New homebuilders offer mortgage incentives 66
Secret #27 How to borrow jumbo amounts without paying jumbo rates 66
Secret #28 Your after-tax cost of borrowing may not be as low as you’ve been told 69
4 The Risks and Rewards of ARMs 73
Secret #29 ARMs do not necessarily present more risk than fixed-rate loans 73
Secret #30 For the short term, ARMs usually cost less 78
Secret #31 ARMs for the long run: How to lower costs and alleviate risk 80
Secret #32 You can (sort of) forecast interest rates 81
Secret #33 Low teaser rates: Bait or bargain? 84
Secret #34 Your start (teaser) rate isn’t your contract rate 86
Secret #35 There’s no one best index 88
Secret #36 Don’t ignore the margin 91
Secret #37 All caps aren’t created equal 92
Secret #38 That flashy convertible could prove a clunker 93
Secret #39 APRs tell you nothing about ARMs—and very little about fixed rates 94
5 Perfect Your Credit Profile 97
Secret #40 Emphasize all eight Cs of loan approval 98
Secret #41 Credit scores influence, but do not determine, the terms and costs of your loan 103
Secret #42 Your credit score doesn’t necessarily represent your credit strength 104
Secret #43 Discover your credit scores 105
Secret #44 Improve your credit scores 107
Secret #45 Garbage in, garbage out (GIGO) 109
Secret #46 Most credit repair firms (or deceptive tactics) can’t fix your credit or boost your credit scores 113
Secret #47 Bogus credit counselors can scam you, too 114
Secret #48 Credit counselors and debt management firms do not improve your credit record or boost your credit scores 115
Secret #49 Bankruptcy (Chapter 7) doesn’t necessarily ruin your credit 116
Secret #50 Your ex-spouse can ruin your credit (and other tales of double counting) 118
6 The Lowdown on Low Downs 121
Secret #51 You can buy with little or nothing down 121
Secret #52 No matter how much you earn, FHA may hold the key to your financing needs 122
Secret #53 Discover FHA’s best-kept Secret: The 203(k) program 126
Secret #54 Too many vets pass up VA loans 129
Secret #55 The USDA offers a prime choice for low- to moderate-income homebuyers 131
Secret #56 Community lending goes mainstream 131
Secret #57 Not-for-profit housing groups help moderate-income people own their own homes 134
Secret #58 Local governments assist with down payments 136
Secret #59 Even Fannie and Freddie accept little- or nothing-down loans 138
Secret #60 Cut the cost of PMI by learning where rates break 138
Secret #61 Before you obtain a PMI little- or nothing-down loan, understand the cost you’ll pay 139
Secret #62 Reduce the higher cost of low down payments with a second mortgage (piggyback loan) 141
Secret #63 Use pledged collateral to eliminate PMI 142
Secret #64 Search for sellers with low-equity assumables loans 144
Secret #65 Avoid PMI with a higher interest rate mortgage 144
7 Win Big Savings with Seller Financing, Foreclosures, or REOs 147
Secret #66 Sellers can nearly always beat the banks at their own game, but you must do more than ask 151
Secret #67 Ask the seller and lender to cooperate with a refiblend 153
Secret #68 Bridge the assumable gap with a seller second 154
Secret #69 Avoid the bang of a bursting balloon 155
Secret #70 Buy on the installment plan 156
Secret #71 Try it before you buy it 159
Secret #72 Buy and lease simultaneously 161
Secret #73 Beat high interest rates with wraparound financing 164
Secret #74 Don’t dillydally with due diligence 165
Secret #75 Negotiate a preforeclosure workout 168
Secret #76 Buy (carefully) at a foreclosure sale 171
Secret #77 Locate a foreclosure pro 171
Secret #78 HUD may hold the keys to your home or investment property 173
Secret #79 VA offers REO deals (with financing) to both veterans and nonveterans 175
Secret #80 Let Fannie or Freddie treat you to below-market financing 177
Secret #81 Buy and finance directly with a lender 179
8 Beware of Those Fine Print “Gotchas” 183
Secret #82 It’s a jungle out there 184
Secret #83 Tell your loan rep to take out the garbage 187
Secret #84 Don’t place blind faith in the good faith estimate 189
Secret #85 What’s the real cost of a no-cost mortgage? 191
Secret #86 Can you prepay without restriction or penalty? 193
Secret #87 An assumable loan may offer less than you’ve assumed 196
Secret #88 Appraised value doesn’t necessarily equal market value 198
Secret #89 Sometimes lenders signal appraisers to lowball their value estimates 200
Secret #90 Appraisals do not forecast the future 202
9 Achieve the Lowest Interest Rate Available 205
Secret #91 Refuse to yield to oversized yield-spread premiums (YSPs) 205
Secret #92 Red and yellow, black and white, do lenders treat them all alike? 207
Secret #93 Rate quotes: Fact or fiction? 208
Secret #94 What rate will you get at closing? 210
Secret #95 Achieve your best rate 213
Secret #96 Industry pros and government agencies need your help 215
Secret #97 How to (almost) vanquish tricks of the trade 220
10 Manage Your Property and Financing for Maximum Return 225
Secret #98 Treat your home and your financing as an investment 226
Secret #99 Monitor opportunities to refinance 233
Secret #100 Use refinancing to create other benefits 236
Secret #101 Refinance and invest the proceeds 238
Secret #102 Never buy biweekly baloney 243
Secret #103 Cancel your PMI—Get a refund from FHA 246
Secret #104 Should you negotiate out of escrow? 248
Secret #105 Just say no to home equity loans 250
Secret #106 Trouble, trouble, what to do? 254
Conclusion: You Can Live on the House 259
Index 265
