Authors: Gary W. Eldred
ISBN-13: 9780470152867, ISBN-10: 0470152869
Format: Paperback
Publisher: Wiley, John & Sons, Incorporated
Date Published: October 2007
Edition: REV
Gary W. Eldred, PhD, has invested successfully in real estate for more than twenty years and has served on the graduate business faculty at Stanford University and the University of Virginia. He has authored many other real estate titles, including Make Money with Affordable Apartment Buildings and Commercial Properties, Second Edition; Trump University Real Estate 101; and Investing in Real Estate, Fifth Edition, all from Wiley.
Book Synopsis
The only guidebook that shows you how to finance any propertywith 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 LearnBut 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 (and sometimes hundreds) of thousands of dollars to your long-term net worth. With these 106 secrets, you'll build the confidence and the knowledge to:
- Increase your borrowing power
- Obtain the lowest interest rate
- Understand the true pros and cons of ARMs
- Cut (or eliminate) the cost of mortgage insurance
- Save big with seller financing, assumptions, foreclosures, and REOs
- Strengthen your credit profile and credit score
- Avoid getting taken... by the fine print and garbage fees
- Steer clear of scams and unprincipled loan reps and lenders
- Accumulate wealth through homeownership and investment properties
Simple, concise, and comprehensive, this book reveals everything property buyers need to knowespecially the 106 financing secrets lenders too often omit.
Table of Contents
Preface to the Second Edition xi
Introduction: Use OPM to Achieve All That You Really Want xiii
Affordability Depends on You-Not a Lender 1
Affordability depends on you 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
Separate the emotional from the financial 7
Align self-talk with your priorities 9
Envision the propert(ies) you would like to own 5, 10, or 15 years from now 15
Increase Your Borrowing Power 17
10,000 lenders set their own standards 17
You can make your qualifying ratios look better 20
Lift your qualifying income 23
Reduce your debt 27
Use compensating factors to justify higher qualifying ratios 30
Never fib to a lender 32
Can't qualify? Enlist a cosigner, co-borrower, or co-owner 34
Let tenants pay your mortgage 36
Don't change your loan status 42
Slash Your Cost of Interest 43
Many borrowers who want a fixed-rate loan should choose 15 years, not 30 or 40 44
Lower interest rates mean big savings 48
Lower ratesmagnify borrowing power 49
ARMs sometimes offer greater borrowing power, lower costs, with risk you can manage 51
State and local housing finance agencies offer lower-interest mortgage loans 53
Assume a low-interest-rate mortgage 54
"Assume" a nonassumable mortgage 57
Save {dollar}1,000s with a Mortgage Credit Certificate (MCC) 61
Seek employer assistance, or seek an employer who gives assistance 62
Obtain a lower interest rate; pay points 63
Negotiate a buydown with the sellers 64
New homebuilders offer mortgage incentives 66
How to borrow jumbo amounts without paying jumbo rates 66
Your after-tax cost of borrowing may not be as low as you've been told 69
The Risks and Rewards of ARMs 73
ARMs do not necessarily present more risk than fixed-rate loans 73
For the short term, ARMs usually cost less 78
ARMs for the long run: How to lower costs and alleviate risk 80
You can (sort of) forecast interest rates 81
Low teaser rates: Bait or bargain? 84
Your start (teaser) rate isn't your contract rate 86
There's no one best index 88
Don't ignore the margin 91
All caps aren't created equal 92
That flashy convertible could prove a clunker 93
APRs tell you nothing about ARMs-and very little about fixed rates 94
Perfect Your Credit Profile 97
Emphasize all eight Cs of loan approval. 98
Credit scores influence, but do not determine, the terms and costs of your loan 103
Your credit score doesn't necessarily represent your credit strength 104
Discover your credit scores 105
Improve your credit scores 107
Garbage in, garbage out (GIGO) 109
Most credit repair firms (or deceptive tactics) can't fix your credit or boost your credit scores 113
Bogus credit counselors can scam you, too 114
Credit counselors and debt management firms do not improve your credit record or boost your credit scores 115
Bankruptcy (Chapter 7) doesn't necessarily ruin your credit 116
Your ex-spouse can ruin your credit (and other tales of double counting) 118
The Lowdown on Low Downs 121
You can buy with little or nothing down 121
No matter how much you earn, FHA may hold the key to your financing needs 122
Discover FHA's best-kept secret: The 203(k) program 126
Too many vets pass up VA loans 129
The USDA offers a prime choice for low- to moderate-income homebuyers 131
Community lending goes mainstream 131
Not-for-profit housing groups help moderate-income people own their own homes 134
Local governments assist with down payments 136
Even Fannie and Freddie accept little- or nothing-down loans 138
Cut the cost of PMI by learning where rates break 138
Before you obtain a PMI little- or nothing-down loan, understand the cost you'll pay 139
Reduce the higher cost of low down payments with a second mortgage (piggyback loan) 141
Use pledged collateral to eliminate PMI 142
Search for sellers with low-equity assumables loans 144
Avoid PMI with a higher interest rate mortgage 144
Win Big Savings with Seller Financing, Foreclosures, or REOs 147
Sellers can nearly always beat the banks at their own game, but you must do more than ask 151
Ask the seller and lender to cooperate with a refi blend 153
Bridge the assumable gap with a seller second 154
Avoid the bang of a bursting balloon 155
Buy on the installment plan 156
Try it before you buy it 159
Buy and lease simultaneously 161
Beat high interest rates with wraparound financing 164
Don't dillydally with due diligence 165
Negotiate a preforeclosure workout 168
Buy (carefully) at a foreclosure sale 171
Locate a foreclosure pro 171
HUD may hold the keys to your home or investment property 173
VA offers REO deals (with financing) to both veterans and nonveterans 175
Let Fannie or Freddie treat you to below-market financing 177
Buy and finance directly with a lender 179
Beware of Those Fine Print "Gotchas" 183
It's a jungle out there 184
Tell your loan rep to take out the garbage 187
Don't place blind faith in the good faith estimate 189
What's the real cost of a no-cost mortgage? 191
Con you prepay without restriction or penalty? 193
An assumable loan may offer less than you've assumed 196
Appraised value doesn't necessarily equal market value 198
Sometimes lenders signal appraisers to lowball their value estimates 200
Appraisals do not forecast the future 202
Achieve the Lowest Interest Rate Available 205
Refuse to yield to oversized yield-spread premiums (YSPs) 205
Red and yellow, black and white, do lenders treat them all alike? 207
Rate quotes: Fact or fiction? 208
what rate will you get at closing? 210
Achieve your best rate 213
Industry pros and government agencies need your help 215
How to (almost) vanquish tricks of the trade 220
Manage Your Property and Financing for Maximum Return 225
Treat your home and your financing as an investment 226
Monitor opportunities to refinance 233
Use refinancing to create other benefits 236
Refinance and invest the proceeds 238
Never buy biweekly baloney 243
Cancel your PMI-Get a refund from FHA 246
Should you negotiate out of escrow? 248
Just say no to home equity loans 250
Trouble, trouble, what to do? 254
Conclusion: You Con Live on the House 259
Index 265
Subjects