106 Mortgage Secrets All Borrowers Must Learn – But Lenders Don′t Tell

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