Mortgage Myths: 77 Secrets That Will Save You Thousands on Home Financing

by Ralph R. Roberts; Chip Cummings

• ISBN13: 9780470228647
• ISBN10: 0470228644
• Format: eBook
• Copyright: 2008-03-01
• Publisher: Wiley

Summary

In Mortgage Myths, Realtor Ralph Roberts and mortgage consultant Chip Cummings take aim at the 77 mortgage myths that prevent so many would-be homeowners and real estate investors from pursuing their dreams of homeownership. You'll learn the difference between good and bad debt, how to make mortgage approval easier and simpler, and how to use other people's money to leverage your investments. This is the ultimate guide to getting the great deal you deserve.

Table of Contents

Foreword

Introduction

Where Do I Start?

Renting is Better than Buying

I Can't Qualify for a Loan

Only U.S. Citizens Can Qualify for a Mortgage

I Should Look at Some Houses First

I Need a Down Payment - But I Don't Have the Funds

I Should Make the Biggest Down Payment I Can

Mortgage Companies and Loan Officers are Licensed and Regulated

Big Lenders and Major Banks are Always Better

My Best Bet is to Use a Friend

I'll Find a Better Deal on the Internet

I Can Get a Higher Return by Investing in Stocks

Playing "The Mortgage Game"

My Main Goal is to Snag the Lowest Interest Rate

The Federal Reserve Controls Interest Rates

Stay with "Fixed Rates" - ARM's Are Just Too Risky

A Shorter Term Always Beats a 30- or 40-Year Term

My Credit History Needs to be Perfect

My "Credit Score" Determines My Loan's Approval

Be Conservative - Don't Stretch Yourself

I'm Divorced or Declared Bankruptcy... So I'll Never Qualify

Special Financing Programs Aren't Available to Me

I Should Avoid "Mortgage Insurance"

The "Good Faith Estimate" Guarantees My Closing Costs

I Have to Use the Realtor/Builder's Loan Officer

Selecting the "Right" Home

I'll Save Big Money Buying FSBO

I Have to Shop Within a Certain Price Range

Everything Is Included in the Sales Price

The Appraiser Will Specify the Value and Any Required Repairs

The Real Estate Agent Will Protect Us

Condos Are Bad Investments... and Hard to Finance

Seller Disclosures are Complete and Accurate

I Should Buy the Biggest House at a Bargain Price

I Should Always Use an Attorney

I Don't Need an Inspection - It Looks Great to Me!

I've Seen Enough.. I've Found the Home I Love!

It's Okay to Buy - This Area is Booming

All Sales Agreements and EMD Requirements Are Standard

I Can't Withdraw My Offer û It's Too Late

Beware of Foreclosures - They're a Headache

I Make Money When I Sell û Not When I Buy

My Tenants Will Finance My Investment Property

The Mortgage Process

The Loan Process Takes a Long Time

All Applications and Disclosure Forms Are Standard

WeÆre Approved: Our Worries Are Over!

My Interest Rate Is Locked In AND Guaranteed

A Pre-approval is a Pre-Approval

I Have to Let My Lender Escrow Taxes and Insurance

I'm Self-Employed - Getting Approved Will Be Tough

The House Needs Repairs - We'll Do Them Later

Personal 'Profiling" Is Part of the Approval Process

It's "Closing" Time

Someone Else Decides the Closing Date and Location

Why Do I Need "Title Insurance"... I Can't Even Select the Provider

It's Cheaper to Close at the End of the Month

I Can't Review Documents in Advance

The Seller's Home Warranty Protects Us

The House Will Be in "Move-In" Condition

It's All Triple-Checked and Ready to Go!

I Need Homeowners Insurance to Cover the Entire Purchase Price

I Need Credit Life Insurance to Protect Myself

My House Payment Will Never Change

The Refinance Game

Never Refinance Until the Rate is 2% Lower

I Should Never Refinance Into a Higher Interest Rate

I'm Not Allowed to Pay Extra - There's a Pre-Payment Penalty

Reverse Mortgages Are a Bad Idea

My Terms May Change if the Loan is Sold

Refinancing is Easy û I Already Qualify.

Refinancing: Better Than Home Equity or Construction Loans

Low Inflation Means Low Appreciation

I Have to Live There at Least 3 Years to Break Even

Refinancing is a Cheap Way to Get Cash

My Escrows Are Already Set Up

Short of Cash? Creative Financing Solutions

I Can't Use a Gift for a Down Payment

A Bi-Weekly Mortgage Simply Changes My Payment Schedule

Seller Financing is Risky and Expensive

Government Loans Are Only for Low-Income Borrowers

No Bank Will Finance Us

A "Lease Option" Plan is Always a Bad Idea

I Can't Make My Payments... So I'll Lose My Home

Appendix

Forms

Required Application Disclosures

Mortgage Application - Form 1003

Sample "Good Faith Estimate"

Sample "Truth in Lending" Disclosure

Sample Appraisal

Sample HUD-1 Closing Statement

Homebuyer Checklist

Home Financing Checklist

Refinance Checklist

Personal Qualification Form

Mortgage Payment Calculator

National/State Associations and Regulatory Agencies

Homebuyer Education Classes

Other Website Resources

Terms You Need To Know

Index

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