Mortgage Ripoffs and Money Savers An Industry Insider Explains How to Save Thousands on Your Mortgage or Re-Finance

by Warren, Carolyn

• ISBN13: 9780470097830
• ISBN10: 0470097833
• Edition: 1st
• Format: Paperback
• Copyright: 2007-05-04
• Publisher: Wiley

Summary

Mortgage Rip-offs and Money Savers reveals how the mortgage industry cheats borrowers out of billions in extra costs every year. Mortgage industry insider Carolyn Warren taps her decade of experience with lenders to expose the tricks, lies, and dirty little secrets they don't want you to know. With her expert guidance, borrowers will save tens of thousands when they avoid the traps so many consumers fall into. Having this inside information is the only way borrowers can truly get the best possible deal. This book presents that knowledge in an interesting and easy format that anyone can understand. Readers won't be victims of the mortgage industry with this invaluable resource in hand. Instead, they'll get the best possible rates, avoid bogus fees, and get the great deal they deserve.

Author Biography

Carolyn Warren was a mortgage industry insider for ten years, and worked in retail and wholesale lending for some of the nation's largest lenders, including Full Spectrum Lending/Countrywide Home Loans, Long Beach Mortgage/Ameriquest, First Franklin, and Green Tree Financial/Conseco.

Table of Contents

Acknowledgments

Introduction

Eight-Step Guide to Getting the Best Rate and Protecting Yourself from Most Common Scams

Step 1: Boost Your Credit Rating and Prequalify

What Credit Score Do You Need to Buy a Home?Additional Notes about How Lenders Rate Credit

What to Do if You Have Credit Challenges

People with Low Scores Get Ripped Off More Often

Find Out How Much You Qualify For

The Three-Step Preapproval Process

How Do Lenders Decide How Much Money to Lend You?Which Payments Count for Debt Ratio?Pick Your Own Budget

Coming Up

Step 2: Create a Short List of Three Honest Mortgage Lenders

Tricks to Foil Your Shopping Efforts

Selling the Sizzle

Special Deals and Secret Loans

The Loan They Don't Want You to Know About

The Sticky Trick

Creating Your Short List

Write Down Two Mortgage Companies and One Bank

Make One a Referral

Get a Specific Name

Using an Internet Lender

Big National Lenders versus Local Lenders

Listen to Your Instincts

Coming Up

Step 3: Choose the Right Type of Loan for Your Situation

Types of Loans

30-Year Fixed Rate

15-Year Fixed Rate

40-Year or 45-Year Fixed Rate

Adjustable Rate Mortgage (ARM)

Balloon Loan

2/28 and 3/27 "Fixed Rate" Adjustable Loans

Interest-Only Loans

Risky Loans

Loans That Should Be Illegal

Prepayment Penalties: Good and Bad

What Is a Prepayment Penalty and How Does It Work?Hard or Soft Prepayment Penalty?Good Prepayment Penalties

Biweekly Mortgage Savings: Bargain or Rip-Off ?How Does It Really Work?Coming Up

Step 4: Request Three Good Faith Estimates and Compare the Costs

Bad Ideas

Shopping for the Best Interest Rate Is a Bad Idea

Comparing APR Is a Bad Idea

Comparing Ads Is a Bad Idea

How Should You Shop for a Mortgage?How to Ask for Your Good Faith Estimates

What if You Don't Know Your Credit Score?How to Compare Good Faith Estimates

Getting a Guarantee

Finding an Honest Pro

The Key to a Good Borrowing Experience

Coming Up

Step 5: Uncover the Best-Kept Secret of the Mortgage Industry

Stop Paying Too Much!Conversations They Don't Want You to Hear

How Do Commissions Work?How Do Loan Officers' Commissions Work?Who's Getting Par Rate?There Should Be a Law

Deciding between Broker and Banker

Brokers Acting like Bankers

Why Does the Law Treat Brokers and Bankers Dif ferently?What's a Fair Price to Pay for Your Loan?More on YSPs

What Should You Do if YSP Is a Big Secret?What if the YPS on Your Loan Goes Up?Coming Up

Step 6: Negotiate Lower Fees and Rates

Categorizing Fees

Junk Fees: The Dirty Dozen

Questionable Fees

Legitimate Fees and Third-Party Costs

Coming Up

Step 7: Decide Whether It Makes Sense to Pay Points, and Lock In Your Rate-Carefully

The Truth about Par Rate and Discount Points

Are You Protected with a Government Loan?When Does It Make Sense to Pay a Loan Discount?When It Might Make Sense to Buy Down Your Rate

Lock In Your Rate

What Is a Rate Lock and How Does It Work?When Can You Lock In Your Rate?What if Your Loan Doesn't Close on Time?What if Rates Go Down after You Lock?Do Mortgage Brokers Have an Advantage over Bankers?Beware Rate Gambling!Losing on a Rate Lock Gamble

Insider's Guide to Protecting Yourself from Rate Lock Scams

Coming Up

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