Profitable answers to loan questions
When I first saw “Mortgages 101” on the bookstore shelf, I wasn’t sure whether it was a textbook for a college mortgage course or a basic how-to-get-a-mortgage book. It is neither. Instead, author David Reed provides answers to 250 mortgage questions (they aren’t numbered, and I didn’t keep count) that explain how the multibillion-dollar home-mortgage industry works.
The author, an experienced mortgage broker, shares his insider home-loan secrets, offering advice on how to overcome frequent mortgage problems.
The book’s format, however, may not be very appealing to home buyers. It is hard slogging through page after page of detailed information in the first few chapters. A chapter or two a day is about all most folks may be able to handle. But halfway through, the book becomes downright interesting and, if I dare use this word, “exciting.”
Those who will benefit most from this book are 1) real estate sales agents who need to know this important insider information to pass along to their buyers and sellers and 2) mortgage brokers and home loan agents who don’t understand how the home loan industry really works.
It offers useful information for home buyers and homeowners seeking refinancing, home equity and construction loans. The chapter on dealing with damaged or impaired credit is detailed, thorough and valuable. If you want information on home-equity (second) mortgages and lines of credit, you will find a little, but not enough. And senior citizens looking for information about reverse mortgages won’t find much either.
The best chapters explain how credit reports and FICO (Fair Isaac Corp.) credit scores affect mortgage approvals. Reed discusses what affects FICO scores and how to raise them to get approved for a lower mortgage interest rate.
The author also emphasizes the pitfalls of being a loan co-signer or being involved in a divorce in which your ex-spouse is supposed to pay the mortgage but fails to do so. Reed warns there is no easy solution when the primary mortgage obligor fails to pay on time but the co-signer or ex-spouse receives an adversely affected credit report.
Highly commendable are the concluding chapters with advice about finding the best lender and loan officer. Reed reveals how some personnel can profit from mortgage market fluctuations and the borrower may never know he or she didn’t get the best terms.
