Monday, October 24, 2005

Bad Deals on Mortgages

There is a lot of talk about the boom in Real Estate. I think there is a bigger “boom” and I was proved right in a Los Angeles Times article.

Real Estate lending is at an all time high! A serious problem has arisen that is very deserving of address. Borrowers with good and above average credit are getting stuck with loans usually reserved for sub-prime borrowers.

Freddie Mac (That’s my friend Freddie) said 20% of borrowers who are getting sub-prime loans could get a conventional prime loans, which are usually less expensive.

Its true that lenders are not required to tell borrowers if they can get a better deal elsewhere. So, when applying for a loan, shop first and be vigilant. Talk to multiple lenders and see what they have to say. Don’t let them run your credit or start an application though. Each time a lender runs your credit it will lower your credit score and might put you into the sub-prime category when you shouldn’t be.

Choose a trustworthy lender who takes the time to explain all costs associated with a loan. I like smaller companies versus the giant mortgage mills. I think you’re more likely to get personalized service from someone who really is concerned about your long term loyalty by avoiding big companies that mass-market and draw in customers using catchy slogans.

When considering a loan, even a sub-prime one – remember there are right & wrong ways of using these various loan products.

You should always consult real estate professionals to determine your overall strategy for real estate ownership and which finance methods will help you reach your goals.

And for goodness sake, don’t sign anything you don’t understand. Get a satisfactory explanation before signing.

For tips on getting a better deal on a home loan take a peek at our WikiHow article on getting a better deal on a home loan.

When you’re ready to shop for a loan, e-mail for our Shopping List for Loans. This package contains loads of information that will give you the edge in your negotiation with lenders. Also, you’ll be empowered with a series of questions you should ask every lender you talk to. With this package, even the slimiest mortgage broker will think twice before trying to take advantage of you. Even if they do, you’ll see the warning signs and will know when to walk away.

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