Common Mistakes

Only One Out Of Every Twenty New Home Buyers Will Ever Be Successful.

This may come as a complete shock to you.  If you take twenty first time home buyers that apply for a mortgage and follow them for 3-8 weeks, based on a national home buyer survey, only 1 will be approved with in 3 weeks with the most favorable rates and terms, 4 will overpay on their mortgage interest and closing costs, 3 will get the wrong type of mortgage, 2 will take more than 4 months to be approved and 10 will be declined.  I don't know about you, but, that's frightening to me.

Here is how you can be that one out of twenty

We pride ourselves on being the mortgage banker/broker who helps their clients become the successful ones.  By utilizing over one hundred lenders, both national and local, we are able to find the optimum loan program for all of our clients.  You undoubtedly have heard the adage "There's someone for everyone" well in the mortgage business there's a loan for everyone.  We try to find that loan as quickly as possible and with as little time delay as possible.

We have developed a system that takes the risk out of financing a home.  The key is that we have learned how to eliminate the costly mistakes that we see being made out there time after time.  We are going to share these with you in this report so you won't make them.

Even more importantly we have learned who the best service providers to work with are (i.e.  Builders, Escrow companies, Title Companies, Realtors, etc.).  You can save time by going with our referral to a preferred service provider in your area and we will be happy to give you some names of people who have been proven to be trust-worthy, hard working and efficient at what they do.

The absolute worst scenario to see is watching a would be home buyer work hard at finding their dream home and complete the negotiations with the seller only to see the deal blow apart at the eleventh hour when they find out that their mortgage has been declined!  "But the loan officer assured me it was no problem" they keep thinking.  Experiences like this are completely unnecessary.

How To Avoid The 10 Biggest Mistakes When Buying A Home and Getting A mortgage!

For over 95% of all American Families buying a home is the single largest financial investment they will ever make.   Spending $100,000 or more and leveraging yourself out for fifteen to forty years is a huge financial decision.  Because it can make or break your financial well-being, you need to know that you have made the right decision.

The truth is, two people can work at the same job, be paid the same salary, buy similar homes in the same neighborhood at around the same time and for one his home can become a financial windfall and for the other his home can be an anchor around his neck.  You wonder how this can be, but, the differences in the way each person performs their transaction can have very long lasting results.

When buying a home you need to make tons of decisions.  Most people make them without really knowing if they've done the right thing.  Have you ever been faced with so many choices?  About interest rates, down payments, the term of the loan, points, escrow's, etc.?

These are tough choices for anyone.   It doesn't matter whether you're a genius, these are hard choices to figure out.  When it comes to making these choices, you either make them on your own, or you get help.

Help from real estate agents, relatives, friends, or parents.  They all will try to help, but they usually don't have the right tools or knowledge to give you the right answers.  When you're dealing with numbers this large you need to make sure you're getting the right information and are making the right decisions.

Most of us will drive across town to save fifty dollars on our groceries, but most people will spend less than two minutes selecting a financing plan for their home.  The truth is you could never spend enough money on groceries to make up for a small mistake on your home financing.  We offer a no cost, no pressure, absolutely painless consultation.  You can have a chance to have all of your questions answered and see all of your options spelled out in plain English for you.  This is the only way you will be able to make the best decision for your needs.

Spread out over a number of years, the wrong decision can literally cost you enough to buy another home.  Because the decisions you're about to make will be spread out over thirty years and several thousand of dollars, even the smallest mistake now can throw you so far off course it can literally change the lifestyle you will be able to live.  We're going to spend the next few minutes talking about the ten biggest mistakes most homeowners make.  As we discuss these problems, try to see if you've made any of them yourself.  Please be honest with yourself.  If you have made any one of these mistakes, you could be dangerously off course!  My goal is to make sure you never make these mistakes.

Studies have shown that the heart rate of the average mortgage loan applicant is actually faster than the heart rate of a NASA astronaut just before take off.  I have heard that in polls people would actually rather go to the dentist than to go to their banker for a home loan.   Personally, I can't stand going to the dentist, so that really makes me feel awful about how people must feel.  Here's a story to illustrate the how things should not be done.

Jim and Donna were totally confused about their situation.  Here they were, sitting in this new banker's office, trying to decide how to finance their new home.  At first, they were as excited as they had ever been. Finally, after all these years, they had gotten enough courage to take the plunge and buy their dream home.

Their current home was nice, but it was just not in the right neighborhood.  They had always longed to upgrade to a street a few blocks away.  It always seemed to be way too expensive though.  Finally, they had made up their minds that they were going to have the home they had always desired.

They had a lot of equity in their home and a real estate agent they knew told them she had a buyer looking for a house just like theirs. "Would you be interested in selling?" She asked.  They had just seen their dream home up for sale so Jim and Donna said  "you bet, we're interested."

They wrote an offer and got a good deal on the house they wanted, sold their home and were ready to get the loan set up.   First, they went to their own bank.  They had been good customers there for maybe twenty years. When they went in to see the banker, he said, "you're in luck."  "We're having a special this month."  "I don't know all the details, but I'll be giving Kathy, our loan processor, your phone number."   "She'll be calling you this afternoon."  Later that day, sure enough, Kathy called with the details of the special.  She asked questions like:

A. Do you want and adjustable or fixed rate?

B. How much will you be putting down?

C. Do you want a thirty year, fifteen year or forty year loan?

D. Do you want a higher rate with less points, or a lower rate with higher points?

Jim & Donna just guessed at the answers and Kathy said that she would be getting back to them with their approval very shortly.  About two weeks later, Kathy gave them a call.  "The investor says you need to give us a more current pay stub." "who's the investor?"   Donna asked.   "It's either Fannie or Freddie, anyway we need this information as soon as possible." Said Kathy.

They sent in their most recent pay stubs, and assumed everything was OK.  About a week and a half later, they got a short, one page letter saying how sorry the bank was, but that they were declined.   Jim called his buddy at the bank and was told, "Sorry Jim, There's nothing I can do."

Disappointed is not a strong enough word to describe their feelings.  But, they had to do something.  So, they called some bank they saw advertised in the paper and were now asked all the same questions again, confusing decisions all over again.

They really didn't know what to do.   They asked for help.  First, they went to the best source of information they could think of, Jim's brother-in-law, Bob.  Bob knows everything about everything.   He told them to go with a 30 year fixed loan, putting 30% down, paying 3.5 points.

Jim and Donna weren't so sure, so they went to the real estate agent.  She told them to go for 15 years, with and adjustable and no points.  Then, they're sitting in the bank and the banker says they should go with a 3 year adjustable, with one point, on a 30 year schedule.  Now Jim and Donna haven't a clue as to what to do.

Donna leaned over to Jim, and said in a whisper, "Honey, I think it's anyone's ball game now."  "Do what you want to do."  Jim replied " I'm worried."  "I guess we should do whatever Bob said, after all, he has done this before."  So they did what Bob said.  After a couple of years later Jim got promoted and they were very sorry the listened to Bob.

They found out they had made all the wrong decisions.  They had wasted money on the points,  put too much down and gotten the wrong kind of loan.  The new job, created a situation that showed them that they had wasted thousands of dollars by buying down the interest rate, when it turns out they weren't going to be there long enough to get their investment back.  Plus, they had the same problem deciding what to do on the house in the new city.  This time, they didn't listen to Bob.  No.  This time they listened to Donna's Brother-in-law, Frank.  Sound familiar.

Let's spend a few minutes discussing these mistakes Jim and Donna made.

Taking a 15 year versus a 30 year loan.

This question is probably one of the most common ones asked.  Over and over again, people choose the length of their loan for all the wrong reasons.  They choose the length of the mortgage based on the monthly payment, or being able to qualify for the mortgage, or whatever. Sometimes, it's because of an emotional decision.  "I want to pay this baby off!"   "I want it fee and clear, as soon as possible!" (Ever heard that one before?)  What's any of that got to do with the real question, which is: "Which type of loan will be best for me?"

You would be amazed at how much interest you pay on your mortgage over the life of the loan.  For example, over a 30 year loan of $100,000 at 9%, you will pay over $189,000 in interest! That's unbelievable, but true. Now, if you were to set u a prepayment fund, and add only $67 a month to it, which would be forwarded directly to your mortgage company, you would save over $61,000 in interest over the life of your loan and pay off your house in just under 22 years!

If you kept paying the normal $804.00 per month on that loan, you would owe over $55,000 at the end of year 22. (You would still have 8 years left to go.) By setting up this prepayment program, you would owe ZERO at the end of year 22!  What a difference!  Do you think your bank wants you to know about any of this.

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