The 13 Secrets Lenders don't Want You to Know

Special Bonus: 4 Secrets of getting the Best House for Your Money.

Get "Pre-Approved" - Not "Pre-Qualified!"
Do you want to get the best property you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one element in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller. The way to make the strongest offer today is to get "pre-approved". This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. It's VERY POWERFUL and a weapon we recommend all my clients have in their negotiating arsenal. Save money on your mortgage by receiving a free, no obligation mortgage analysis from www.BlueFinancial.net
Sell Your Property First, Then Buy the House
If you have a house to sell, sell it before selecting a house to buy! Contingency sales aren't nearly as strong as one that comes in with a ready, willing and able buyer. Consider this scenario: You've found the perfect house - now you have to go make an offer to the seller. You want the seller to reduce the price and wait until you sell your house. The seller figures that this is a risky deal, since he might pass up a buyer who DOESN'T have to sell a house while he's waiting for you. So he says OK, he'll do the contingency but it has to be a full price offer! You have now paid more for the house than you could have because of the contingency, and you have to sell your existing house in a hurry! Otherwise you lose the house! So to sell quickly you might take an offer that's lower than if you had more time. The bottom line is that buying before selling might cost you THOUSANDS of dollars.
Don't Be Pushed Into Any House
Your agents should show you everything available that meets your requirements. Don't make a decision on a house until you feel that you've seen enough to pick the best one. A decade ago, homes were selling quickly, usually a few days after listing. In that kind of market, agents advised their clients to make an offer ON THE SPOT if they liked the house. That was good advice at the time. Today there isn't always this urgency, unless a home is drastically under priced, and you'll know if it is.
Stop Calling Ads!
Please note - ads are sometimes created to make the phone ring! Many of the homes have some drawback that's not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What's not mentioned in the ad is usually more important than what is.
For this reason, I want you to be very careful when reading ads. Remember that the person writing the ad is representing the seller and not you! The most important thing you can do is having someone on your side looking out for your best interests. Your own agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about. So whether you decide to work with me or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer's broker.

Additional Special Bonus: The Mortgage Game's 4 big rip-offs!

RIP-OFF #1: One of the biggest rip-offs mortgage companies don't want you to know about is the "Glossing over of the prepayment penalty". Many Mortgage Companies "Gloss over" the prepayment penalty during the loan application and closing, hoping borrowers don't discover its existence
SOLUTION: Ask up-front if there is a prepayment penalty on the loan, and if so, how long it lasts (anywhere from 1-5 years). Then when signing, ask, "Show me where it says there is no prepayment penalty," or "Show me the terms of the prepayment penalty."
Conforming, low interest rate loans do not have prepayment penalties. Creative, non-conforming loans do have prepayment penalties most of the time. As long as the duration of the penalty matches with the time you plan to keep the loan, then there is no problem. Seeing it in print before you sign will prevent an unwanted surprise.
RIP-OFF #2: Some Companies try and sell the overpriced biweekly mortgage payment plans. The plan is sound, the rip-off is the cost - typically $400 for a program you can do yourself for free.
SOLUTION: Pay an extra payment during the year on your own. It accomplishes the same thing!
RIP-OFF #3: We talked about this earlier, but we must say it again.Paying too much in fees is a rip-off. This could be in paying too much for loan origination, loan discount, broker fee, or various "junk fees." Comparing the APR (annual percentage rate) is supposed to give consumers a fair comparison, but it does not. Why? Because all companies do not calculate the APR the same way (even though they are supposed to!)
SOLUTION: Use the Mortgage Shopping worksheet above!
RIP-OFF #4: Some Mortgage Companies attempt to take away your right to shop around. Sometimes loan officers will tell people not to talk to other mortgage companies, because too many inquiries on their credit report will lower their score and prevent them from getting a good loan. Don't fall for this gimmick!
SOLUTION: Know all three of your credit scored from the mortgage Company who ran your credit report so you can shop around. Simply tell the New Lenders you are shopping what your three scores are. If they demand on running another credit report, take your business somewhere else Do not get ripped off on your mortgage! Save money on your mortgage by receiving a free, no obligation mortgage analysis from www.BlueFinancial.net

2006 © "Secrets Lenders Don't Want You To Know" by Andy Jacob

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