Ask the Professor and Mistakes to Avoid about Mortgage

Ask the Professor

Hereunder, there are all kinds of problem of which can expressed and trouble-shooting which in the generating of the problem about MORTGAGE.

•Buying a House
•Selecting a Loan Provider
•Shopping for a Mortgage
•Locking the Price
•Qualifying for a Mortgage
•Selecting the Mortgage Type
•Selecting the Mortgage Features
•Takinga Second Mortgage
•Refinancing
•Managing the Mortgage

Buying a House
•How Much House Can You Afford?
•How Can I Buy Before I Sell?
•Are Manufactured Houses a Good Deal?
•Is FHA Responsible For the Leaky Roof?
•Should I Assume the Seller's Mortgage?
•How Much House Should You Buy?
•Should Unmarried Partners Buy a House?
•Questions About Homeowners Insurance
•Can You Buy a House, Then "Reverse Mortgage"?
•Are Lease-to-Own Deals Win-Win?
•Should I Consolidate Debt in a New Purchase Mortgage?

Selecting a Loan Provider
•What is the Difference between Lenders, Brokers, and Loan Officers?
•Is this Lender Reputable?
•Referrals: Who Can You Trust?
•Can an Expert Assess Your Deal?
•What do Mortgage Brokers Do?
•How Do I Find an Ethical Mortgage Broker?
•What is an Upfront Mortgage Broker?
•Do You Save Commission by Becoming a Broker?
•Should You Borrow From the Builder's Lender?
•What is a Sub-Prime Lender?

Shopping for a Mortgage
•Can I Rely on Price Quotes?
•Can I Avoid Lapsed Prices
•What Market Niche Are You In?
•Is It Safe to Ignore Lender Payments to My Broker?
•What is an 'Overage'?
•How Do I Shop Settlement Costs?
•What Mistakes Do Mortgage Shoppers Make?
•How Do You Avoid Predators?
•Does the APR Help?
•Does Truth In Lending Help?
•APR Below the Interest Rate on an ARM?
•How Do I Avoid Legal Thievery at the Closing Table?
• Are Libor ARMs a Good Deal?

Locking the Price
•Why is Locking Unique to Mortgages?
•Is it Wise to Float?
•When is the Right Time to Lock?
•Should Mortgage Brokers Play the Market?
•What Are Lock Failures, and Why do They Happen?
•What's Covered By a Lock?

Qualifying for a Mortgage
•Qualifying for a Mortgage?
•What is the Difference Between Qualifications and Approval?
•Can You Separate Income and Credit?
•Does Paying Delinquencies Improve Credit
•Do Inquiries Hurt Your Credit?
•Should I Co-Sign to Help?
•How Can I Take Advantage of an Equity Gift?
•Are Seller Contributions Kosher?
•Do I Really Need an ARM to Qualify?
•What Are Documentation Requirements?
•Should You Allow a Friend to Qualify With Your Account?

Selecting the Mortgage Type
•How Do ARMs Work?
•When Are ARMs a Good Buy?
•Is This ARM a No-Brainer?
•Is a Flexible ARM For You?
•Is a Balloon Loan Better Than an ARM?
•Are Ballons Safe if the Bubble Bursts?
•Why the New Interest in Interest-Only?
•Are You Being Hoodwinked by Interest Only?
•What is Simple Interest Mortgage?
•What is the Difference Between Biweekly and a Bimonthly?
•Can I Do My Own Biweekly?
•Who Should Take an FHA?
•Are VA Loans a Good Deal?
•Do Interest-Only Loans Amortize Faster?
•What Is a Graduated Payment Mortgage?
•Do 40-Year Loans Make Sense?

Selecting the Mortgage Features
•What is the Mortgage Interest Rate?
•What Determines the Interest Rate?
•What is the Down Payment?
•30 Years or 15?
•Why Pay Points?
•Can Points Be Financed?
•What is the Real Cost of Mortgage Insurance?
•What are Prepayment Penalties?
•Do You Know For Sure if Your Loan Has a Prepayment Penalty?
•What is Title Insurance and Why Do I Need it?
•How Can I Avoid Escrows?
•Should I Use Money in My 401K as a Down Payment?
•No-Cost Mortgages
•Do I Really Need All These Title Policies?

Taking a Second Mortgage
•Are Two Mortgages Less Costly Than One?
•Is a Second Mortgage Different From a Home Equity Loan?
•What Is a HELOC?
•How Do You Shop For a HELOC?
•Do You Know Your Lender's Policy on Subordination?
•Should I Consolidate Debts With a Second Mortgage?
•Raising Cash: Is a Second Mortgage Cheaper than a Cash-Out Refinance?
•Is This a Good Time For an HEL?

Refinancing
•When Does Refinancing Really Pay?
•Is a Refinancing a Good Deal if it Saves Money?
•What Goes Into the Refinance Decision?
•Does "No-Cost" Refinance Make Sense?
•Should I Follow the APR on a Cash-Out Refi?
•Does Refinancing at a Higher Rate Ever Make Sense?
•Refinance With Current Lender?
•Why Won't My Refinance Go Through?
•Should I Consolidate, and How?
•Does a Prior Refinance Affect This One?
•Why is This Refinance 'Cash-Out'?
•Should You Rescind Your Refinance?

Managing the Mortgage
•How Do Amortized Mortgages Work?
•How Do I Cancel PMI?
•Have I Been Credited For My Prepayment?
•When Is Early Payoff a Good Investment?
•Is There Recourse Against Bad Servicing?
•Should I Borrow For the Tax Deduction?
•Should I Consolidate, and How?
•What Happens When You Skip a Payment?
•What Should You Do When You Can't Pay?
•Are Reverse Mortgages in the Mainstream?
•Where Do I Find a Reverse Mortgage?
•Do I Need Good Credit for a Reverse Mortgage?
•Do I have any recourse against a bad faith estimate?
•Is This a Good Time for an HEL?

Mistakes to Avoid

•Buying A House
•Shopping for a Mortgage
•Qualifying for a Mortgage
•Selecting the Mortgage
•Taking a Second Mortgage
•Refinancing
•Managing the Mortgage

Buying A House
•Look for a house without knowing how much you can afford to pay.
•Assume that the FHA will protect you from buying a house with major defects.
•Purchase a house with someone not your spouse without a written agreement.
•Assume that you must close on the sale of your existing house before you can close on your new house.
•Buy a manufactured house through a dealer with a package that includes house, installation, site and financing.
•Allow the purchaser of your existing house to assume responsibility for your existing mortgage without a release of liability.
•Decide in advance that you will consolidate debts in a new purchase mortgage, then only price mortgages that allow it.

Shopping for a Mortgage
•Select the loan provider offering the best price over the telephone or in the newspaper.
•Assume that rate quotes from loan providers are always given in good faith.
•Solicit price information without giving the loan provider all the information about your loan that may affect the price.
•Accept lender referrals from other borrowers uncritically.
•Assume that you can shop lender A today and lender B tomorrow.
•Assume that a payment made by the lender to the mortgage broker is not a cost to the borrower.
•Select a lender without knowing any of the lender charges except points, then try to negotiate other charges afterwards.
•Use the APR to assess the cost of different mortgages, even though you expect to be in your house only a few years.
•Allow the price to float on a home purchase transaction.
•Accept a mortgage broker’s verbal assurance that the loan has been locked with the lender.
•Respond favorably to a solicitation without checking prices with other loan providers
•Assume that a lock covers all lender fees.
•Confuse a no-cost mortgage with a no-cash mortgage.

Qualifying for a Mortgage
•Assume that paying off credit cards on which you have been delinquent will improve your credit score.
•Assume that shopping multiple loan sources will adversely affect your credit rating.
•Confuse "qualification" with "approval".
•Accepting that you need an adjustable rate mortgage to qualify because the loan officer said so.
•Allow a friend to qualify for a mortgage using your deposit account.

Selecting the Mortgage
•Assume that paying points is a loser.
•Assume that the cost of mortgage insurance is the premium rate which is comparable to the interest rate.
•Assume that negative amortization on an ARM is to be avoided at all costs.
•Assume that you must pay extra to convert a monthly payment loan into a biweekly payment loan.
•Assume the amount of cash you put into the transaction is the same as the down payment.
•Make a large down payment on an FHA loan.
•Neglect to ask whether your loan has a prepayment penalty, and verify the answer on the Truth in Lending (TIL) disclosure statement.
•Believe it when you are told that you will save money with a simple interest mortgage.
•If you have a simple interest mortgage, not making your monthly payments early.
•Believe that an interest-only loan is less costly to amortize, or carries a lower interest rate than the same loan without the interest-only option.
•Believe that on an interest-only ARM, the initial rate holds for as long as the interest-only period.
•Select a flexible payment ARM without considering the risk of serious payment shock down the road.
•Assume that an interest-only loan allows you to pay off the balance faster than with other mortgages.
•Believing that a lock covers fixed-dollar lender fees, and rate adjustment caps on adjustable rate mortgages.

Taking a Second Mortgage
•Neglect to ask what the margin is on your HELOC.
•Neglect to ask about the second mortgage lender's policy on subordination.
•Consolidate existing debts in a new second mortgage without considering the implications for your ability to terminate mortgage insurance, refinance your first mortgage, move to another city, etc .
•Raise needed cash with a new second mortgage, or with a cash-out refinance, without comparing the costs of the two alternatives.
•Pay for mortgage insurance, or take a second mortgage to avoid mortgage insurance, without considering whether the alternative might be cheaper.

Refinancing
•Measure the benefit of refinancing by comparing the reduction in monthly payment with the cost to refinance.
•Shop your existing lender first, rather than last.
•Take a no-cost refinance when you expect to be in the house for a long time.
•Measure the cost of a cash-out refinance with the APR.
•Refinance into a biweekly at a higher interest rate for the purpose of reducing total interest payments.
•Assume that a refinance is a good deal if it results in significant savings over your existing mortgage.
•Refinance without taking advantage of the 3-day right of rescission to ask yourself if the deal will really leave you better off.

Managing the Mortgage
•Take out a mortgage for the express purpose of getting a tax deduction.
•Fail to check if the lender is crediting payments (especially extra payments) properly.
•Assume your credit won't be badly damaged if you skip just one payment.
•Agree to co-sign for a friend or relative without considering all the implications.
•When a financial reversal endangers your capacity to pay the mortgage, do nothing until the lender calls about your delinquency.