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10 Mistakes People Make When Getting a Home Loan
A former loan officer explains what many mortgage brokers
don't want you to know.
by Ted Janusz
December 19, 2005
Most loan officers make a six-figures' income (with your money).
Below is the key information from a former mortgage industry insider
that mortgage lenders don't want you to know:
-
Not knowing which mortgage fees you can - and cannot - negotiate.
Or how the lender actually makes money on you.
-
Choosing and trusting the first loan officer you interview.
-
Using an interest-only or adjustable rate loan primarily to
qualify for a more expensive house. (You could be paying forever,
eventually getting in debt over your head or, at the very least,
you will pay more interest for a longer period of time.)
-
Thinking the interest rate is always the main thing. (Most
"astute" mortgage shoppers think they should call around to
"shop" rates. And "rate envy" is common, especially among male
borrowers. But what closing costs will you need to pay to get
that fabulous advertised rate?)
-
Not comparing the final fees listed on the closing documents
to the up-front estimates (to avoid the lender "packing" the
loan with added-on fees without your knowledge).
-
Not knowing if your mortgage has a pre-payment penalty - until
it's too late.
-
Thinking that renting is always "just throwing money away."
(At least in the short run, it can cost you thousands less to
rent. For instance, don't buy a starter house.)
-
Not knowing if you are paying a back-end yield spread or Service
Release Premium (if so, the lender has upsold you the rate).
-
Paying for mortgage life insurance, credit insurance or other
expensive lender add-ons (like the just-mentioned SRP, this
sale can increase the "kickbacks" the lender will receive from
various vendors).
-
Paying hundreds of dollars to have a company set up a biweekly
mortgage payment plan for you, something you can generally do
yourself - for free.
From a newly-released book, "Kickback: Confessions of a Mortgage
Salesman, How to Save $1,000s on Your Mortgage," Insight Publishing.
The author, Ted Janusz,
is a former senior loan officer of a regional mortgage bank and
wrote the book as part of his "penance." Janusz earned his MBA in
Marketing from the University of Pittsburgh and his BS in Accounting
from Slippery Rock University. He is a member of the National Speakers
Association and the International Speakers Network. Janusz now conducts
seminars across America for National Seminars Group and for eBay.
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