Entries from Searchlight Crusade tagged with 'cash'
Seller Carrybacks
A seller carryback is when the seller agrees to "carry back" at least part of the purchase price themselves. In other words, instead of getting the full sales price of the property (less outstanding liens), the seller accepts a...
Earnest Money: Copy of a Check or Proof Of Funds?
There's no question which I'd rather have. It has been traditional for a client to write a check to their broker's escrow account. Sometimes the check is actually deposited, but usually it's just held. It has recently become become a...
The Escrow Process and Reasons for Falling Out
There are all sorts of reasons why escrow falls through, but they fall into three main categories. They can best be described as failures of qualification, failures of the property itself, and failures of execution. Before I get into the...
Mortgage Accelerators, Money Merge, and Paying Your Mortgage Down
My article Debunking the Money Merge Account Scam has been getting a lot of attention and a large amount of hate mail lately. The scamsters that sell these things love to send me hate mail for exposing the fact that...
Rent to Own and Lease With Option to Buy
This has always been a portion of the market, but right now, more and more people are emphasizing it, or at least the ones who are able. Actual Rent to Own is rare these days, a sign that the...
The Lure and the Trap of Debt Consolidation - Payment Versus Cost of Interest
A while ago I did an article entitled Debt Consolidation Refinance - Doing it Wrong vs. Doing it Right. It's a good article, if I do say so myself. Nonetheless, I think there's more to say on the subject, not...
Don't Let Cash Distract You From Cost In Real Estate
There are many ways of suckering real estate consumers, and cash as an inducement to get people to swallow a raw deal is one of the most common. From sellers (usually developers), "free" upgrades are one of the most common....
Protecting My Buyer Clients Good Faith Deposit
The buyer's deposit is always at risk. This is just a fact of real estate transactions. I could pretend it's not so, but that wouldn't keep the deposit from being at risk - it would just make me a...
Prepaid Interest and Why You Never Really Skip a Mortgage Payment
Many people think that mortgage interest works like rent: paid in advance before you live in the property for the month. This is not the case. Mortgage interest is paid in arrears. As you begin the month, interest begins...
Is The Good Faith Deposit At Risk?
Many agents seem to answer this question differently depending upon whether their client is the prospective buyer or seller, according to what they think will make the client most comfortable. When their client is making an offer, "No, your...
Lump Sum Payments on a Mortgage and Alternative Investments For the Same Money
This visitor came from a search engine on this search: amortization of real estate loans early payoff based on a lump sum payment This is one of the smart things you can do. Not necessarily the smartest, mind you, but...
Choosing Buyer's Agents By Commission Rebate: Penny Wise, Dollar Foolish
I got this email the other day, responding to one of my Hot Bargain Properties posts on my other site: I am currently working with a coworker with no agreement. However, she has offered to rebate 50% of her...
Seller Paid Closing Costs (or, When Your Prospective Buyer Has No Money)
In many transactions when I originally wrote this, the buyer has absolutely no money, or an amount that was not sufficient to pay the costs that they would traditionally be expected to pay in order to close the transaction. Today,...
Short Sales of Real Estate, aka Short Payoffs
A while ago I wrote an article called, "What Happens When You Can't Make Your Real Estate Loan Payment." This is kind of a continuation of that, as I got a search that asked, "What is necessary to persuade a...
Negative Equity and Short Payoff Scams
Saw a sign driving: "Negative Equity? Sell and Get cash!" Notice that it doesn't claim that you can do so legally. I saw another of these signs on the way to the office this morning. When things are going sour,...
Debt Consolidation Refinance - Doing it Wrong vs. Doing it Right
There's a lot that gets written on this subject, mostly by loan officers looking for business. Well, don't think I'm not looking for business, but not with this post. Or if anybody calls me because of this, at least I'll...
Sourcing and Seasoning of Funds
People sometimes ask, "Why should the lender care where I got the money for the down payment? I earned it, it's mine - cash is cash!" They're right as far as they go. In general, the lender doesn't care...
Lenders Holding Your Money Hostage
My lender told me that there is an application fee? He said an application fee of $250 and then we'll need the appraisal fee and of course we'll need an inspection. Does all this sound legit, is there always...
The Self-Fulfilling Prophecy of Lender Fear
Most people, particularly first time buyers, want 100% financing or as close as they can get. Actually, most first time buyers don't have a down payment and couldn't put a significant down payment (5% or more) if they had...
Games Lenders Play, Part I: Misleading Advertising to Get You to Call
I get the same junkmail and spam most of you folks do. They don't know who I am when they send it out. It's just that I know what's going on behind the scenes with this stuff. So I thought...
Mortgages and Reverse Mortgages (RAMs) after Retirement
"Should People in their sixties take out a mortgage?" The short answer is "Not if you don't have to." Now if I suddenly vanish, the explanation will be that the loan industry put a contract out on me. Success...
Facts Of Life On Buying and Selling "Without an Agent"
I saw your article on on Searchlight Crusade about exclusive buyers agents and I have a couple follow up questions pertaining to my own situation that I am hoping you could shed some light on. I don't have any...
Impound Accounts Facts and FAQs
I've seen a fair number of questions on impound accounts in the last several months. An impound account, also known by the confusing term escrow account because the lender is holding it in escrow, is money that you give the...
Undisclosed Short Sales
What happens if a home you signed to purchase goes into foreclosure before the closing date? We were supposed to close on a home four months ago. On the day of closing we get a call from the seller's...
Should I Buy A Home? Part 1: Preparation
I am considering buying a home, although I have not made up my mind on the subject. This is not due to indecision, but rather due to a lack of necessary information. There are many factors to be considered...
Why Do I Have to Pay For The Appraisal When I Canceled Escrow?
I got an ill-mannered complaint email about how an evil loan officer from another company ordered the appraisal without waiting for the inspection to be done, and it turned out there was a minor problem that the seller likely could...
Assuming Seller Concessions On Loan Quotes
I recently received an email asking about a Good Faith Estimate on a $200k loan. The person asking my opinion attached the actual "estimate" to the email. In addition to a point of origination and a point of discount...
The Lender's Rule of Mortgage Payments
Every so often, someone who thinks they're a wit sends me a copy of The Rules For Relationships According To Women. Unlike those rules, which might have been funny around the time Nefertiti was a debutante, there are very few...
They Told Me Not To Make My Loan Payment
I've heard this story, in all of its variations, at least hundreds of times. Someone will send me an email and say "They told me not to make my loan payment because I was going to skip one. So...
What is the Best Investment Vehicle To Save For A Down Payment?
I just moved into a rental house with an option to buy. I figure I can probably save up around $40-45k for a down payment in three years. how should i save? The Roth IRA tax loophole for first...
There Is No Fairy Godmother for Loans
Really. I know that most people who read that title are replying "no kidding" but you would be amazed at how many people act like there is such a fairy godmother. I got an email yesterday that said, basically, "Help...
Reserves for Real Estate Loans
Thanks again for the terrific posts. I've learned more about mortgages in the past two months than I ever dreamed I might. I am looking to buy my first home soon, and have myself in a good credit position...
Mortgage Foreclosure and Taking of Other Assets
if our house is being foreclosed, can they take our retirement or make us sell our cars? we both have (1-2 year old) cars that are paid off. Can they take our cars or make us sell them to...
Seller's Failure to Disclose a Pending Assessment
I am about to close on a condo unit. At the last minute, we received the resale document from the management company. All units are being assessed a one time charge of $3000 due in full Nov. 1 for roof...
Cash Back From The Seller to the Buyer in Real Estate Sales
A while ago I dealt with a very disturbing phone call from a would be client. He was very happy with the way I found bargain properties, and wanted me to find him such a property. All very well and...
What if Your Partner Refuses to Pay Their Share of a Loan or Mortgage (or Won't Pay on Time)?
what happens if partner refuses to pay his half of the mortgage? The lender will hold you each responsible for payment in full. That's the long and the short of it. You both agreed to the loan contract, and...
Why the Real Estate Buyers Agent's Commission is Paid by the Seller
I have to admit I'm uncomfortable with it and don't like it. As a buyer's agent, here I am getting paid by someone who not only is not my client, but whose interests are aligned, in most issues, opposite to...
Low Equity (or Worse!) Relocations in a Buyer's Market
Hi, Dan! I just came across your website and you strike me as the type of guy who has answers for our situation: My husband and I built our home 2.5 years ago. We took out a second mortgage...
Loans with Stealth "Cash Out"
One of the things I hear a lot is that people are getting cash in their pocket from a refinance rate where there is no rebate. "I'm not paying any closing costs!" they proudly tell me, "The bank is putting...
Down Payment At Purchase or Wait Until Later To Pay The Mortgage Down?
Got a search engine hit for do I make a big down payment on a home or should make a lump sum payment after the mortgage It's hard to construct a scenario where using it as "purchase money" doesn't come...
Shopping For The Best Loan In The Changed Lending Environment
It shouldn't be any surprise to anyone with the headlines of the last few years that shopping for a mortgage loan has radically changed. Indeed, a lot of the regulatory changes seem directly aimed at what were the best...
Loan Qualification Standards - Loan to Value Ratio
Many folks have no idea how qualified they are as borrowers. There are two ratios that, together with credit score, tell how qualified you are for a loan. The more important of these two ratios is Debt-to-Income ratio, usually abbreviated...
Listing Agents and Pre-Approvals or Pre-Qualifications
It has become very trendy to ask for pre-approvals on loans, because so many escrows are falling through. Unfortunately, as I have explained in the past, Loan Pre-Approval Means Nothing, and prequalification means even less. Both are literally wasted paper....
Option ARMs and Cash Flow
One of the standard arguments I hear about Negative Amortization and Option ARM loans is that they "give the client the option to make a smaller payment if they need to." This so-called "Pick A Pay" benefit is a real...
Negative Amortization Loan Issues on Investment Property
Read your article on negative arm loans, and for the person who only owns a residence and most real estate investors it will not work. I own several properties, and the parcel to be refinanced is ocean front...so is...
Option ARM and Pick a Pay - Negative Amortization Loans
(This is a republish of one of the first articles I wrote back in early summer of 2005. Everything I wrote then still applies. I am grateful that lenders have for the most part, stopped offering these, as they were...
What if Your Partner Refuses to Pay Their Share of a Loan or Mortgage (or Won't Pay on Time)?
what happens if partner refuses to pay his half of the mortgage? The lender will hold you each responsible for payment in full. They don't care who pays; only that they get the full amount every month. That's the...
Disasters, Insurance, and the Mortgage
after Katrina I am upside down with my mortgage. my house is uninhabitable. My flood insurance check doesn't payoff the mortgage. How can i get a short payoff due to financial hardship - i.e. relocation loss of jobs and...
Developers and Incentive Money to Use Their Lender
Good Evening! My name is DELETED and my wife and I recently signed papers to purchase a property from DELETED in DELETED, CA. After our options, their lot premium, and the elevation charge, the house is listed at 425,000....
The Good Faith Deposit for Real Estate
A search I just noticed asked the question "Who gets the deposit if escrow falls through?" The theory of the deposit is that here is an amount of cash that the buyer is putting up as evidence of their ability...
Why Renting Really Is For Suckers (And What To Do About It)
(This article was originally written in August 2006. The market and loan rate figures have changed, but the basic information is the same) Okay, you might expect a Real Estate Agent to have a post with that title, but I'm...
Loan Providers Offering to Pay For The Appraisal
This is one of those commercial gambits I keep seeing that has nothing intrinsically wrong with it, and yet it is most often a tactic employed by the more costly loan providers. In short, sharks and scam artists. The basic...
My Loan was Denied - What Fees Can I Recover?
"What mortgage fees can i recover after loan denial" was a search I got. The answer is basically, "None." The only thing that should be charged up front is a credit check, which costs about $20, and you should be...
Buyers: Stretching Your Budget Means Compromise
As a good buyer's agent, I love a challenge. When someone comes to me trying to make a budget stretch just a little bit further than it would usually go, that's the kind of client I love to have....
The Difference Between a Reliable and Unreliable Prequalification or Preapproval Letter
If you don't know, chances are your agent doesn't either. Even if you know, chances are that your agent is as clueless as a newborn about loans. I and my clients get asked for all kinds of nonsense (to put...
Money You Will Spend Before Your Real Estate Purchase Is Consummated
Before you even make an offer, you should be aware that you're going to spend a significant amount of money in the process of buying a property before the transaction is consummated. This will largely be money that you will...
Be Careful Moving Your Down Payment Money
A while ago, I wrote Sourcing and Seasoning of Funds. You'd think I have a set spiel I give out, and I do. But I had a case where I didn't think I'd need it, and it burned me....
Dual Agency and Sellers Wanting to Keep a Buyer's Deposit
What can a seller do to get the deposit when the buyer backed out after the time limit and just won't sign off on the money? My real estate agent is not helping at all. The real estate office...
Don't Roll Mortgage Refinance Costs Into Your Balance If You Wouldn't Pay Them Cash
One thing that is very common in the mortgage industry is masking loan costs by rolling them into your loan balance. People are less sensitive to being asked to roll this money into their loan balance than they are about...
Asset and Income Rentals - Borrowing Trouble at Usurous Rates
This was originally published in 2005, but is one facet of the meltdown that is still going on, unfortunately. I found this article by Ken Harney in the paper. WASHINGTON - Call it funny money for the housing boom: Now...
Be Careful Not To Commit Fraud With Rebates
With many people pushing various "cash back to the buyer" schemes in real estate, a note of caution is needed. Actually, it's more like an entire symphony of caution. Because if there is a loan involved, you run the risk...
Do I Need A Deposit With 100% Financing Offers?
The answer is yes. Mind you, the only generally available 100% financing left is the VA loan, but few sellers are going to be willing to consider any offer that doesn't have a significant deposit. Consider the situation from the...
Things to Consider If You Can't Afford Your Payment
I read a lot of the info. you have on your web page ... thank you. I don't live in San Diego so I'm not looking for a home. What I am trying to decide is whether to sell...
Pay a Prepayment Penalty Now, or Wait to Refinance?
Hi Dan wondering if you could help me out I'm getting a lot of different answers from a lot of people and I'm really searching for help I bought my house brand new (three years ago) for 550,000, and...
The Qualification Letter I Use for My Buyers and Require For My Listings
I have never had someone tell me they wanted more information than this letter provides. I also require the prospective loan officer to fill if out for prospective purchasers of my occasional listings. DELETED (Mortgage Corporation) Address DELETED City...
Cash to Close - A Basic Primer
Cash to close has always been an underwriting standard, but more people are running into it as a reason why they cannot buy that property, why their buyers cannot perform, and why they can't get that refinance approved. With...
Cash Flow Versus Balance Sheet Accounting in Real Estate
An email: Greetings, I've recently been pitched the idea of refinancing my home and investing in apartments, or more precise, a four-plex. The idea is to refinance and get a negative amortization loan on my house. With the money I...
Some Risks of Lender Owned Properties (REO)
I have found your blog to be very informative. I was out riding my bike and rode past a house for sale. In a few minutes of Internet research I've found out a bit about it. The property is...
You've Got a Great Offer, But Can The Buyer Consummate It? (Cash to Close and Appraised Value)
A Purchase offer is not money in your pocket. As a matter of fact, accepting the wrong purchase offer can cost you tens of thousands of dollars if the buyers can't consummate. I recently dealt with clients making an...
Mortgage Fraud Is Still Happening - What To Do About It
You would think these nitwits would learn. You would think they'd all be out of the business. Sadly, that is not the case. It started innocently enough. It always starts innocently. This was an email I got (specifics redacted). Hi...
How Much Down Payment Do I Need and How Do I Get It?
With housing prices having crashed in most of the higher cost areas of the country, many people who were formerly priced completely out of the market have become interested once again in purchasing property. The drawback is that because...
VA Loans Have Become The Magic Bullet
Quite a while ago, when loan standards were other than they have become, I wrote an article with the title Is a VA Loan a Good Deal? Back then, if you could qualify for a loan that was both...
Why You Should Not Refinance Just to Lower Your Payment
I keep talking with people who don't understand that a higher interest rate on a refinance can result in a lower payment even though the cost of money goes up. In fact, they don't understand why refinancing tends to lower...
Buyers Should Never Pay to Repair A Property They Don't Own
I got a phone call from some out of state relatives looking to buy their first home. They want to buy a lender-owned property, but the only loan they have the down payment for is FHA. FHA has a few...
Deferred Payment Mortgages - Not As Bad As I Expected
If that title seems to be damning with faint praise, it's accurate. I'm not going to issue any kind of blanket endorsement for them, but they aren't as bad as I feared when I first heard about them. They are...
Assuming Seller Concessions On Loan Quotes
I recently received an email asking about a Good Faith Estimate on a $200k loan. The person asking my opinion attached the actual "estimate" to the email. In addition to a point of origination and a point of discount...
They Told Me Not To Make My Loan Payment
I've heard this story, in all of its variations, at least hundreds of times. Someone will send me an email and say "They told me not to make my loan payment because I was going to skip one. So...
There Is No Fairy Godmother for Loans
Really. I know that most people who read this are replying "no kidding" but it's amazing how many of those people do not understand it. I got an email yesterday that said, basically, "Help me! I bought with a prepayment...
Shopping For The Best Loan In The New Lending Environment
It shouldn't be any surprise to anyone with the headlines of the last two years that shopping for a mortgage loan has radically changed just in the last couple of months. Indeed, a lot of the changes seem directly...
Buyers: Stretching Your Budget Means Compromise
As a good buyer's agent, I love a challenge. When someone comes to me trying to make a budget stretch just a little bit further than it would usually go, that's the kind of client I love to have....
The Difference Between a Reliable and Unreliable Prequalification or Preapproval Letter
If you don't know, chances are your agent doesn't either. Even if you know, chances are that your agent is as clueless as a newborn about loans. I and my clients get asked for all kinds of nonsense (to put...
Zero Cost Real Estate Loans
Got a question asking if zero cost loans really exist. They do. I've done several dozen myself, for clients who listened to me about the nature of the loan market. Let me define what a zero cost loan is. It...
Be Careful Moving Your Down Payment Money
A while ago, I wrote Sourcing and Seasoning of Funds. You'd think I have a set spiel I give out, and I do. But I just had a case where I didn't think I'd need it, and it burned...
The Hope (Dashed) For Homeowners Program
an email: If you think it's worthwhile, how about an article that explains the HUD hope to homeowners program in plain(er) English. I don't consider myself terribly dumb, but I can't quite figure out who qualifies and who doesn't. One...
The Appraisal and Appraisers
Of all the issues having to do with a mortgage, the appraisal generates more overblown problems than any other part of the process. It's also one of the most critical areas to handle correctly. There are reasons for this: It...
The Qualification Letter I Use for My Buyers and Require For My Listings
I have never had someone tell me they wanted more information than this letter provides. I also require the prospective loan officer to fill if out for prospective purchasers of my occasional listings. DELETED (Mortgage Corporation) Address DELETED City...
Cash to Close - A Basic Primer
Cash to close has always been an underwriting standard, but more people are running into it as a reason why they cannot buy that property, why their buyers cannot perform, and why they can't get that refinance approved. With...
You've Got a Great Offer, But Can The Buyer Consummate It? (Cash to Close)
A Purchase offer is not money in your pocket. As a matter of fact, accepting the wrong purchase offer can cost you tens of thousands of dollars if the buyers can't consummate. I recently dealt with clients making an...
Mortgage Fraud Is Still Happening - What To Do About It
You would think these nitwits would learn. You would think they'd all be out of the business. Sadly, that is not the case. It started innocently enough. It always starts innocently. This was an email I got today (specifics redacted)....
How Much Down Payment Do I Need and How Do I Get It?
With housing prices having crashed in most of the higher cost areas of the country, many people who were formerly priced completely out of the market have become interested once again in purchasing property. The drawback is that because...
VA Loans Have Become The Magic Bullet
Quite a while ago, when loan standards were other than they have become, I wrote an article with the title Is a VA Loan a Good Deal? Back then, if you could qualify for a loan that was both...
Earnest Money: Copy of a Check or Proof Of Funds?
There's no question which I'd rather have. It has been traditional for a client to write a check to their broker's escrow account. Sometimes the check is actually deposited, but usually it's just held. In the last few months, it's...
Mortgage Accelerators, Money Merge, and Paying Your Mortgage Down
My article Debunking the Money Merge Account Scam has been getting a lot of attention and a large amount of hate mail lately. The scamsters that sell these things love to send me hate mail for exposing the fact that...
Rent to Own and Lease With Option to Buy
This has always been a portion of the market, but right now, more and more people are emphasizing it, or at least the ones who are able. Actual Rent to Own is rare these days, a sign that the...
Protecting My Buyer Clients Good Faith Deposit
As I wrote a few days ago, the buyer's deposit is always at risk. This is just a fact of real estate transactions. I could pretend it's not so, but that wouldn't keep the deposit from being at risk...
Prepaid Interest and Why You Never Really Skip a Mortgage Payment
Many people think that mortgage interest works like rent: paid in advance before you live in the property for the month. This is not the case. Mortgage interest is paid in arrears. As you begin the month, interest begins...
Is The Good Faith Deposit At Risk?
Many agents seem to answer this question differently depending upon whether their client is the prospective buyer or seller. When their client is making an offer, "No, your deposit could never possibly be at risk," while when their client...
Another Scam: "Negative Equity? Sell and Get Cash!"
Notice that it doesn't claim that you can do so legally. I saw another of these signs on the way to the office this morning. When things are going sour, there are any number of scam artists who will...
Sourcing and Seasoning of Funds
People sometimes ask, "Why should the lender care where I got the money for the down payment? I earned it, it's mine - cash is cash!" They're right as far as they go. In general, the lender doesn't care...
The Self-Fulfilling Prophecy of Lender Fear
I knew that people, particularly first time buyers, were going to be forced into condominiums in San Diego, I just didn't know how soon. Most people, particularly first time buyers, want 100% financing. Actually, most first time buyers don't...
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