Entries from Dan Melson's La Mesa Real Estate and Mortgage Website tagged with 'cash'
New Consumer Article: Assuming Seller Concessions On Loan Quotes
The new consumer article for today is Assuming Seller Concessions On Loan Quotes, which discusses why lenders do this: To make an expensive loan look not so expensive. But there is no way to get seller concessions (Seller Paid Closing...
New Consumer Article: They Told Me Not To Make My Loan Payment
The new consumer article for today is They Told Me Not To Make My Loan Payment. Ladies and Gentlemen, that's one of the top ways to get yourself in trouble when you're refinancing. What if your new loan cannot be...
New Consumer Article: There Is No Fairy Godmother for Loans
The new consumer article for today is There Is No Fairy Godmother for Loans. To avoid becoming a government statistic, ask prospective loan providers the hard questions before you sign on the bottom line - or better yet, before you...
New Consumer Article: Shopping For The Best Loan In The New Lending Environment
The new consumer article for today is Shopping For The Best Loan In The New Lending Environment. There have been changes in the lending environment in the last few months, changes that are practically designed to make loan officers with...
New Consumer Article: Stretching Your Budget Means Compromise
The new consumer article for today is Buyers: Stretching Your Budget Means Compromise. It's something too rarely covered by the press, and by real estate agents. There are tradeoffs in every choice a buyer makes, and unless they have a...
New Consumer Article: The Difference Between a Reliable and Unreliable Prequalification or Preapproval Letter
The new consumer article for today is The Difference Between a Reliable and Unreliable Prequalification or Preapproval Letter. Whether you're a buyer or a seller, having the right lender letter is a good thing. If you're a seller, you know...
New Consumer Article: Be Careful Moving Your Down Payment Money
The new consumer article for today is Be Careful Moving Your Down Payment Money. Underwriters want to see a trail on any money you have. If you don't have or can't show such a trail, the presumption is going to...
New Consumer Article: The Hope (Dashed) For Homeowners Program
The new consumer article for today is The Hope (Dashed) For Homeowners Program. I really thought that most folks understood this was all political theater - unlike the $700 Billion for lenders who screwed up by the numbers, intentionally disregarding...
New Consumer Article: The Qualification Letter I Use for My Buyers and Require For My Listings
The new consumer article for today is The Qualification Letter I Use for My Buyers and Require For My Listings, which talks about how I communicate that my buyers really are qualified, and how I ascertain that potential buyers of...
New Consumer Article: Cash to Close - A Basic Primer
The new consumer article for today is Cash to Close - A Basic Primer. The article discusses how much cash a buyer of real estate has to have in order to make the transaction happen. Proving that you have this...
New Consumer Article: You've Got a Great Offer, But Can The Buyer Consummate It? (Cash to Close)
The new consumer article for the day is You've Got a Great Offer, But Can The Buyer Consummate It? (Cash to Close). These days, you have to pay attention to details like the limits of how much lenders are willing...
New Consumer Article: Mortgage Fraud Is Still Happening - What To Do About It
The new consumer article for the day is Mortgage Fraud Is Still Happening - What To Do About It. There are still tricks that the less scrupulous agents and loan officers are pulling that are just as fraudulent as at...
New Consumer Article: How Much Down Payment Do I Need and How Do I Get It?
The new consumer article for the day is How Much Down Payment Do I Need and How Do I Get It?. The title says it all: How much do you need, and ways of coming up with it in a...
New Consumer Article: VA Loans Have Become The Magic Bullet
The new consumer article for the day is VA Loans Have Become The Magic Bullet. It isn't that VA loans have changed; it's that everything else has severely tightened the qualifications. I'll try and have at least a couple of...
New Consumer Article September 22, 2008
Today's new consumer article is Earnest Money: Copy of a Check or Proof Of Funds?, talking about what good various sorts of evidence of deposit do....
New Consumer Article September 15th, 2008
Today's new consumer article is Mortgage Accelerators, Money Merge, and Paying Your Mortgage Down, which deals bluntly with the contention that these programs that allegedly "pay off your mortgage in a fraction of the time" actually help. They don't. I...
New Consumer Article August 28th, 2008
Today's new consumer article is Rent to Own and Lease With Option to Buy, which talks about one alternative to the traditional sale that usually gets a seller a higher price, while not requiring a buyer to come up with...
The Lure and the Trap of Debt Consolidation - and the Possible Benefits
A while ago I did an article entitled Debt Consolidation Refinance - Pros and Cons. It's a good article, if I do say so myself. Nonetheless, I think there's more to say on the subject, not just from a point...
What to Do When Your Loan is Declined
Loans are declined, or actually, the next thing to it, all the time. It is pretty rare for a loan to be outright rejected; I do not recall ever having had a loan outright rejected. That's a sign of a...
Deferred Payment Mortgages - Not As Bad As I Expected
(Note: As of the time I updated this, the website of the company was off-line. I do not know why and a casual perusal of search engine results is uninformative) If that title seems to be damning with faint praise,...
Don't Let Cash Make You Stupid About 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
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...
Mortgage Accelerator Programs: A Good Basic Idea, But the Devil Is In the Details
The most recent hot thing in mortgage circles is a mortgage accelerator program. Now I've heard other things, most notably biweekly payment programs, called mortgage accelerators in the past, so let me take a moment to define exactly what I'm...
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...
Never Choose A Loan (or a House) Based Upon Payment
In all of my conversations on mortgages with prospects, there is one subject that comes up over and over and over again, and that is the subject of payment. "But that loan over there only has a payment of $1450!...
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...
Choosing Buyer's Agents By Commission Rebate: Penny Wise, Pound Foolish
I got this email the other day, responding to one of my Hot Bargain Properties posts: I am currently working with a coworker with no agreement. However, she has offered to rebate 50% of her commission. Are you negotiable with...
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...
Should Negative Amortization Loans Be Banned?
Having written several articles on Negative Amortization Loans, telling of the details of what is wrong with them, and even destroying the myth of Option ARM cash flow, I sometimes get asked if I would like to see them banned...
Manufactured, Modular, and Site-Built Homes: How Lending Practices Drive the Sales Market
Many people are unaware how profoundly lending policies influence the market for residential property. So I am going to go over the various gradations in available loans for various types of property. Pretty much everyone is familiar with the standard...
Recourse Loans and Non-Recourse Loans
do mortgage companyies usually seek a deficiency judgment on home foreclosures Depends upon whether it is a recourse loan or not. A recourse loan is one where the lender can come after you for any excess amount of money...
Why Do I Have to Pay For The Appraisal When I Cancelled Escrow?
I got an ill-mannered complaint email about how an evil loan officer 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 have had repaired,...
What is the Best Way 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...
Cash Back From The Seller to the Buyer in Real Estate Sales
Yesterday 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 good. But...
Is a VA Loan a Good Deal?
Veterans Administration, or VA loans, are government guaranteed loans available to veterans and active duty members of the armed services, that enable them to purchase homes for not money down. In fact, VA loans go up to 103 percent of...
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...
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...
Why Renting Really Is For Suckers (And What To Do About It)
Okay, you might expect a Real Estate Agent to have a post with that title, but I'm going to surprise the doubters by hauling out a spreadsheet and proving it with numbers. The fact is that if you have moderately...
What Fees Can You Recover If Your Loan Is Denied?
"What mortgage fees can i recover after loan denial" was a search I got. The answer is basically, "None." Indeed, one of your search criteria should be mortgage providers that don't charge anything up front, except maybe a credit check...
Buying Investment Property - An Example of the Issues
My aunt is going to move to a new condo and wants to sell her old one. I would like to buy her old condo as an investment and rent it out (as I am already a home-owner). This...
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...
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 2006 cars that are paid off. Can they take our cars or make us sell them to pay them...
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...
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...
Lump Sum Payments on a Mortgage and Alternative Investments
This one came from a search engine: 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 smart. The question...
Debt Consolidation Refinance - Pros and Cons
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...
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....
The Basics of 1031 Exchanges
Section 1031 of the IRS Code has to to with tax treatment on the exchange of one parcel of real estate for another. It's similar to Section 1035 which covers most non real estate exchanges. Car for a car. Boat...
Deposits on Purchases of 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...
Biweekly Mortgage Spam
Sometimes spam makes writing an article all too easy. Here is a piece of spam I got today because my email at work contains "realestate.com", with identifying information taken out. This goes to show that the financial ignorance of most...
Special Programs Means Potential Special Problems
An e-mail I got from a single mother I spent two months working with before she found a special low income program for a property she wouldn't have been able to afford through me. The first paragraph is her addition...
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...
Money You Spend Before You Buy Real Estate
Before you even make an offer, you should be aware that you're going to spend a significant amount of money well before the transaction is consummated. There are methods of avoiding it, but they're a good way to get yourself...
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...
Lowballing versus "Junk Fees"
One of the things that most mortgage and real estate consumers get mixed up on is the distinction between low-balling and junk fees. Junk fees are when they add fees that really aren't necessary to what you're paying. Low-balling is...
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...
The Best Way To Create Problems In Real Estate
Have a "looking for cheap" attitude, especially on services meant to protect you. It's great to have a "looking for value" attitude. If I cost more than someone else, it is in your best interest to ask why, and ask...
Reserves
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...
Rebates: Be Careful Not to Commit Fraud
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...
Deciding You Don't Want A Particular Mortgage Loan
I have questions to ask you about the loan for house. I have been work with one broker since DELETED and I just tell her on the phone that I chose her and that she can start to do...
Do I Need A Deposit With 100% Financing Offers?
The answer is yes. Consider the situation from the seller's point of view, and the answer becomes obvious. Here is someone who is proposing to not put any of their own money into the deal. What's their motivation to consummate...
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...
Negative Amortization Loans - More Unfortunate Details
My article on Option ARM and Pick a Pay - Negative Amortization Loans is one of my most popular. It gets all kinds of search engine hits, both here and at my other site. If I don't get at least...
Mortgage Loan Advertisements: Horrible and Getting Worse
Recently, a couple of mortgage places have been advertising "30 year fixed rate loan at 5.65%" like that's the lowest rate out there and it's some kind of great loan. It's not. I have 5.375% available to me. If you...
Hourly Pay Instead of Commission For Agents
This was a comment on an article on my other site, Real Estate Sellers Giving A Buyer Cash Back. The interesting thing is proposing hourly pay instead of commission for agents. That makes a lot of sense. Disclosing (net) cash...
Property Cash Flow Versus Balance Sheet Accounting
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...
Real Estate Sellers Giving A Buyer Cash Back
When we sold our home just over a year ago we were talked into selling for a bit more than the original offer so the person could get money back to do renovations... I objected based on percentages and...
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...
Should You Pay Off Your Mortgage Faster?
I have to admit to being conflicted. The numbers say no. The psychology says yes. Let's examine both. Most first mortgages out there are between six and seven percent, and tax deductible at a marginal rate of about 28%. If...
Games Lenders Play, Part VII - Selling Mortgage Accelerator Programs
I thought I'd share this with you as an example of the sort of mind set to beware. This is a real email I received a few days ago, with identifying information redacted I found you through the DELETED web...
Changes in Lender Attitudes: The Push Towards Bigger Loans
One of the consumer attitudes I encounter constantly is the feeling that if you cannot afford the loan, the lender will not loan you the money. This safety zone common sense sort of reliance upon lender policy as a backstop...
100% Financing: Buying A Home With Zero Down Payment
Is there any program that i can qualify for a home with no down payment? Lots of them. We may not be talking number of grains of sand on the beach or drops of water in the ocean, but...
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