Entries from Searchlight Crusade tagged with 'payment'
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...
Magical Thinking About Mortgage Loans
(This is an updated reprint of an article written in February 2007. The Era of Make Believe Loans that made it easier to qualify people for inflated loan amounts ended abruptly a few days later, but the sort of thinking...
What If You Cannot Refinance Later?
People always assume they'll be able to refinance later. Even most of my articles have it as an implicit assumption. But what if you can't refinance later? There are situations where it happens. Many situations, as millions of people...
Don't Allow Yourself To Become A Victim of Bad Real Estate Practice
This woman made herself a victim stayed in a hotel for 7 weeks looking for my "Dream Home." And, when I found it, even though it wasn't in my price range, I knew I would do anything I could to...
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, with identifying information redacted. I found you through the DELETED web site and I thought...
Probate and Foreclosure and Planning Ahead
This question brought someone to my site: If my house is going into foreclosure but the house is also in probate, can the lender actually go forward with the foreclosure sale while the house is in probate? The short answer...
Real Estate: Getting From Where You Are To Where You Want To Be
When I'm driving, and get to busy main streets, I hate turning left onto major streets unless there's a light there. Traffic is coming hard both ways, usually at high speeds, and with only intermittent breaks in each direction. If...
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...
Buying Your Final Home: Payment versus the Rate/Cost Tradeoff
Hello, Mr. Melson, I am one of your legion of fans of your www.searchlightcrusade.net website, having lucked into stumbling upon it by hyperlinking from another site. It is my goal to read EVERY ONE of your archived articles before I...
How Do I Get Rid of Private Mortgage Insurance (PMI)?
"How do I remove PMI?" was a question that I got. First off, a definition. Private Mortgage Insurance, often abbreviated PMI, is an insurance policy that the bank may make you buy in order to get the loan. It is...
One Loan Versus Two Loans
One of the questions we ask all the time is whether to do your financing as one loan or two loans. Until comparatively recently, one loan was the default option, but people have been learning that splitting their home financing...
How Can I Lower The Down Payment Requirements So I Can Buy Real Estate?
With a few lenders starting to loosen their requirements slightly in San Diego, it's becoming increasingly obvious that the bottom is behind us. However, the issue has now become, "I don't have much of a down payment. How do...
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....
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...
Unsustainable Loans You Should Not Use to Purchase a Property
You've probably heard the horror stories, and I've mentioned the possibility more than once. Some unsuspecting person is looking at properties beyond their price range, and it therefore has all kinds of attractive features that properties which are in their...
Why Cost Is As Important As Rate For Mortgage Loans
When I wrote explaining why borrowers should consider a 5/1 ARM, because the tradeoff between rate and cost is lower for that loan, and most people don't keep their loans 5 years anyway, so having a likely need to...
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...
Zillow Post for First Time Buyer Advice
(This is a reprint from December 15, 2006 that still has quite a bit to offer. There have been market changes which I will talk about but the original stands up well) Drew over at zillow.com asked me to do...
How to Tell If You Can Afford This Property
Note: Since this article was originally written, there have been changes in the loan marketplace. The negative amortization loan is no longer available and the damage it did has finally become obvious to everyone with pretense of a functioning brain....
The 2010 Good Faith Estimate (Page Three)
This is the conclusion of the series begun in The 2010 Good Faith Estimate (Page One) and continued in The 2010 Good Faith Estimate (Page Two) Page Three is where the most blatant lies of this whole piece take...
The 2010 Good Faith Estimate (Page Two)
Continued from The 2010 Good Faith Estimate (Page One) The next section is on origination charges. Indeed it is titled "Your adjusted origination charges" It starts with "Our origination charges" saying this is the charge for doing the loan....
The 2010 Good Faith Estimate (Page One)
I had a great rant about the limitations of the Good Faith Estimate all planned out in my head when I when I was in the very first stages of planning this website in my head. It was the first...
Mortgage Accelerator Programs: A Good Basic Idea, But the Devil Is In the Details
The recent hot thing in mortgage circles is a mortgage accelerator program. 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 talking about....
My Sixty Second Public Service Announcement about Buying Real Estate
Here was an idea I had: Pack a list of the most important things consumers need to know about buying real estate, as packed into the words I can say in sixty seconds without sounding like an over-clocked squirrel. Here...
Online Mortgage Quotes
(This is a reprint from December 2006, with a few updates. It is instructive in the wake of a certain new mortgage quote service, launched with great fanfare. The negative amortization loan is gone, but I'm seeing lots of other...
My Thirty Second Public Service Announcement On Mortgage Loans (UPDATED)
I usually write medium-long articles, Part of that is because I've done all of the easy subjects, part because sound bites facilitate sloganeering, not serious thought that's likely to result in a better answer - or the realization that you've...
Do Not Sign Loan Disclosures That Don't Apply To Your Loan
from an email: First let me say that I really learned a lot from your postings/articles/website; its awesome that a resource like yourself exists. Now to the problem. I recently refinanced and the mortgage broker lied to me about many,...
Selling to Avoid Foreclosure in a Buyer's Market
Found this on a public forum I need help to stop foreclosure on my home. I need to sell quickly? I am a couple months behind on my payments and want to sell now. I am not looking to make...
The Difference Between Note Rate (APY) and APR
I am continually horrified how many people shop their loans by APR, just as I am by people shopping their loan based upon payment. Why? Because in either case, you're setting yourself up to spend a lot of money in...
What Happens When You Can't Make Your Real Estate Loan Payment
I've written a lot here about how to manage your mortgage so that you control it instead of it controlling you. Let's consider what happens when that project fails. If you don't pay your mortgage, on time, no big deal...
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...
Games Lenders Play Part II More Misleading Advertising
(This was originally published September 29,2005) Here's another advertisement that I got in the mail: "Pick a Pay, Any Pay!' The Revolutionary Option ARM!" "Start rates as low as 1%!" Loan amount $100,000 Payment $321.64 $200,000 $643.28 $300,000 $964.92 $400,000...
From How Much You Make to A Payment and Price You Can Afford
I'm clueless about how home loans work. Is there any way to figure out how much I can afford to spend per month on a home. If I were to get a home for $(figure) how much would that...
Prepayment Penalties and Biweekly Payment Schemes
From an email: I was wondering if you could tell me whether the following ways to save on interest are actually possible. If they are what are the penalties typically associated with these suggestions. I know you have mentioned a...
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...
Never Choose A Loan (or a Property) Based Upon Payment
For years when the market was hot, in all of my conversations on mortgages with prospects, there was one subject that came up over and over and over again (and still does), and that is the subject of payment. "But...
In Order To Deal With Looming Foreclosure, You Must Get Out of Denial
A while ago, I got a call from a hard money lender, asking what I could to to "rescue" one of his clients by refinancing. He was being about as altruistic as a drowning man. What he really wanted...
"Should I Refinance?" - Consider Overall Cost of Money, Not Payment
With the state of financial education in this country, many people shop for loans by payment, figuring the lowest payment is the best loan. As counter-evidence to that idea, let us consider the negative amortization loan. I've seen them...
Fear and Greed, or How Did The Housing Bubble Get So Big?
(This was originally written February 16, 2006, but more people are interested in it now) One of the occasional questions I get from people has to do with why the housing bubble got so big (or if you're one of...
Forty and Fifty Year Mortgages
For a while there, the forty year mortgage had started to make a comeback, and a few lenders started introducing the fifty year mortgage. The reason, straight from the horse's mouth, the lender's representatives, is lowered payments. In an uncertain...
Should I Buy A Home? Part 2: Process
Continued from 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...
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 All The Fuss Over Real Estate Transactions?
Why doesn't real estate just sell for the asking price instead of having to go thru all the paper work...? Wouldn't it be easier to just put a price on it and sell it for that price? We don't...
Games Lenders Play, Part V - Selling a Low Payment
Hello, I've been reading your website for awhile now, and have found it very helpful as I'm learning to navigate this crazy loan process! I had a question I was wondering if you could write about/answer. We currently have...
The Consequences of Not Shopping Multiple Lenders
Minorities get higher rates. They add that the fact minorities are more likely to borrow from institutions specializing in high-priced loans could mean they are being steered to such lenders or that some lenders are unwilling or unable to serve...
Payment, Interest Rate and Up Front Costs: Choosing a loan intelligently
Most people tend to shop for a mortgage based upon the payment. They figure the lowest payment will be the cheapest loan. This is the way most people make banks rich. Because they are looking for the loan with the...
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...
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...
Avoiding Foreclosure in Bankruptcy
How do I keep my home after filing bankruptcy. The Mortgage company wants to foreclose? I want to know if there is anyway to keep the home even after filing chapter 7 bankruptcy. I want to know if there...
Wanting a More Expensive Property Than You Can Really Afford
This is one of the biggest issues with my local real estate market. Because the San Diego market has very high demand and limited supply of property, prices are high. A reasonable two bedroom condo runs around $200,000. A 1200...
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...
Investors Aren't The Only Ones Who Can Fix Ugly Properties
A couple years ago, I took a look at a lender owned property a few miles from my office. It was ugly. I mean ugly. The yard was a mess, there was a deck that was rotting. The facade looked...
The "We'll Keep You In Your Property" Scam
I've been aware of this scam for some time, but with a larger than normal number of people in foreclosure or otherwise at the end of their rope, it's probably past time to cover this. It is a pure scam...
Full Circle: Back to More Traditional Lending Standards
I've seen more changes in the lending industry in the last few months than the previous five years. But those changes mostly restored us to the place we were a few years ago. There is plenty of money available, rates...
Student Loans and Real Estate Loans: Default, Repayment vs. Nonpayment and Consolidation
This is one of those things that trips up people to buy a house or refinance it: student loans. First off, Form 1003, the Federal Uniform Residential Loan Application has the following relevant questions on page 4, among the...
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...
Saving Money by Refinancing Your Mortgage
pfadvice talks about debunking a money myth and perpetuates one of his own. He took issue with someone refinancing to lower their monthly payment, insisting instead that the term of the loan was all important. His point is understandable in...
Refinancing Out of A Negative Amortization Loan (Or Any Other) Before The Penalty Expires
HI, My name is DELETED and my husband and I are searching for a way to get out of our Negative ARM loan before we get upside down. Our problem right now is our loan to value. Our loan right...
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...
Loan Qualification Standards - Debt to Income Ratio
Many people have no clue how qualified they are as buyers, or borrowers. There are two ratios that, together with the credit score, determine how qualified someone is for a loan. The first, and by far the more important, is...
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 Loans - More Unfortunate Details
(This is a reprint originally from December 2005. I have reasons for reprinting it even though these loans are not currently available) My article on Option ARM and Pick a Pay - Negative Amortization Loans is one of my most...
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...
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....
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...
The Tradeoff between Rate and Cost in Real Estate Loans
The question every good loan officer hates is "What is your lowest rate?", usually the first thing in a phone conversation. People think that this sort of rate shopping is going to help them. The fact is that it almost...
What Are Your Options If You Can't Make Your Mortgage Loan Payment?
I found you on the Web after doing some research for my parents regarding short sales and foreclosures. I appreciate your straight talk regarding the whole loan and real estate process which I know they find incredibly intimidating. Right...
Whatever the New Trick in Loans is, It's an Attempt to Keep From Really Competing On Price
It seems every week I get asked about some new or revived trick that loan providers are pulling. The one thing they all have in common is that they are methods to avoid competing on price. What the basic terms...
Loan Cosigners in Real Estate - A Lot of Risk For Not Much Gain
Every so often I get questions about loan cosigners. The main borrowers do not qualify on their own, so they get someone - most often mom and dad - to cosign. Cosigners are a different thing, or so I understand,...
What is Loan Amortization?
I keep getting hits for this, so people must want it explained. Loan Amortization is nothing more than the process of paying the loan off by regular payments over time. Leave it to the experts to come up with a...
Investment Property and Loan Qualification
One of the things that has constricted the most with the current paranoid lending environment is the ability to use rental income to qualify for a mortgage. It seems that lenders are seizing upon any excuse to deny income...
Why The Higher Rate Loan Is Often Better
The short answer is "Because it costs less". It takes time to recover the extra money you spend to get a lower rate via that lowered cost of interest, and most folks don't keep their loans long enough. There is...
Military Housing Allowance and Loan Qualification
One of the things that is really helping military families afford good properties is the military housing allowance and the way that lenders treat it, making it much easier for them to qualify with regards to debt to income...
Fifteen Year Loans: Are They A Good Idea?
My take on the matter is "mostly no", but they do have some uses. The one advantage that they usually carry a lower interest rate. There have been exceptions to this, just as there have been exceptions to the...
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...
Refinancing Your Property with Less Income Than You Had When You Bought
Hello, When my husband and I bought our home 2.5 years ago (two bedroom condo) we qualified for the loan ($250,000) based on both our incomes. Then I had a baby and stopped working. We've never missed a payment...
Refinancing When You Owe More Than The Home Is Worth
I've been looking around for an answer to this but my searches haven't returned anything useful. Say you buy a house and with that house you finance in a pool. House was $210,000 and pool is $40k. $250k mortgage....
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...
Temporary Rate Buydowns
Every so often I run across a reference to a "rate buydown" I don't like to use them because they don't benefit the client, but I should explain them, what they are, and how they work. A rate buydown is...
Existing Debt: The Biggest Hurdle in Mortgage Loan Qualification
I got a question about what the number one obstacle is to most people qualifying for the loan on the property they want. The answer is "existing debt." Credit cards, student loans, car payments, etcetera. It seems like more people...
Property Advertisements: Trolling for Clients and Not Very Truthful
The first thing you need to understand in reading any property advertisements is that agents write them to get people to call. They are trolling for clients, not sales. Except in the case of someone who doesn't accept dual agency...
Mortgage Loan Advertisements: Horrible and Getting Worse
(Rates were much higher when I originally wrote this) 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...
Issues with Divorce and Real Estate
The bottom line on this question is always, "Whatever the courts say." Divorce law is complex, and different from state to state, and even when you think you've got a clear message in the law as written, the courts may...
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...
Zero Interest Credit Cards versus Home Equity Line Of Credit
Once upon a time, I received an email about the virtues of zero interest credit cards as opposed to Home Equity Lines of Credit. I've organized both the email and my response in order to facilitate understanding: You raise a...
Read The Full Note Before Signing
Just got a search "how can I tell if my prepayment penalty applies to selling my home" Read The Full Note. You need to do this before you sign it. I know that many people are just thinking "Sign this...
Questions You Should Ask Prospective Loan Providers
Mortgage - Questions you must ask every provider about every loan when you are shopping. Permission is hereby granted to print this out and use it for non-commercial purposes so long as no alterations are made and copyright is preserved....
Games Lenders Play (Part IV) - Lying About Loan Type
I was approached by these folks a while ago via email. I attempted to get them to write up the experience themselves but I wanted to write something about this before I completely forgot about it. This whole exchange is...
Why You Should Not Walk Away From Real Estate Because You Owe More Than It's Worth
I keep reading stuff on the internet advising people who are upside down to just walk away if they are a upside down on their mortgage. This has got to be right up there with the worst financial advice...
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...
Biweekly Mortgage Spam
Sometimes spam makes writing an article all too easy. Here is a piece of spam I got, probably because my email at work contains "realestate.com", with identifying information taken out. This goes to show that the financial ignorance of most...
How Can A Temporary Buydown Help Realtors and Agents?
That was a question I got. The answer is that it doesn't make a difference, but it used to be one more way you could be conned or cozened into buying a more expensive property than you could really afford....
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...
The 2010 Good Faith Estimate (Page Three)
This is the conclusion of the series begun in The 2010 Good Faith Estimate (Page One) and continued in The 2010 Good Faith Estimate (Page Two) Page Three is where the most blatant lies of this whole piece take...
The 2010 Good Faith Estimate (Page Two)
Continued from The 2010 Good Faith Estimate (Page One) The next section is on origination charges. Indeed it is titled "Your adjusted origination charges" It starts with "Our origination charges" saying this is the charge for doing the loan....
The 2010 Good Faith Estimate (Page One)
I had a great rant about the limitations of the Good Faith Estimate all planned out in my head when I when I was in the very first stages of planning this website in my head. It was the first...
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