Entries from Dan Melson's La Mesa Real Estate and Mortgage Website tagged with 'payment'
New Consumer Article: The 2010 Good Faith Estimate (Page Three)
Today we have the final installment in the series on the new Good Faith Estimate formThe 2010 Good Faith Estimate (Page Three). Your government that should be protecting you from the worst sort of mortgage provider lies is now actively...
New Consumer Article: The 2010 Good Faith Estimate (Page Two)
The second installment in the series The 2010 Good Faith Estimate (Page Two) is now up. Read it and weep - for consumers nationwide who were hoping the government would provide the solution to their troubles. Didn't happen. Instead, it's...
New Consumer Article: The 2010 Good Faith Estimate (Page One)
It's been a while, but the most recent Transaction From Hell (seller's tenants didn't want to move out - or even let inspectors in) is finally over and I've had a little bit of chance to recover. Today's new consumer...
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: Student Loans and Real Estate Loans: Default, Repayment vs. Nonpayment and Consolidation
The new consumer article for today is Student Loans and Real Estate Loans: Default, Repayment vs. Nonpayment and Consolidation. These are the three issues that are most common for loan applicants to run afould of....
New Consumer Article: Investment Property and Loan Qualification
The new consumer article for today is Investment Property and Loan Qualification. It has become exceedingly difficult to get credit for rental income when you apply for a new mortgage, with the upshot being that when the lender won't agree...
New Consumer Article: Military Housing Allowance and Loan Qualification
The new consumer article for today is Military Housing Allowance and Loan Qualification. For all the nonsense the military puts up with, this is one instance where the government treats them better than just about any other employer....
New Consumer Article: Fifteen Year Loans
The new consumer article for today is Fifteen Year Loans: Are They A Good Idea?. Lots of nonsense gets put out there about fifteen year loans, and to many people there is a certain cachet to only needing fifteen years...
UPDATED Consumer Article: Refinancing When You Owe More Than The Home Is Worth
This morning I updated my popular article Refinancing When You Owe More Than The Home Is Worth, talking about the changes in the possibilities since I originally wrote it. I really want to be writing more original stuff, but...
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: Why You Should Not Walk Away From Upside-Down Real Estate
Today's new consumer article is Why You Should Not Walk Away From Upside-Down Real Estate. You shouldn't, if there is any alternative. Doing so takes a theoretical loss on paper and turns it into something concrete with real world consequences....
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 26th, 2008
Today's new consumer article is What If You Cannot Refinance Later?, which addresses a very real concern that there are many reasons why people may not be able to refinance their property at a later date, so even though the...
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...
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...
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....
What Exactly do First Time Home Buyers Need?
That's one of the questions I've been asked, and it deserves an answer. Know that there is some flexibility to the answer, as there are embedded trade offs. You don't need as much of an income, or as high of...
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...
Mortgage Lenders Don't Want to Compete on Price
Yet that is exactly what you want them to do. To avoid competing on price, they have all kinds of distractions they offer to make life more convenient, but not cheaper. They offer automatic payment options, the convenience of having...
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...
Why Cost Is As Important As Rate For Mortgage Loans
A few days ago I wrote an article 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...
Zillow Post for First Time Buyers
Drew over at zillow asked me to do a short little Q & A piece for them. It went up a few days ago, and I thought I'd post my original piece here as well. What are some online resources...
Can I Afford This Property?
Cold Hard Fact for today: The average Real Estate Agent or Loan Officer is not motivated to tell you that you can't afford your property. For the agent you are trying to talk people out of a property after they...
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...
From How Much You Make to A Payment 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...
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!...
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...
My Thirty Second Public Service Announcement On Mortgage Loans
I usually write 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...
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...
Forty and Fifty Year Mortgages
Recently, the forty year mortgage has started to make a comeback, and a few lenders have started introducing the fifty year mortgage. The reason, straight from the horse's mouth, the lender's representatives, is lowered payments. In an uncertain and unstable...
Making Certain You Shop Your Mortgage - Whether You Want To Or Not
Ken Harney has some welcome news on Move afoot to end uninvited mortgage pitches To a certain extent, these are a good thing for consumers. However, it gets way overdone. What happens is this. Let's say I get a client...
What Do You Know That I Don't Know?
Whenever I go scouting in public forums, somebody is always asking, "What's the secret? How do you get rich in real estate?" The alternate to this question is "What do you know that I don't?" These people are sure there's...
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...
Disasters 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...
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...
Private Mortgage Insurance Rates Jump
I knew this was coming. With holders of second mortgages not wanting to go above 90% Loan to Value Ratio, sellers of Private Mortgage Insurance, (PMI) have the "less than 10% equity" market all to themselves. The rates had...
Dealing With Looming Forclosure - Get Out of Denial
Last week, 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 was...
"Should I Refinance?" - Consider Overall Cost of Money, Not Payment
With Rates having dropped again, many people are looking at refinancing their properties. With the state of financial education in this country, many people will shop for loans by payment, figuring the lowest payment is the best loan. As...
Zero Cost Refinances
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 market. Let me define what a zero cost loan is. It is...
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...
Bankruptcy and Avoiding Foreclosure
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 $300,000. A 1200...
Investors Aren't The Only Ones Who Can Fix Ugly Properties
About a year 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 six months than the previous five years. But those changes simply restored us to the place we were a few years ago. Loans are easy to get, rates are...
Trying to Rehabilitate the Negative Amortization Loan - NOT!
The negative amortization loan is a very popular loan with certain kinds of real estate agents and loan officers. It has two great virtues as far as they are concerned. First, it has a low payment, and despite the fact...
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...
The Affordability of Property in San Diego September 2007
Let's consider where the rates are: Ever so slightly higher than a year ago. With the Fed boosting liquidity and cutting their short term rates, I expect this to change rapidly, but let's take a look at the actual...
Good Intentions and Over-Extended Homeowners
(I do use one piece of non G-rated language below. I hope you'll agree with me that it was necessary to convey the proper sentiment) USA Today had an oped, "3 ways to help borrowers without bailing them out" Their...
Games Lenders Play, Part II
Here's another advertisement that I've gotten 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 $1286.56 Could this help save you...
Games Lenders Play, Part I
I was a little shy of ideas of stuff I wanted to write about, and too lazy to finish my research on some stuff I'm working on. But: I get the same junkmail and spam most of you folks do....
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...
Negative Amortization Loans - Don't Panic!
No, this isn't the Hitchhiker's Guide to the Galaxy But having written half a dozen articles roundly critical of the way in which these loans are generally sold, it's not unusual for me to get e-mail like this one: Hi,...
Financing Tricks and What You Can Afford
Hi Dan, I am a first time home buyer and a big fan of the advice on your blog. I was wondering if you could offer some advice on my current situation. I apologize for sending you this question...
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...
"My Payment Is Too High and I Can't Make It"
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 Competing Based Upon 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...
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...
Mortgage Loan 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...
Considering Condos, Townhomes, and PUDs
The vast majority of the population out there wants single family detached housing. The virtues and benefits of the single family residence have been extolled ad nauseum, and the drawbacks of the alternatives are the stuff of urban legend. Unfortunately,...
Real Estate Loan Pre-Qualification
One of the most useless and overworked items in the real estate industry today is the pre-qualification for a loan. Sellers want buyers to be "pre-qualified", and buyers are seeking "pre-qualification" to convince buyers they are serious. The level of...
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...
Refinancing with Less Income
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...
Weighted Average Cost Of Capital
or Figures don't lie, but Liars Sure do Figure! With the loan rates being significantly higher than they were a couple of years ago, we've got a lot of people with loans in the low fives, interest rate wise. One...
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...
Real Estate Numbers: Calculators and Spreadsheets Are Your Friend But They Have Limits
On a fairly regular basis I get email asking what I think of this or that loan calculator on the web, this or that predictive model for real estate prices or loan rates, etcetera. Loan calculators are pretty simple when...
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...
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...
The Biggest Hurdle in Mortgage Loan Qualification: Existing Debt
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...
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...
Questions You Should Ask Every Prospective Loan Provider
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....
Housing Bubble Death Trap
That was the wording of a search engine hit I got. It's not literally a death trap, of course, only much financial pain. But the hyperbole is forgivable in today's modern society and the state of the current market. Other...
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...
Why Refinances Tend To Have Lower Payments
I keep talking with people who don't understand that a higher interest rate on a refinance can result in a lower payment. In fact, they don't understand why refinancing tends to lower the payment at all. Before I go any...
Option ARM and Pick a Pay - Negative Amortization Loans
I am not exactly certain how to start this essay. I'm kind of in a position analogous to writing Hitler's biography in late 1940. We know at this point he's a miserable excuse for a human being, but we don't...
How Can A Temporary Buydown Help Realtors and Agents?
That was a question I got. The answer is that it shouldn't make a difference, but it does. You see, lenders who work in markets that are less than A paper perform qualification calculations based upon the initial payment, at...
How To Effectively Shop for A Real Estate Loan
This is a little harder than shopping for buyer's agents, so congress critters might not be able to do it. But it's nowhere near as tough as high school algebra, so even if you're a politician you can just get...
The California Mortgage Loan Disclosure Statement (MLDS) Part I
California has just replaced the one page federal Good Faith Estimate with a two page Mortgage Loan Disclosure Statement. Regulations for filling it out are similar to the federal Good Faith Estimate, especially as the only thing a recent seminar...
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...
Negative Amortization: Never the Best Option, but Sometimes the Least Bad
Looking for advise on Neg. Am. loans. I live in DELETED and I recently went into an office with a buddy asking about a refi and cash out loan on my existing homes in order to help with cash...
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...
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