I recently closed a mortgage loan. The loan officer told me there would be no prepayment penalty. When the documents came there was none and the loan funded and closed. Two weeks later I got an e-mail stating some documents had been missed and we need to sign and return them. They contained a new …
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“All Mortgage Money Comes From The Same Place”
This sentence is a textbook illustration of the most effective way to lie. Tell the truth, but not all of it. Not that I’m trying to coach habitual liars, but I am going to deconstruct this astoundingly dishonest claim that I keep encountering. It’s mostly used by less ethical loan officers trying to persuade someone …
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Issues with Family Transfers of Real Estate
We live in (A California city). In a 2 bedroom 1 bath home on approximately a 20,000 Sq. ft. lot. It is easily worth 500K to 600K with a current mortgage of $116,000. The mortgage/Title is in the name of my father and his wife 90% and myself and my wife with a 10% interest. …
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Investing Exclusively in Real Estate?
Is there any problems with having all your money in only real estate? That was a question I saw. The answer is YES there are problems! 1) No diversification. The real estate market tanks, like it has right now (originally written 2006), and you are hosed. The more so because of the leverage attaching to …
How Loan Providers Make Money
In an attempt to debunk some of the slanders that are floating around out there, this article is an itemization of how lenders and brokers make money on loans. The first method is obvious: Origination or discount points charged to the consumer. This is money that the person getting the loan is paying, or someone …
First Time Buyer Programs: The Mortgage Credit Certificate (MCC)
This is a nationwide program for first time home buyers that helps them qualify for the loan by saving them even more money on their tax bill. With that said, however, the state of California accounts for more than 50 percent of all MCC Certificates. Each individual area has its own administrator. Within the County …
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Fear and Greed, or How Did The Housing Bubble Get So Big?
(This was originally written February 16, 2006, but it’s relevant still) 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 those still in denial about it, how prices jumped so far so fast). This has to do with several …
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Disability Insurance Considerations
I have a confession to make: When I was doing financial planning, I didn’t put enough emphasis on Disability Income Insurance. I was hardly alone in this; Disability Insurance is one of the two most undersold financial products there is. The other is Long Term Care Insurance, which product I at least researched properly and …
Paying Off Old Past Due Bills Without Hurting Your Credit
People sometimes ask how they can improve their credit if they have old collections on their credit record. Well, the answer is NOT to simply pay them. Paying off a five year old collection can cause your credit score to drop by 100 points. You say that makes no sense? Well, here’s the logic of …
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Why the Current State of New Developer Housing
I’ve seen many new home developments with vaulted ceilings, mini-vineyards, huge houses on little tiny lots…Why can’t some developer built some homes for us regular people?A normal sized home with plenty of closet space and a decent (not designer) kitchen that is set more than 3 feet from the neighbors house.I realize that they need …
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