Truth: In the late 90’s lending industry, you can only negotiate loans in the rare case where a seller Carries Back a First, or you find one of the few remaining Portfolio lenders who can tailor their Loan Programs.

Ninety-five percent of the loans that are available are offered by huge, national lending institutions catering to the Secondary Market. A skilled Loan Advisor will help you find the Loan Program that best fits your needs, but he or she can no more change significant Terms of that loan than a car salesman can redesign a car. 

To give you the illusion of negotiation, many lenders currently allow you to lower your Rate by paying more in upfront Fees. Your Loan Advisor should also suggest numerous ways to help you Qualify for a higher Loan Amount, if you want. 

You have to oversee this process carefully, but the primary skill you need to hone is hunting, not negotiating. Once you’ve worked out what kind of loan you want, you need to hunt down the best Loan Advisor and Loan Program.

Bagging the best loan for your home Purchase or Refinance can save you many thousands of dollars. This book will arm you with the weapons that you need. 

Myth #2—Friends and Partners
Myth: The Loan Advisor is your friend. 

Truth: Even if you’ve been buddies with this man or woman for years, the Loan Advisor always gets paid by the lender. And, 99% of the time, he or she is paid by commission. 

He or she won’t get paid, however, if you don’t find the loan you want. The Loan Advisor therefore becomes a hunting partner. Unfortunately, this partner is tethered to his or her company. If that company doesn’t offer the loan you need (and even the biggest Mortgage Brokers don’t work with all Loan Programs), he or she has to convince you to change your goals...or you have to get a new hunting partner. 

Don’t misunderstand us. The Loan Advisor is crucial to your hunt. Good ones are like good stock brokers. They not only help you ferret out good Loan Programs, they provide time saving and important help every step of the way. And they like helping you. But they still always get paid by the lender. 

Myth #3—Purchases
Myth: The sequence of events is: 1. Find a house. 2. Negotiate the price. 3. Find a loan. 

Truth: The reverse—decide on a loan with a monthly payment that works for your budget, then go looking for a home in the price range that matches your financing. 

Going at it this way saves time, particularly when you get the lender to give you a Pre-Approval commitment. The strategy not only gives you peace of mind, it provides a good negotiating tool with a seller, because your offer includes the ability to close quickly. 

 Tip: Get a lender to Pre-Approve you, not just Pre-Qualify you. Have them review your written Application and give you the approximate amount they’ll finance in writing. 

Don’t settle for just a quick telephone Pre-Qualification. You don’t want unexpected problems coming up when you go back to the lender ready to take out your loan. 

 Trap: Regardless of a written Pre-Approval, you still must make your Purchase offer contingent upon getting your mortgage. Otherwise, rising interest Rates, a low Appraisal or an unethical lender can leave you without your loan... and a seller who can sue you for breach of contract.

Myth #4—Refinance
Myth: Timing for a Refi is up to you. 

Truth: We’re great believers in the concept (not exactly a myth) that a Refinance should offer the blessings of time and focus. 

Alas, the truth for us has been that nine times out of ten, we’ve been Refinancing under the gun of a Second coming due, the need for cash for some other reason, or—our most stressful loan hunt experience—an Interest Rate market that’s started moving up. 

Try to do as we say do, not as we’ve done. Note the past tense—we’re hoping to better our practices, too. 

If you’ve gone into your existing loan knowing you’ll want to Refi within several years for whatever reason, keep an eye on the Rate Sheets that appear regularly in newspaper real estate sections or on the Internet (see the National Money$ource Directory in the Appendix). 

 Tip: If you’ve got a deadline for a Refi, start the loan hunt a good 18 months ahead of time. If Rates start going down, start serious interviewing. Most loans don’t have a Prepay Penalty, but you’re looking at big problems if you don’t complete your Refi by your deadline.

 Trap: Lenders hate being caught with a Rate Lock when Rates start going up again significantly. If your Application is being processed at such a time, look out for the lender’s Qualification Ratios changing and/or the Appraisal coming in too low to give you the Loan Amount you need. This is another time when you need to have at least a Double App, so you can try to make the loan elsewhere. Unfortunately, our experience has been that all lenders are reluctant to Fund when the market is moving up.

 Tip: If you’re fairly certain the Rate market’s bottomed, and there’s any way you can meet the revised lender Ratios or Appraisal, we recommend going for it. That’s how we got a 5.75% Fixed in the 90’s. Of course, coming up with an additional $20,000 to Close wasn’t pleasant.

Myth #5—Home Equity, Reverse Mortgages, etc.
Myth: These loans will save you money. 

Truth: Despite the friendly tone and the informal language of the offers that clog your mailbox, both real and virtual, most are as nefarious as the credit card “checks”that offer such wonderful ease of use...and humongous cash advance charges plus the highest rate the company issues.
There are a few good, alternative Loan Programs out there, however. Finding and evaluating them is one of the important missions of this book.

Insider Information YOU should know:
Financial pundits often intone that your home will be the largest single purchase in your lifetime. This is not true. Hidden behind all the discussions about the complexities of buying a home is a little known fact: 

Your mortgage interest paid over the next 30 years will cost you, at a 7.5% interest Rate, one-and-a-half times the purchase price of your home. If Rates bounce up to 12% or worse, as they did for extended periods in the 80’s, the interest you’re paying will run you nearly three times the purchase price of your home! 

Whoa there! This mortgage hunt stuff means serious money! Although readers may quickly point out that we haven’t taken into account the influence of inflation and the future value of money, we haven’t taken into account the way an Amortization Schedule weighs time in favor of the lender, either. 

At 12%, a $100,000 loan wracks up $62,000 in payments over the first five years. The lender receives $59,000+ of that as interest. And that’s before we add in the upfront Closing Fees. 

Not only is this serious money for you as an individual, mortgage lending is big business. Home mortgage debt in the U.S. currently stands at slightly more than a trillion dollars. Essentially, you’re girding yourself up to go hunting in one of the biggest public money markets in the world. 

It may be axiomatic, but it’s wise to remember as you embark—lenders are in the money business because they like selling money. They spend their time and energy figuring out Loan Programs the way Detroit works away on aerodynamics. They delight in bringing out new models every year with fancy trim and a blinding selection of new colors and new names, to entice new homebuyers and seduce the Refi-inclined. 

Since Adjustable were introduced two decades ago, your monthly payment has been only one of several variables that can make a the difference between your best deal and your worst nightmare. It’s no fluke that the fancier the Loan Program, in terms of Teaser Rates and high Loan to Value, the more it’s going to cost you later. 

Besides the complex array of Loan Program choices, there are numerous myths that obscure the most effective ways to hunt:

Steiners How To Talk Mortgage Talk
is the insider's book you need before---
Buying a home
Planning to refinance your high interest loan
Evaluating home equity line of credit offers
Being tempted by a reverse mortgage
Worrying if your current mortgage payments have been miscalculated
Wanting your lender to stop assessing PMI and real estate tax impound charges
AND if you're
Not thrilled about the prospect of sitting around financially naked,
with a Loan Advisor whose financial knowhow
can tie you and your pocketbook in knots
for more than a quarter of a century.

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