Interview with Dale Mayer the
author of The Home Mortgage Book
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Please tell my visitors and I about your book, "The Home
Mortgage Book"? What inspired you to write it?
Deciding to write the book wasn't hard. The mortgage industry
has always had mysterious unknown element to it that makes it
an incredibly scary process for people - and it doesn't need to
be. Information is knowledge and knowledge is power. The more
people know about getting a mortgage, whether it is their first
or their fifth, the better choices they can make.
If a consumer has bad credit, what should he/she do to get
their mortgage?
Bad credit can happen to anyone and be from any number of causes.
There are however options available for someone in this situation
to get a mortgage - it depends on how recent and how severe the
financials problems are. Getting a mortgage isn't solely dependent
on your credit. The amount of cash you have available to invest,
the income you currently enjoy are also taken into account as
well as your payment history. There are bad credit mortgages available,
however be very careful who you obtain one from. Be sure to get
references are there are many disreputable subprime lenders out
there. You also have the better option of cleaning up your credit
before trying to get a mortgage. If you do try for a mortgage,
be aware that you'll pay a higher interest rate than other people
as lenders will look at you as a higher risk.
However, each case is different, and seeing a professional is
always a good idea before getting into a situation that may put
you in over your head. When going to speak with a broker for example
it's very important to be honest about your credit history. They
can help you but only if they have the information they need.
If a consumer has bad credit and wants to save money on their
mortgage, what should he/she do?
There are several options for people with bad credit. The first
is to improve their credit so that you are eligible for a better
interest rate. The second option, which is faster if you are lucky
enough to know someone, is to have a co-signer with a solid credit
rating of their own. This means the mortgage is based on the co-signer's
credit rating but also means if you can't make your payments then
they are liable. Talk to your broker and see what the best deal
you can get. Make sure the broker shops around for you. There
are always options.
Also be aware that mistakes can happen with your credit score
- and can cost you thousands of dollars extra on your mortgage.
Be sure to see your credit history yourself. You can request reports
from any major credit company. When you get them, go over them
carefully. If there any errors, then contact the company and have
your record corrected.
Do you believe the new rules and restrictions put in place
by this current administration are going to help or hurt the consumer?
Do you believe there is too much govt. oversight?
This is the age old question of 'to regulate or not to regulate.'
There is no good answer in our current economic times. I don't
like government regulations intruding into every area of our lives,
but we saw what happened when the banking and Wall Street world
were allowed to do what they wanted. If people were looking to
do their jobs better and not lining their pockets, maybe we could
keep the government out of it. However regulation and bailouts
have stuck the American consumers with a trillion dollar bill
so where's the happy ending for anyone?
How do you feel about the new banking regulations?
I'm more of a 'wait and see how things are going to work then
adjust as need be' type of person. It's the old system that got
us into so much trouble that it's hard not to view the changes
as a step in the right direction. Having banks self regulate didn't
work, so regulating them now seems to be the only sensible option.
The new regulations are aimed at two major issues - the first
at preventing a second meltdown in the banking system and the
second at protecting the consumer. The mess we've seen over the
last couple of years has demonstrated the need to do something.
These changes should add stability to the banking system and help
to protect the consumer. That doesn't mean the consumer is going
to appreciate it. While loans were being handed out prior to the
recession in a willy nilly fashion, doesn't mean they should have
been. Just because you qualify for a half million dollar mortgage
doesn't mean you should buy it. Restraint and practicality have
to mirror commonsense. Our economic situation is still in flux.
Only carry what debt you can afford to carry.
When getting a mortgage for the first time, what are some
basic questions a consumer should ask the bank/finance company?
" Ask for the credentials of the broker to make sure they
are licensed and reputable
" Ask about other fees associated with the loan - if your
APR is 75 to 1 percentage points higher than the interest rate
you were quoted, there are significant fees being added in and
you need to know about them.
" Ask if the interest rate is the best that they can offer
given your credit rating.
" Be sure to find out if the rate if variable or fixed. And
how long is it being locked down and get this in writing.
" Get all the details on your loan including the principle
balance of the loan, when the payments are due, if there is a
grace period and how much as well as the length of the loan. Be
sure to know if you have a balloon payment due at the end of the
loan.
" Be sure to know how much the broker is getting paid to
close this mortgage and be sure to ask for a closing estimate
one day in advance of your closing.
" Does the monthly payment include escrow for property taxes
or home insurance?
" Is there a penalty if I pay of the mortgage early? If so,
be sure to find out how much it is.
" Be sure to ask who your lender would be and ask what the
chances are of your mortgage being sold down the road.
Where do you see the mortgage industry ten years from now,
do you see a highly regulated industry that's over protected with
rules and regulations or do you see an industry that will be growing
and thriving as the years pass on?
I think the industry is in a state of flux and adaptation. I hope
we've seen the worst dip and can look forward to a recovering
market but the rules and regulations are going to tighten then
loosen as the economy stabilizes. As the market grows and thrives
- which it will eventually, the rules and regulations will adapt
with it - hopefully not strangling us with all the rules in the
meantime.
Thank you Dale.
-Shane from Buy
Here Pay Here Car Lots
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