I THOUGHT about writing this issue to close out this 2011 because I strongly believe that a lot of us are in this financial mess because we trusted someone that either lied to us or maybe cheated us out of the truth. I understand everyone has to rely on others in this world because there is no way for us to know everything that is going on around us. I will be honest, even myself I do pay more sometime for things that I might not be familiar with, because I might not have time or are being lazy to do the research, I then assume to pay slightly higher for services that I know I might be able to get cheaper sometimes. Here in America I have always said this is a very sales and service oriented economy, everything we do or buy you will somehow come across dealing with a sales person or need some kind of a service from that person. Therefore, how do we know whom to trust, how do we know how to shop around for the cheapest service or best retail prices?
This come to my point in the article about our mortgages, I have been doing Real Estate Financing and Sales for going on 25 years, believe me I still talk to very educated home buyers some times not understanding a lot of their loan features, sometimes even their own loan programs. The government has changed how we disclose our Truth In Lending Statements and Good Faith Estimates to clearly state the terms of the loan on each and every loan application and final closing papers. Just by knowing where to look for that one section of your mortgage estimates would actually shed a lot of transparency towards your understand of loan programs. I am not suggesting for you to read a ton of books about home loans or home buying but I want you all to understand the basics of home buying and home mortgages. With that you should be able to ask the basics terms of conditions of your home buying. A good tip also would be calling a few sales people and analyzing what they are asking you and how they approach trying to get your business. By now even if my business is all referral I would still strongly if you get a family member referral or a friend referrals to please go thru the process of your questioning and interviewing. Please do not use the “Bahala Na System” where we are all so accustomed. You are dealing with thousands of your hard earned money here why just rely of someone you just met even if they are referred.
Do not be shy about asking fees, most of ask if you notice don’t even as people what they charge until they get their bills, that is the first thing that you should ask after all the other questions you might have. Remember if you are clear of everything in a transaction you will see thru it with a lot less stress and probably save more money in the long term.
Now lets talk about probably what everyone wants to know in regards to loan modifications. Very important, “LENDERS ARE STILL NOT REDUCING LOAN BALANCES”. So, here we go again since I started writing about these Loan Mod articles, I have only recently seen loan balance put on the back end of a mortgage not reduced. The lenders defer a loan balance to your back end of your loan term or in other words do a balloon payment, but only amortize your payments base on the current market value. I think this is good for someone in an area that has a strong potential of property values going back but not in most depressed areas.
I have another suggestions to my readers, I do get calls and people do thank me for my write-ups but I am puzzled because I seem to think that my articles although how valuable and informative maybe is not being followed. Let me give you examples, in the mid 2000’s I suggested for my readers not to buy Las Vegas, Arizona to be very careful about buying in the outskirts of major counties like LA, Orange, San Francisco, San Jose or San Mateo. Around those years I also suggested people not to buy homes with zero down payment and for sure not to get those 1% Teaser loans or “pick a payment” loans. But guess what there is a stronger force out there that is convincing my readers otherwise. I can swear to you to that I still remember at least a dozen homebuyers approaching me wanting me to help them get a loan with no money down pay back in the 06-07’s. But I told them I cannot help them finance those homes, one that is particularly very memorable to me was a couple wanting to buy a $800K in the Santa Clara Area as a second home with no money down pay. After reviewing all their finances and bank statements I told them they would have a hard time paying the home later and that I cannot help her, she actually get really upset and wrote me a nasty letter and got financing some where else. Trust me, I could have made a good commission for that size loan balance but I never see it that way. Obviously they don’t call me now but I did some following up on their property and it’s worth less than half now and they foreclosed in 2010.
I am not saying I am the best but I deserve the write to make these personal comments because I have been thru these Real Estate Cycles twice and remember numbers don’t lie. So hopefully we will be smarter going into 2012 and on when it comes to buying, getting home mortgages and investing in homes.
Have a Great New Years everyone, I am always here for your inquiries and suggestions.
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Please call Ken of 1st Innovative Finance at 562-508-7048 or write to This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Thanks Again.
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