Mortgage Management For Dummies

Quickly make sense of mortgages

Taking out a mortgage to purchase real estate is a huge decision, one that could affect your family's finances for years to come. This easy-to-follow guide explains how to secure the best and lowest-cost mortgage for your unique situation. Whether you select a 15- or 30-year mortgage, you'll get all the tips and tricks you need to pay it off faster--shortening your payment schedule and saving your hard-earned cash.

• Fine-tune your finances

• Qualify for a mortgage

• Secure the best loan

• Find your best lender

• Refinance your mortgage

• Pay down your loan quicker

• Must-knows about foreclosure

• Top mortgage no-nos

Auteur

Eric Tyson, MBA, is a financial counselor and the bestselling author of Investing For Dummies, Personal Finance For Dummies, and Home Buying Kit For Dummies.

Robert S. Griswold, MSBA, is a successful real estate investor, hands-on property manager, and the author of Property Management Kit For Dummies.

Résumé

Quickly make sense of mortgages

Taking out a mortgage to purchase real estate is a huge decision, one that could affect your family's finances for years to come. This easy-to-follow guide explains how to secure the best and lowest-cost mortgage for your unique situation. Whether you select a 15- or 30-year mortgage, you'll get all the tips and tricks you need to pay it off fastershortening your payment schedule and saving your hard-earned cash.

• Fine-tune your finances
• Qualify for a mortgage
• Secure the best loan
• Find your best lender
• Refinance your mortgage
• Pay down your loan quicker
• Must-knows about foreclosure
• Top mortgage no-nos

Contenu

Introduction 1

How This Book is Different 1

Foolish Assumptions 2

Icons Used in This Book 3

Beyond the Book 3

Where to Go from Here 3

Part 1: Getting Started with Mortgages 5

Chapter 1: Determining Your Borrowing Power 7

Only You Can Determine the Mortgage Debt You Can Afford 8

Acknowledge your need to save 8

Collect your spending data 9

Determine Your Potential Homeownership Expenses 10

Making your mortgage payments 10

Paying property taxes 12

Tracking your tax write-offs 13

Investing in insurance 14

Budgeting for closing costs 14

Managing maintenance costs 17

Financing home improvements and such 17

Consider the Impact of a New House on Your Financial Future 17

Acting upon your spending analysis 21

Establishing financial goals 22

Making down-payment decisions 23

Chapter 2: Qualifying for a Mortgage 25

Getting Preapproved for a Loan 25

The worst-case scenario 26

Loan prequalification usually isn't good enough 26

Loan preapproval is the way to go 27

Evaluating Your Creditworthiness: The Underwriting Process 28

Traditional underwriting guidelines 29

New underwriting technology 32

Eyeing Predicament-Solving Strategies 34

Insufficient cash for a down payment 34

Excessive indebtedness 38

Insufficient income 39

Credit blemishes 40

Low appraisals 41

Problem properties 45

Chapter 3: Scoping Out Your Credit Score 47

Defining Credit Scores 48

Assessing Your Credit History 48

What goes into your credit report 49

Check your credit report 50

Understanding How Scores Work 51

FICO scores can differ between bureaus 51

What a FICO score considers 52

What FICO scores ignore 60

Interpreting scores 61

Getting your score 61

Managing your score 62

Part 2: Locating a Loan 63

Chapter 4: Fathoming the Fundamentals 65

Grasping Loan Basics: Principal, Interest, Term, and Amortization 66

Deciphering Mortgage Lingo 67

So what's a mortgage? 67

How to scrutinize security instruments 68

Eyeing Classic Mortgage Jargon Duets 70

Fixed or adjustable loans 70

Government or conventional loans 71

Primary or secondary mortgage market 72

Conforming or jumbo loans 74

Long-term or short-term mortgages 75

Introducing the Punitive Ps 76

Prepayment penalties 76

Private mortgage insurance (PMI) 78

Chapter 5: Selecting the Best Home Purchase Loan 81

Three Questions to Help You Pick the Right Mortgage 82

How long do you plan to keep your mortgage? 82

How much financial risk can you accept? 83

How much money do you need? 84

Fixed-Rate Mortgages: No Surprises 85

Adjustable-Rate Mortgages (ARMs) 87

How an ARM's interest rate is determined 88

How often does the interest rate adjust? 92

What are the limits on rate adjustments? 92

Does the loan have negative amortization? 93

Fine-Tuning Your Thought Process 96

Finding funds 96

Making the 30-year versus 15-year mortgage decision 97

Getting a Loan When Rates Are High 98

Chapter 6: Surveying Special Situation Loans 99

Understanding Home Equity Loans 100

Using home equity loans 100

Operating instructions 101

Considering tax consequences 103 Eyeing 100 Percent Home Equity Loans 104<...