MortgagesUndressed

Buckwheats Magnificent 7 nominated article:The 10 Commandments for mortgage applicants really got me thinking. (as did all of the others of course). The number of people who have gone out and bought a car, time share, or a boat just before coming into a loan application has been more than I would have imagined.

Buckwheat said: “The following is a list of things that I see most often as a Loan Officer, that derail the process of getting approved for a mortgage loan.”

6. Tell your loan officer in advance if you plan on making a large purchase.

However he does say -

10. Do have fun.

For the guy who has to have his boat without waiting: I offer the solution - A starter boat.

This post is inspired by my searching blogs tonight. Two I found this evening disclose Daddy and Mommy co-signed for the mortgage.

Thus the title: It Is Time To Grow Up Part 2: Part one was written last week.

Having parents as real partners I don’t oppose, share the risk and investment share the rewards. But co-signing no. Co signing means you don’t qualify without. This isn’t a car you are buying, it is a home.

If you don’t qualify please don’t put your parents at risk. I have seen too many co-signers not have the guts to say they didn’t make the payments on time and damaged the co-signers credit.

If you don’t qualify, don’t buy. Grow up, it is time. Hold your horses and buy when you can do it on your own. Lar

Christine picked up on our theme of yesterday with an excellent article. Please click and read. Lar

I do believe bad credit borrowers and buyers have lost almost all other options if they want to finance a home.

I have spent a lot of time pondering the current state of affairs caused by the sub prime implosion. I believe good credit is a matter of maturity. Some of us mature at an earlier age than others. However, the 0 down loans for credit scores as low as 580 helped many immature people purchase a home. As a realtor and owner of a mortgage company I should like the liberal avenues. I don’t, at least I didn’t.

I believe any 580 credit score can climb 100 points in a year with hard work and disclipine. Those two words don’t correspond with maturity do they? I built my pre mortgage company ownership career persuading people with poor credit to take one year and clean their lives up. I don’t know who felt the greater joy, me or them, when I would get calls saying “We did it, we are ready.”

FHA loans were and should be the recovery loan from bad times. They forgive problems one time. If you can clear up your collections and judgements, and have one year of good credit with no bad credit you can get a great rate. That is where it used to be for those who had probllems, and that is going to be the answer in the future.

So if you want a home and don’t own one, and if you have bad credit, you should cheer the sub prime implosion, for it is in your best interest that instead of satisfying your hunger by allowing bad credit, you be forced to grow up. To own a home now, you must. Larry Cragun…. Sorry for the undressing, call it tough love from the ole man.

That is the way it is with home financing. What it looks like may not be as safe as it seems.

Why do I harp on this so? In the hopes that you will take serious my efforts to get you to be careful.

The trend is taking out equity through refinancing. Of course that is good for mortgage companies like ours, however, for a moment I will preach.

My wife says be careful here Larry, as we have done what I will now preach against. The situation you may be in may be devastating to you. You think, “if you can only pull out some equity you will be fine.”

You may be worse off is the case I ask you to consider. Especially if you refi into a loan with a prepayment penalty.

As I write this article my mind goes back to the two years I bought foreclosures. I was amazed at the situation people were in. I purchased one home on acerage for $200.00 as the owners were pulling out of the driveway never to return. We sold it 4 months later for a $30,000 profit. I can tell you of many other similar stories.

What amazed me was how unnecessary this was. The husband in the story above was a sophisticated real estate person. He had a large business at one time. Later I found him back selling real estate. He was no dummy.

However, he was crushed. The common denominator. The pressue of the bill collectors, the problems, the overwhelming situation caused him to walk away.

This didn’t happen in a day or a week. It happened with one bad decision after another. It happened because of pride. It happened because of lack of being real.

What I would rather see, than having more business of this kind, is to have people move down in value rather than lose their homes. Take the equity into something you can afford. Of course the reasons you snub this idea are legit:Kids changing schools, the hassle, and the dream of recovering.

You gamble your home coupled with the loss of your equity if not careful. I just remembered an attorney that did this, a client from long ago. Except he did it 3 times and out. He got himself into a business problem. He refused to give up. He refinaced 3 times. He ruined his credit. The fees to refiance plus the prepayment penalties ate his lunch and his equity.

Sometimes it works out fine. It just troubles me I see so much of it already. Larry Cragun, your friend.

I post the email for two reasons: First, we will only promote, if and when we allow advertising on this site, businesses that add to the mortgage community. By add, I mean a valuable service.

Pay days loans are your friendly loan shark. The fees and interest they charge are in the absurb category. They may seem small in dollar amount but in percent they are serious.

Second: If you are in the space where you need a loan until your next check, you are not ready to get a mortgage or a new home. For you I want you to start dreaming. Visit this site daily. Look at a year or two as not far away. Start taking action that solves your problem.

Notice I said take action. This places the burden on you. You can do it. Do It.

Now for the email:

Dear Sir/Madam,
After
visitinghttp://mortgagesundressed.com ,our company

would be interested in an advertisement on your site.

We provide consumers a safe and easy way to apply for

payday loans online. Our advertisement format is

generally 15 words long and it will contain two to three text

links, which we provide. Please let us know how much your site

would charge for an ad of this size. We look forward to your reply

and the opportunity to work with you.

Thank you,

And Don’t

Quit your job.

Buy a car.

File for divorce.

Move money from one account to another.

Neglect to pay your current mortgage payment.

Co sign for someone elses loan.

and Never, never, never
Cheer for the Yankees.

Think about it. Would you loan someone with your credit, job, attitude $300,000 to buy a home? Billions each day are provided folks just like you and me for just this purpose. Amazing isn’t it? Perhaps we should be a little grateful and a lot honest about our system and to our system.

Perhaps the morality of telling the truth on loan applications needs to be appreciated more by us.

Larry Cragun

Q: If I buy a second home and move into it, and rent the old home, would that be fraud too?

A: Probably not. You would want to consider how long you had the first home’s mortgage and what you told that lender. It is your intent in that loan that will be important. Usually, if you had that mortgage 6 months, your intent to live in it as your primary residence would be probable.

Good Question.

Lar

      
No comments