Questions you must ask when interviewing a mortgage lender

This report is for people who are looking to refinance but are confused by all the different type of mortgage loans that are available. Most importantly, it is for people who don't know who to trust. This industry is full of people who would like nothing more then strip you of your equity and give you a high rate with unnecessary fees. This report will prevent that from happening to you!

Why am I willing to share this free report? I believe in educating a client about all your choices. That means the positive and negative aspects of each loan program and loan type. The reason we are in business is to help people achieve there financial goals, either by purchasing a home of their own or improving their financial situation of their current home. Either way, this information should be a benefit to you. You will learn who the predatory lenders are, what they would like to do to you and how to avoid this.

Instead of me telling you how great I am and my company is, I'd rather spend your time reading the attached report. It has been my experience that many banks, mortgage companies, credit unions, real estate agents and builders will avoid these topics.

Our goal is to educate you as much as possible. We originate loans by educating the borrower and allowing them to make an educated decision on what loan best fits their needs.

I realize that this is a lot of information so I want to encourage you to ask questions, if you don't understand what I have written here , please feel free to call my office and ask . Please take a look at what I can offer you;

A FREE CONSULTATION TO FIND OUT WHAT TYPE OF LOAN IS BEST FOR YOU.

This is a free service and is given to at no cost or obligation. The consultations take about 10 minutes. I can't promise I can help everyone, but once we review your situation, we can instantly give you an answer or tell you what you need to do.

Congratulations on taking the first step toward becoming the most educated mortgage loan customer you can be! P.S. if you are ready to talk with me call me at 516-393- 7980 would be happy to speak to you and help you, if you miss me leave your name and number and ill return all calls as swiftly as possible .

10 QUESTIONS YOU MUST ASK WHEN INTERVIEWING A MORTGAGE LENDER

Mortgage regulations have changed significantly over the last few years, making your options wider than ever. Subtle changes in the way you approach mortgage shopping, and even small differences in the way you structure your mortgage, can cost or save you literally thousands and years of needless interest payments. GET THE RIGHT INFORMATION - Whether you are about to refinance, buy your first home, it is critical that you be informed about the factors involved.

Everyday people turn to a mortgage lender to help them get a mortgage, but because many of them don't know what questions, if any, to ask, they often make correct incorrect choices. By taking these few minutes to acquaint yourself with the

10 QUESTIONS YOU MUST ASK WHEN INTERVIEWING A MORTGAGE LENDER

You can reduce or eliminate the chances of making a critical error and save thousands on your mortgage.

1) WHAT IS THE INTEREST RATE AND THE ANNUAL PERCENTAGE RATE (APR) OF THE LOAN?

Find out what the interest rate will be on the loan, as well as, the annual percentage rate (APR). The APR is a combination of the interest rate, points and other charges divided by the loans term to give annualized rate. It is the best way to properly compare loan costs.

2) HOW MANY POINTS WILL BE CHARGED?

A point is one percent of the loan amount. Points charged are additional to the interest rate that is charged to the loan. A loan with a high interest rate and low points may cost you thousands more than one with a lower interest rate but more points. This is important because the number of points charged varies from lender to lender.

3) WHAT WILL BE THE TOTAL CLOSING COST FEES CHARGED?

Lenders charge fees for the services incurred to process and close your mortgage. By law, closing costs must be disclosed with in 3 days of the loan application; however, there are different approaches to calculating them. Some brokers will initially disclose closing cost figures which are very appealing, only to provide much higher costs as your closing date approaches.

4) IS THERE A "LOCK-IN" POLICY? Is there an additional charge to lock- in an interest rate and discount points?

Many lenders offer a lock-in policy that guarantees you a certain interest rate and points for a specified number of days. The alternative to this is accepting the prevailing rate and points on closing day. Since rates can change daily, the one time lock-in fee may be able to save you thousands.

5) HOW LONG DOES IT TAKE TO PROCESS MY MORTGAGE?

Processing is the means by which your loan is prepared for underwriting, or approval. The time it takes to process a loan varies by the type of loan and even among lenders. Loans can usually be funded in 7 to 10 days. If time is of the essence, a lender with quick processing, underwriting and funding capabilities can prove to be a valuable asset.

6) DO YOU OFFER A GUARANTEE IN WRITING?

When you give a mortgage loan application to a lender, Federal law requires the mortgage company to disclose to you a good faith estimate (GFE) of closing costs with in 3 business days. Many of these GFE s can be far from "good faith" and can sometimes be thousands off from what you actually wind up paying and you know what? They get away with it because it's only an estimate. You must get guarantee in writing to prevent this from happening to you!

7) WILL I GET COPIES OF THE LOAN DISCLOSURES? HOW WILL I GET THEM? AND ...WHEN WILL I GET THEM?

This is a quick way to get rid of those nasty predatory lenders .Too many loan officers will refuse to send you paperwork! They will tell you what the payment is, grab your appraisal money and tell you that you will see it all at closing. They re hoping by that time that you will be so far along that you will just keep going and take the loan!! You know what?? Most of that time that s what people do!! It doesn't matter that they aren't getting the money they wanted or that the rate is a 1/2 point harder than agreed to or that it's an adjustable rate not a fixed rate!! FIND OUT FIRST what loan you are going to get!! IT'S THE LAW!! They have to disclose to you with at least an application, GFE and a Fee Agreement. They have to either hand it to you or mail it to you. They should also be asking you to review them, sign them and either hand them back to them or mail them back. In addition, the lender should give you a copy for your records. If they aren't doing this - RUN FOR THE HILLS!!!!

8) IS THERE A PRE-PAYMENT PENALTY?

Normally you can prepare a loan without penalty if you notify the lender in writing that you are either selling or refinancing. There are, however, exceptions. You can have a one year, two year and even a five year pre-payment penalty. Make sure to ask about this, and have it configured for your unique situation.

9) DO I HAVE ANY UP -FRONT COSTS?

Mortgage lenders are allowed to collect fees up front. AND..... many actually do. They can charge an application fee, processing fee, appraisal fee and a credit report fee. It is common industry practice to have the borrower to pay for there appraisal and be paid direct to the appraiser other than that, all fees should be included in the loan an not paid up-front

10) HOW MANY YEARS EXPERIENCE DO YOU HAVE?

This is probably the most valuable asset you own and you need to make sure you have someone with experience handling this transaction. With the recent refinance boom this industry has been flooded with people trying to make a fast buck. The "professional" you have working on your application may have been selling shoes last week!!

SIX THINGS YOUR LENDER DOESN'T WANT YOU TO KNOW.

THE FACTS ABOUT "NO-COST" LOANS

The greatest truth I can possibly tell you is something you already know;

"THERE IS NO FREE LUNCH"

Burn that into your brain. No one can work for nothing. You can't afford to go to work and not get paid. Neither can a loan officer or mortgage company possibly afford to do a mortgage loan for nothing. The loan officer can't feed their kids and the mortgage company can't stay in business. You can believe that mortgage companies do loans for no-profit just about as much as you can believe car dealers sell their cars "at or below factory invoice." Even if the loan officer and the company were willing to do the loan at a true "no cost", there are other "hard" costs involved in the loan items like; attorney's fees, title search, mortgage taxes recording fees; just to name a few, must be paid by some one.

SO HOW CAN A COMPANY OFFER A" NO COST LOAN"?

About the only way this can be done is through a concept called "above par pricing". Most people have heard of paying "discount points" to buy a rate down. That is, some one (in the old days it was usually a builder), would pay a discount point (a "point" is 1% of the loan amount) to the lender so the buyer/borrower would get a lower rate. You see, mortgages are priced like bonds. There is a "par" price and then there is a discount price and an above par price. So, instead of someone paying discount points to buy a rate down, if a mortgage company receives a premium. This is usually called a "YIELD SPREAD PREMIUM."

In a "NO COST" LOAN, the mortgage company uses the yield spread premium to cover all of the costs of the loan and the mortgage company's profit as well. So does this mean the mortgage company is cheating or ripping - off the consumer?.... No not at all. It all boils down to options.

FOR INSTANCE, ON A PURCHASE THE BORROWER HAS THREE OPTIONS;

a. Pay the closing costs out of pocket -or-

b. Negotiatefor the seller to pay the closing costs. This usually means the purchase price has to be raised -or-

c. Pay as lightly higher interest rate on the loan and have lowercash out of pocket and maybe a lower purchase price on the home, too.

ON A REFINANCE THE BORROWER HAS THREE OPTIONS AS WELL;

a. Pay the closing costs out-of-pocket;

b. "Roll the closing costs into the loan. This simply means that the closing costs are being financed into the loan amount -or-

c. Pay a higher interest rate on the loan and have the bank pay the closing costs for you. In New York due to the limit on fees that can be charged along with all the high costs of doing a mortgage, it is usually very difficult to earn enough yield spread premium to cover all the closing costs and still earn a profit.

Any of these options can be good or bad depending upon the individual borrower's situation. That's why a competent mortgage professional will ask lots of questions before proposing a loan program and providing an interest rate.

ASKING FOR A RATE QUOTE WITHOUT GIVING MORE COMPLETE INFORMATION.

At least two- dozen times a week we have people call us and ask, what's your rate on a 30 yr fixed rate? Most times we try to get additional information from the potential borrower. Unfortunately, for both the caller and us, they don't want to tell us anything.

"I already know what I want, just give me a rate." Is the usual response.

Now, I'm not encouraging you not to shop around fore the best rate.

BUT, ASKING FOR A RATE WITH OUT GIVING MORE INFORMATION IS A BAD IDEA. Why? Because frankly, anybody can give you any rate quote they want to over the phone. There is no way you can hold them to the rate. You see, there are two kinds of mortgage companies out there. Those that look at you as a client for life.

Those companies that want you as a client for life, will take the time to ask for as much information as possible, up - front, so they can not only give you the best rate possible, but they can also quote you the best loan program for your situation.

ADDITIONALLY, FAR TOO MANY PEOPLE THINK THEY ALREADY KNOW WHAT LOAN PROGRAM IS BEST FOR THEM.

You may think you already know what you want, but unless you know all of the options in the marketplace you may miss an opportunity for a better loan program or situation that you didn't know existed.

Let me ask you; have you ever gone into a store to buy a specific product, but came out with something entirely different? If you did, it was probably because you did not know the new product even existed or you didn't see a knowledgeable person in the store that would have given you information to help you information to help you make a better decision.

That's the job of a competent loan officer, to use their years of expertise to help you select the best option for your situation.

PLEASE DON'T ASSUME YOU KNOW WHAT'S BEST FOR YOU.

Now, I'm not saying that you shouldn't make the final decision. After all, it is your money your home and your financial future. However, there is no harm at all letting a competent, well trained professional give you several options, and then you can select which you believe is best for you.

FINDING THE LOWEST INTEREST RATE IS NOT ALWAYS BEST DEAL

Some loans have very attractive interest rates (ALSO KNOWN AS TEASER RATES) but you may be hit with higher up-front charges. Points and or origination fees are the most common ways to lower the rate and up-front costs .When searching for a mortgage, ask the lender if they are charging points or origination fees. Points and origination fees are calculated as a percentage of the loan amount. See example below.

$120,000 MORTGAGE 1 Point=1% of the loan amount $ 1,200 paid at closing 2 Points =2%of the loan amount $ 2,400 paid at closing

Beware of most adjustable rate mortgages (ARM S) and Balloon mortgages.

ARM rates adjust differently depending on the loan program. The ARM rates may adjust as often as every 6 months but in most cases they adjust after 1,2,3, and 5 years. With interest rates at a near historic low, interest rates on ARM S are far more likely to go up when they adjust. The balloon mortgage requires the borrower to pay the loan off when it matures. There are many tactics to sell the borrower on a low rate and then charge outrageous fees and costs. Don't fall into the "bait and switch" lending ploy.

That being said, there are several excellent adjustable rate loans that are perfect for the right situation. We have two loan programs that will allow you four payment options each month, plus, your payment is recalculated each month based on the loan balance so your minimum payment can actually go down each month...

Keep in mind, we don't try to force everyone into the same mold or in this case the same loan program. With over 2,300 loan programs available, we can almost always - custom tailor a loan to fit most clients wants and needs.

GETTING YOUR MORTGAGE LOAN FROM THE INTERNET

As an example there is one well known internet company. You know who they are, You have seen the commercial off a dozen loan officers all dressed alike lined up the stairs, all waiting to court the young couple for there loan. Well, this company is not a mortgage lenders or broker's, they are information brokers .They are in the business of selling your information to "up to four lenders"

You see what happens is that mortgage companies around the country pay a fee to the internet for the right to see your information .The mortgage company reviews your information, and then decides if they want your business. If they do, the mortgage company will respond to your request and send you a quote. Keep in mind three things:

1a) Your personal financial information, credit information and social security floating around the internet, being sent to several companies for anyone in their offices to see.

2a) Whatever rate quote you get is only going to be as good as the information you input on the computer screen. The lenders "approval" is subject to review of all your information.

3a) You receive no personal attention, No warm body to help you, just the cold click of a mouse.

4) LENDERS VS. BROKERS

A Mortgage Lender in theory, is loaning his own money is either a bank or a mortgage company that is a direct affiliate to the bank.

A Mortgage Broker is in the business of placing loans with a wide variety of mortgage lenders. They are not loaning their own money, but they are acting as "brokers" for the wholesale lenders with whom they do business.

An easy way to compare a mortgage broker is to look at the insurance industry. Your neighborhood all state or state farm agent does a great job of offering you their own company's products. If you need something other than their company s products, you need to go to an independent insurance agent who can offer you the products of a number of insurance carriers.

Advantages and disadvantages of a banker;

If you are a major customer of the bank, that is - you have substantial deposits with the bank; you may be able to get a special deal on a mortgage loan only because the bank doesn't want to lose your deposits. Occasionally, a banker may have a loan program unique to them - this may offer you a limited advantage. A disadvantage of the banker is that they only offer their own loan programs, and if your situation does not fall into one of their limited programs, they cannot help you.

A banker has "in-house underwriting". That means the person that actually approves your loan works for the company. This is usually touted as meaning the banker can give you faster service.

Advantages and disadvantages of a broker;

Mortgage brokers do not loan their own money. They search the marketplace to try to find the best combination of loan program and rate to fit an individual borrower's situation. This means that a broker is not limited to just the few programs their own company may offer (like the bank). The broker has the full range of programs available to as many wholesale lenders as they choose to do business with .If one wholesale underwriter doesn't like your loan ; the broker can simply send your loan to another lender for consideration. You are not stuck with only one person's opinion of your loan for example; our head of processing worked for the mortgage division of a large regional bank for over four years. When she couldn't get a loan approved, all she could do is apologize to the borrower and offer to transfer the loan to another company. Now, if she cannot get the loan approved at one lender, she can contact one of over many potential lenders to review the loan file. This gives her a huge advantage over her previous situation.

5) PRE-QUALIFICATION vs. PRE-APPROVAL

Not a single day goes by that we don't have ay least someone call and say something along the lines of "I've already been pre-qualified for the loan XXXX dollars. I'm just checking on rates." Although we are more polite than to say so, in our minds we are thinking, pre-qualified, Big Deal!'" My personal favorite is, "We are looking at houses over the weekend and the real estate agent pre-qualified them us for a loan of $356,000. I realize that there are always exceptions to the rule, but most real estate agents don't know beans about getting someone a mortgage loan.

My point is simply this is a pre-qualification is worthless. Anybody can give you a pre-qualification. It doesn't mean anything; it has no value to you. Why? Because all a pre- qualification means is that someone took the word of a potential borrower regarding their income, debts and credit standing and said based upon what you're telling me, you fit within the parameters of some possible loan program.

You can call five mortgage companies this afternoon and get five pre-qualifications. The problem is trying to get any of these five companies, including ours, to honor that pre-qualification. Since none of the information has been verified there is no way to force any company to honor any pre-qualification.

WHAT YOU WANT..... WHAT YOU NEED IS A PRE-APPROVAL

A pre-approval is based on solid, verified information about your situation, credit income, savings, debt and is based on the specific requirements of a specific loan program. A Pre-approval in the form of a loan commitment is money in the bank.

At least with our company, a loan commitment/pre-approval means that your loan application has been presented to an underwriter or has been submitted to one of a few electronic underwriting systems and has received an approval. With a pre-approval in hand, your ability to negotiate on the purchase price of a home goes way up. Think about it. Your agent has submitted your offer on the home seller take? Assuming all bids are about equal, your agent has presented, along with your contract offer, your written pre-approval for a loan to buy this house. The other bidders didn't.

Whose offer is the seller more likely to take???..... The one with the guaranteed closing or the one that has to wait to get their loan approval. The down side of a pre-approval in order to get one , you have to make a full blown mortgage application with a mortgage company .Nobody, except a complete fool, would provide a potential client with a mortgage loan commitment ( Pre-approval) with out having that potential borrower complete and execute (sign ) a full application and all disclosures; gather basic information and documents; and present the information to someone with the ability and authority to say " Yes " to the loan application.

SO, IN ORDER TO GET A PRE-APPROVAL, YOU ARE GOING TO HAVE TO SELECT A MORTGAGE COMPANY.

SPECIAL NOTES;

Two or three times every week we get a call from someone asking about rates. Usually after speaking with them for just a few minutes, we find out that they already made an application with another company and are "just shopping rates". Well, at that point in the conversation, our policy is to, as politely as possible, disengage from that person.

WE DON'T WANT THEIR BUSINESS.

LET ME STATE THAT WE UNEQUIVOCALLY, WANT YOUR BUSINESS, PERIOD.

We want your friends business, your family, and your co- workers business. We want the business of everyone you know. And we re going to do everything we can, morally and legally, to convince you that you should be doing business with me.

However, we don't want someone else's business.

GOOD FAITH ESTIMATES AND RATE QUOTES: we hear it every day, give me your best rate on a 30 year fixed rate and send me a good faith estimate."

WE POLITELY DECLINE. WHY? Because preparing a good faith estimate for someone who is not seriously considering making a loan a conversation is a waste of our time and the caller s time.

A GOOD FAITH ESTIMATE with - out an application is not worth the paper it's printed on. It's a lot like a Pre-Qualification, it s meaningless. You can t hold us, or anyone else for that matter, to the numbers. And since the mortgage company does n t have complete information about the borrower and their situation, everybody involved knows ahead of time that the numbers cant be right. Plus, interest rates change daily, sometimes more than once in 24 hours. So any rate someone receives today won t be good tomorrow. No one can lock in an interest rate with out an application. Why is it hard to give an accurate estimate of the costs? You see, the actual costs of a $100,000 loan, for, example, are different for an FHA 30 year fixed rate than a conventional 30 year fixed rate, and different for a non-conforming 30 year fixed rate. If that same $100,000 loan is an 80% loan to value refinance, the cost will be different than if is a 100 % purchase.

Loan to value , purchase, rate and term refinance, cash out refinance, with or with out an escrow account , owner occupied , second home , rental property , fully documented income verification , stated income, no income verification borrowers credit, all of these factors effect the interest rate on a loan . In additional to all of the factors above , other things like which closing attorney we have to use , which county the property is located in , what day of the month are we closing , which insurance company is writing the hazard insurance policy; mandatory home owner association dues , and more go into the actual cost of the loan.

There are certain costs that are going to be the same regardless of which mortgage company you select. Mortgage taxes, paid to the State of New York can amount to1.80% of the loan amount. Fees to record the loan documents at the courthouse run generally $350 - $500 depending on the number of documents. Appraisals are usually pretty much the same based on house type.

And don't rely on percentages of the loan amount as a guide to closing costs either. There is no good rule of thumb. For example, the appraisal, credit report, attorney fees, recording fees survey, tax service, flood certification, courier, etc. will be roughly the same dollar amounts on virtually any loan from $ 50,000 to $ 500,000. But as a percentage the numbers change dramatically.

ULTIMATELY, WHAT YOU REALLY WANT TO KNOW ARE FOUR

THINGS: 1) What are the details of loan program? 2) What is the interest rate of the loan? 3) How much cash out of pocket do you need, if any, to close the loan? 4) How does that compare with other companies in the marketplace offering the same or similar loans?

IF YOU TRULY WANT A SOLID, TRUTHFUL ANSWER, BE PREPARED TO GIVE SOME DETAILED INFORMATION.

Yes there loads of companies that will give you a rate quote over the phone and fax a good faith estimate to you with little or no hard information from you.

The good company's, and we believe we are one of those, aren't so desperate for your business that they have to misquote you. They don't hope to bait and switch you with low costs on a good faith estimate today in order to get you in the door only to find some excuse not to give you that deal tomorrow. The good companies are more than willing to disclose the real costs of a loan to a legitimate potential client. But the good companies also don't want to mislead that potential client. They prefer to give a very high level of service to their serious clients. That service starts with a careful and complete analysis of the client's needs and wants, then offering that client detailed information, including all costs and interest rates on a number of possible options to help the client make the best and most informed decision for that client's unique circumstances. Interest rates change on a daily basis. Our goal is to get you the cheapest mortgage loan possible, a loan that will save you monthly as well as having low costs to close.

Whether you want to refinance to lower your interest rate and payments or need cash out for a worthwhile purpose, we can help you. In ALL cases, we will work to get you our best absolute best possible program that comfortably fits your needs.

There will never be any up- front fee until we are confident we can help you. We don't even ask for the appraisal fee until we have you pre-approved, and you agree to the terms of the loan. And, you'll never pay us a dime if we can't get you a loan. We only get paid if we produce. That's why we're on your side. All of our charges are shown on the good faith estimate you will receive at application. Once we have the facts surrounding your situation, we'll know the costs and so will you. There are never any surprises!!! We promise.

THE 6 BIGGEST MISTAKES YOU CAN MAKE WHEN REFINANCING

1. Only hearing what you want to hear

A loan officer tells you over the phone that you are approved and he is giving you a rate of 5.125% with no closing costs!! This is exactly what you wanted to hear. Meanwhile you are told by other loan officers that this sounds fishy. Your friends and family are telling you that it sounds too good to be true. You disregard all the disbelievers and forge ahead. You don't care that you never got any disclosures from the loan officer (even though that's against the law). You don't care that he won't answer your questions directly. All you know he's getting you 5 .125% with no closing costs. Then you go to closing. OH BOY!!!! It's not 5.125 % its 5.625 % and its only fixed for the first 3 years and then it's adjustable!!! On top of that you are paying $ 23,000 in closing costs!!! This brings us to mistake #2

2. Not walking out on a closing when you were lied to

When you get lied to and you see the loan that you actually going to get at the closing are nothing like you were told..... You simply must stand up AND WALK OUT! So what if you paid for appraisal? You're better off losing $300 - $ 500 as opposed to losing tens of thousands of dollars due to a bad loan. You have the legal right to walk out. Even if you do sign the loan documents at the closing, you have 3 business days to rescind the loan and cancel it. NEVER feel obligated to or intimidated by an angry loan officer.

3. Stop paying your bills during the loan process

Many times people figure that since they ask the loan officer they say that of course you can stop paying your bills!! Unfortunately sometimes the process takes longer than expected and now since you stopped paying your bills, the delinquencies are showing up on your credit report which in turn lowers your credit scores and as a result your interest rate has now gone up! AND you can't get the cash you were looking for either because your loan size has been cut. BUT..... Now the creditors are calling your house and you will sign just about anything the loan officer shoves under your nose as long as it stops the creditors from barking at you.

4. Not listening to experts but listening to people who don't know anything

Why in the world would you ask your brother- in- law the butcher about refinancing your home? Because he refinanced his home once.... In 1985? You should be talking to professionals and getting sound advice. Be leery of accountants and lawyers who may steer you towards their own loan officers. Very often there is a financial relationship there that may wind up costing you more in fees or a higher interest rate.

5. Letting the loan officer talk you into committing fraud

Sometimes your loan officer may suggest to you that you lie about your income or job. He may even suggest something that sounds insignificant - like saying that you live in the house when you really live elsewhere. These are all examples of fraud and if you know about it - you are guilty of it. That means you can go to jail!! Fraud is illegal and it is rampant in the mortgage industry. Don't let your loan officer talk you into it. The very least that the lender may do might be to call in your loan. That means they can ask you to pay the loan off in full!! Would you risk all this just to get the best deal possible?? I'm sure you see this all the time in the newspapers. Don't let this happen to you

6. Not doing anything

Sometimes you get so confused by the process and so scared by all these mortgage lenders that you decide to do nothing at all. This, in many cases is the absolute worst thing you can do. Sometimes these precious few days of indecision is all the difference between getting a good deal and getting a bad one. That might be the least of your concerns. Sometimes it can be the difference between keeping and losing your home!!!

THE 8 BIGGEST LIES PREDATORY LENDERS MAKE

1. Don't Let Anyone Else Run Your Credit. It Will Lower Your Score

This lie is very common. The predator will tell you this so you won't go looking anywhere else to get a better deal. He's playing on your fears that if you apply anywhere else you may ruin your chances to get the loan you deserve. The fact is that inquiries have a very small influence on your credit scores. In fact if you are shopping for your mortgage and have had 100 mortgage lenders run your credit in a 2 week period it counts as ONE inquiry. This allows you the opportunity to shop till you drop (in a 2 week period anyway!).

2. I'll Modify Your Adjustable Rate Loan To A Fixed Rate Before It Adjusts. This is one of the biggest fibs a loan officer can tell you. This is what the predator says to you to convince you to take an adjustable rate loan instead of a fixed rate. The rates on adjustable rate loans are much lower and thus provide a much lower monthly payment. When you object to the adjustable rate feature the loan officer will tell you not to worry about it and that the bank will just change to a fixed rate so long as you make your payments on time, OR... he or she will promise to modify the loan for you .In other words he's going to REFINANCE you again before the adjustable rate kicks in. You will have to pay those closing cost.....AGAIN!!!

3. We Should Close Your Loan In 10 Pays

By the time you are ready to refinance or buy your home you are usually pressed for time. It is never wise to rush your decision on who will be handling perhaps the largest transaction of your life. Is it possible to close a loan in 2 weeks? YES! However, the average transaction takes about 3 weeks. Any number of issues can pop up to delay the process. If a loan officer tells you he will close your loan in 10 days without a doubt .... You should choose somebody else. He's just telling you what you want to hear.

4. Your Payment Includes Taxes And Insurance Sometimes the loan payment is so high WITHOUT the taxes and insurance included that the predator will tell you that the payment DOES include the taxes and insurance. He does this to make the loan payment to sound better than it actually is. Unfortunately, you will find out about this at closing or maybe even later when you get a delinquent tax bill from the county clerk!

5. Nobody Else Has This Program And Will be Able To Do This For You I don't know of any bank that is the "only" bank that can do anyone loan. The predator tells you this to keep you from looking for the best deal. There usually is somebody else out there that can do the loan .Beware of anyone who tells you this lie.

6. I Don't Have To Send You Paperwork Even if you are dealing with a broker and the lender they are trying to place you with sends you paperwork .... The broker still has to send you paperwork. The law states that within 3 business days the broker has to send you disclosures including a copy of the application, the good faith estimate (GFE) and the broker fee agreement .A predator usually never sends paperwork or when he does he usually puts down wrong numbers to make the loan look better than it actually is, if he tells you this lie - run for the hills. You should demand that the broker send you the disclosures he is required to by law. Actually! If you don't get them without having to ask you should just NOT do business with that firm.

7. Your Credit Is Bad And That's Why You Are Paying Such A High Rate Sometimes this is the truth but often enough it's a lie. Mortgage lenders make more profit if they give you a higher rate. So you may qualify for a 6.50% rate and the bank will give you a 7.00% rate and make more money. It would be a good idea to look at your credit score letter the mortgage company is required by law to send you. If you have over 700 scores , you have good credit by just about everybody's standards .If you have scores in the 600 s then you may have some problems qualifying for some programs .If you have scores in the 500 s you may have some real problems. If you are below 500 then you might have trouble finding anybody that would do a loan for you at any rate.

8. There Aren't Any Closing Costs

This is a common lie that predators love. The "no closing costs" loans are HELOCS (Home Equity Lines of Credit). And the truth is that there are even closing costs on these loans too. It's just that the bank pays them for you. Again, the theory is that they will tell you what you want to hear and they figure that once you get to the closing table and you find out that there are closing costs, you will just sign the loan anyway. Too often this is exactly what happens.

Thank you for taking the time to read my report it was put together for the purpose of helping people to learn about what perhaps could be the biggest transaction of there life .Hopefully I have made it easier for you to understand the steps in either purchasing or refinancing your mortgage.