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Introduction

The mortgage process is extremely confusing.

Besides the fact that there are lots of terms bandied about that are not used anywhere other than in home loans, there are so darned many people involved in the transaction. And these people have their own vocabulary. If you don't know what they're talking about, you are more susceptible to falling for things like:

Misleading marketing Incomparable rate quotes Bait-and-switch tactics

This is not to say that all lenders are crooks. Nor are all loan officers out to get you. Far from it. It's just that because the mortgage process is so bewildering and can happen so quickly, it's hard to catch up, much less understand the entire process. Loans can be very complicated—so complicated, in fact, that even the loan officers who are explaining them to you don't always fully understand them.

The average loan officer might close 80 loans per year. That's a lot. But you might buy only two or three houses in your entire lifetime. That means that your loan officer does on a routine basis what you do on very, very rare occasions.

That's no different from other occupations. Anyone can have a unique specialty or trade. Certainly doctors and lawyers have their own protocols, terminology, and business practices. And so do mechanics.

And artists. And plumbers. In business life, everyone has something that's unique to her industry.

The difference is that while a mistake with a gardener might cost you fifty bucks for a new rosebush, a mistake on an interest rate could cost you thousands of dollars. Or qualifying for the wrong mortgage loan could mean that you're in over your head, which could cost you your home. You can get a new rosebush. You can't erase a foreclosure, and it's difficult to erase a bad mistake when it comes to a mortgage loan. That's why you need to know insider information—to protect yourself from costly mistakes and unethical loan officers.

Go to any bookstore and peruse the books on mortgages. How many of them were written by loan officers? Five? Two? One? Most home loan books are written by columnists or authors who have never filled out a home loan application other than their own.

They haven't compared rate sheets from one lender to the next. Or sat down and objectively compared one loan program with another at the behest of a new loan applicant.

I have. Not only do I write regular columns about home loans, but I have written several books specifically about mortgages. Mortgage Confidential now unveils information that consumers do not commonly know so that they can decide what's right for them. Not only that, but Mortgage Confidential also pulls back the curtain on various loan officer practices that only the trained eye can identify.

I've seen almost every situation imaginable. I've seen people attempt to commit loan fraud—consumers and loan officers alike. I've watched the interest-rate markets shake, rattle, and roll through various rate hikes and rate cuts.

Every so often I'll read a mortgage column in a popular newspaper or go online and look at what other people are writing about home loans. Now and then I'll read something and yell out loud, "That's wrong! You don't know what you're talking about!"

The thing about reading something that's been printed, whether it be in a newspaper column, in a magazine, or in a book, is that the reader automatically assumes that what has been printed is correct. That's not the case. And that's why those who aren't in the mortgage industry or those who just comment about it leave themselves open to error.

There are a lot of assumptions about mortgage financing that have reached urban myth status.

Don't refinance your loan unless the rate is 2 percent below your current one. Wrong.

You need perfect credit to get a mortgage. Wrong.

You can't get a loan until your bankruptcy is seven years old. Wrong.

You can't get a loan until your bankruptcy is two years old. Wrong again.

You need 20 percent down to get a mortgage. Wrong. The Fed controls your interest rate. Wrong.

And on, and on, and on.

This book will debunk all these myths and many more. Arm yourself with information, and you won't get taken. Read on.

 
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