Andrew Turnauer - Navigating the Mortgage Maze: An Interactive, High-Tech Guide To Financing Your Home

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Contents

C HAPTER 1
A N A ERIAL V IEW OF THE M ORTGAGE M AZE

C HAPTER 2
A S TRONG S TART : L OOK G OOD ON P APER

C HAPTER 3
A S MOOTH R OAD : K EEP THE R ECORDS C LEAN

C HAPTER 4
G AINING S PEED : C REATE M ORE F INANCIAL L EVERAGE

C HAPTER 5
T HE F IRST B IG I NTERSECTION : S ELECT A M ORTGAGE T YPE

C HAPTER 6
P IT S TOP : P ACKAGING Y OUR P ARTS FOR THE L ENDER

C HAPTER 7
A B IGGER I NTERSECTION : S ELECT A L ENDER

C HAPTER 8
A D ETOUR : T URN R EJECTION INTO AN O PPORTUNITY

C HAPTER 9
R IGHT A ROUND THE C ORNER : M ANAGE THE C LOSING

C HAPTER 10
T HE V IRTUAL M ORTGAGE M AZE : A D IGITAL D RIVE -T HROUGH

Dedication

I dedicate this book to Donna, my wife of 19 years, and my children Lauren and Andrew, and to Dr. Mark Singer. You all helped me navigate through the Cancer Maze during which this book was conceived. Then you helped me turn the conception into a reality. God bless you and thank you.

Acknowledgments

The tireless dedication of a number of very special people made this book possible. Maryann Karinch turned my ideas and words into concepts and complete sentences. Betty Rogers, my mother-in-law, and Marge Turnauer, my mom, proofread, reproofed, and proofread again.

Cindy Jennings added special touches with editing and encouragement. Jeff Gates, author of the QualifyR software program, allowed a version of his program to be part of this integrated book/software package. Jennings and Keefe guided the project through the publishing labyrinth.

And mega thanks go to my partner Brenda Cantu and my staff Imran Mahmood, Marsha Lancaster, and Rachel Wight who kept the office running, loans funding, and the underwriters at bay while I played writer.

Introduction

The word mortgage has its roots in Latin. Mort + gage means, essentially, a pledge until death. Some borrowers might say signing a mortgage connotes, A pledge to die, depending on how exasperating the process is or how high their final loan payments are.

Steering through the convoluted Mortgage Maze is similar for everyone. The one issue that binds the majority of borrowers is the lenders continual request for documentation. Someone constantly demands information that seems redundant or obvious.

Since its next to impossible for people outside the real estate industry to anticipate each requirement, the mortgage process takes on the appearance of a maze. By the time most people get their loan, they are dizzy and exhausted from trying to get through it.

This book wont transform the crooked maze into a straight stretch of highway, but it will alert you to the abrupt turns and bumpy pieces of road so your journey will be less stressful.

T RUE S TORIES N AMES C HANGED TO P ROTECT THE B ORROWERS

Yes, it can happen to you. But you arent alone. People, every day, everywhere encounter the same challenges and emotional trauma that you could encounter during your path through the mortgage maze. Situations as complex or simple as name changes due to marriage or divorce, a quick career climb to the top by moving six times in four years, saying yes to too many low-cost credit card solicitations, always paying cash, and accepting money from your parents for a down payment can put a quick stop sign in the path of the lender. The True Story sections of this book will give you confidence to proceed with the vision to anticipate the curvy road in your personal mortgage maze.

U SING Y OUR C OMPUTER TO M AKE THE R IGHT C HOICES

The QualifyR software included with this book represents one of the most unique aspects of Navigating the Mortgage Maze. It is derived from a software program developed by Jeff Gates and modified for your use with this book. QualifyR will let you play If then with the mortgage prequalification process. You can compare the effect of any type of loan on your financial position.

Additional help is available at the Web site www.maze.com. This site was developed by the author and Brenda Cantu. Maze.com gives you easy access to all the components of purchasing or refinancing a home. You can get your own credit report, including credit scoring (not available to consumers directly from credit bureaus), home value information about your current or desired property, as well as apply for a loan, secure pre-approval, and open your own escrow account.

When you use these resources before you contact a mortgage professional, you will already know the most important questions to ask, how you fit into their ratios, how much money you will need for a down payment, how much house you can afford, and many of the other requirements which would be mysterious and stressful without your computers help. It is possible that you will encounter no surprises on your trip. Most importantly you can learn where your borrowing strengths are and when to use them to your advantage. The house of your dreams will be yours at the loan terms and cost you want.

M ASTERING M ORTGAGE J ARGON

Every profession develops its own jargon. Since you probably apply infrequently for a mortgage, even the applications can be confusing. To say nothing of the first visit with a bad lender who talks to you about a full doc, FIRM, balloon, ARM, quick qualifier, or neg am without explaining one word. This book is designed to introduce the language of the mortgage industry. The first time a mortgage term is used, it is italicized. This means it is not only fully discussed in the text, but also defined again in the glossary and indexed at the end of the book.

M APPING THE M ORTGAGE M AZE

Clearly the process of applying for a mortgage approaches the stress and complication of filing annual income tax forms. This book will navigate you through the mortgage maze by presenting the concepts you need to understand the process and by telling stories to highlight specific problems and their solutions. When you understand who loans money, why, what they want to see from you and when, and the rules they usually play by, you can control your mortgage destiny.

Navigating the Mortgage Maze makes it easy to browse the table of contents, the glossary, the index, and the book to focus on what you need to know. We have devised a visual system of icons to identify certain situations which you will quickly begin to recognize.