Home Equity Loan Consumer Protection Act Of 1987 HR 3011 Hearing Before The Subcommittee On Consumer Affairs And Coinage Of The Committee On Banking Session On HR 3011 October 6 1987

Posted In: Home Equity Loan

Karmen Hust says...

This book was wonderful to read even though it is geared toward the person buying a mortgage, and I am a loan officer, that sells the mortgage.It had numerous terms spelled out so they could be easily understood.It marked off warning signs of things to stay away from. I feel this book will be in my desk for use constantly.

Posted on June 25, 2011

Yvonne Buser says...

This book was an excellent reference for me. I'm looking for a home now and wanted something to prepare me for securing a great mortgage. The authors present the material in a clear cut way while leaving out most of the technical jargon that you most likely have a lawyer or soemone your working with who is a professional in the real estate trade explain to you. You get a thorough understanding of the mortgage without going crazy trying to remember terms of the industry. It's also filled with a load of real world insight on many aspects of the various mortage types, lenders and "rule bending". I was tossed up between "Buying and Selling a Home" by Kiplingers Personal Finace Staff but again it didn't have many technical terms and industry jargon that Kiplingers had. When your a busy person with little time to yourself but want to be prepared for one of life's major puchases than this should be the book for you. I will definitely look over the other books in this line pertaining to real property before checking out other publishers.

Posted on June 25, 2011

Kristy Riebau says...

Buying a home is the biggest financial deal many people will ever make. If you're about to buy your first home it pays to learn the ins-and-outs of mortgages. Structuring your mortgage properly can save you thousands or even tens of thousands of dollars over the life of the mortgage. "Mortgages For Dummies" explains how mortgages work and how to get a great deal on your mortgage.

"Mortgages For Dummies" begins by asking the reader to evaluate how large of a mortgage he/she can afford. Tyson and Brown discuss budgeting, which is something many people will already know. The authors point out that in addition to covering your basic expenses, such as food and water, you must also allow for your other financial goals, such as retirement planning. Only through budgeting will you get a handle on how large of a mortgage you really can afford. Obviously, you don't want to wind up with mortgage payments you can't pay!

Lenders have separate evaluations of how much you can afford. Tyson and Brown suggest that lenders will expect your monthly housing expenses and repayment of non-housing debt to total no more than about 36% of your monthly income. And, your total housing expense probably shouldn't exceed 28% of your monthly, pretax income.

Tyson and Brown suggest not making an overly large down payment, "if it depletes your emergency financial cushion." And, don't accept a bigger mortgage than you think you can afford just because the banks say you can afford it!

If possible, you probably want at least a 20% down payment on your home. Lenders borrowing to people with less than 20% equity have found that there is an increased risk of default. Because of this, Tyson and Brown explain new homeowners with less than 20% equity in their homes will need to pay Private Mortgage Insurance (PMI). PMI can cost hundreds of dollars a year. PMI benefits the borrower, not the homeowner. Tyson and Brown suggest that as soon as you have 20% or more equity in your home, you should eliminate PMI.

Another option is to have the government insure or guarantee your loan. Mortgages For DummiesTM mentions FHA, VA, and FmHA government-guaranteed loans.

Chapter 3, Fathoming the Fundamentals, was one of my favorite chapters. The chapter does a good job explaining the secondary loan market and the purpose of the Federal National Mortgage Association (FNMA, or Fannie Mae) and the Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac).

"Mortgages For Dummies" discusses the difference between conforming and non-conforming mortages. Tyson and Brown write: "This delicious tidbit of information can save you big bucks. Conventional mortgages that fall within Fannie Mae's and Freddie Mac's loan limits are referred to as conforming mortgages. Mortgages that exceed the maximum permissible loan amounts are either called jumbo loans or nonconforming loans. ... You pay dearly for nonconformity."

"Mortgages For Dummies" goes on to give the money-saving tip: "If you find yourself slightly over Fannie Mae's and Freddie Mac's limit, don't despair. You can either buy a slightly less expensive home or increase your cash down payment juuuuuuuust enough to bring your mortgage amount under the conforming loan limit."The "juuuuuuust enough" isn't my typo, although I probably got the number of u's wrong. It's Dummies' humor.

Today, "Mortgages For Dummies" Chapter 9, Refinancing Your Mortgage, will be popular. Tyson and Brown provide an example showing how quickly your refinancing will breakeven. They give us "Refinancing's Magic Formula" to calculate if you should refinance.

"Mortgages For Dummies" doesn't formally introduce the annual percentage rate or APR, and I believe this is a critical oversight. (The book does mention APR in its glossary). So, you might be quoted 7.2% and not realize this rate doesn't take into consideration points and fees you will pay, i.e. it's not the APR. Suppose your current mortgage rate is 8% (APR), you might quickly calculate that you save (neglecting tax effects)8 - 7.2 = 0.8% on the principal loan amount. This would be incorrect, because your actual APR would likely be higher than 7.2% due to the added fees. You really need to distinguish between the fee-inclusive rate and the fee-exclusive rate you might be quoted.

Overall, I think reading "Mortgages For Dummies" is useful for people who are buying their first home or considering refinancing an existing home. Enough dollars at stake that you should pursue all information on the topic and become an informed consumer, even if you need to tolerate some siiiiily jokes.

Peter Hupalo, Author of "Becoming An Investor"

Posted on June 25, 2011

Tula Pastorino says...

Being a new home buyer, I found this extremely useful - especially while going through a re-financing. But as the book says it's for dummies [like me :)], and covers only the basics.

very well written.

Posted on June 26, 2011

Gwen Rustrian says...

Excellent book. This book is well-written, concise, and articulates the essentials of mortgages succintly and with real-life examples.

As a serious first-time home buyer and real-estate investor, I needed to develop a fundamental understanding of the different types of mortgages available on the market and what is best suited for me and my financial goals.

This book classifies all mortgages into its 2 basic types, and explains benchmark mortagage financing options as well as the more exotic or creative types of financing available.

Easy to read, fun to read and you'll get a lot out of it.

Posted on June 27, 2011

Dorsey Pereiro says...

I read this book shortly before we signed to build a home, and I can't say how helpful it has been. Knowing how mortgages work (especially ARMs) and the right questions to ask has definitely changed the treatment we have received from various mortgage companies. We ended up going with our builder for financing and after dealing with them, I get the impression that a lot of people DON'T read up on mortgages and just take whatever is offered. Don't just trust the mortgage companies to give you the best deal - read this first and arm yourself for negotiating!

Posted on June 30, 2011

Esteban Robbins says...

You will definitely find out just about anything you wanted to know about mortgages:fixed and ARM (all the others are variations on these themes).My only small complaint is the same as the reviewer's below: several times the authors refer to appendices that are not there!There are also some typos ("suprised") some in prominent places -- it just gave me the feeling that the book was rushed.One piece of information I felt they could have spent more time on was the mechanical side of paying down a 30 mortgage faster.For example, how many years does it take off your loan to put in one extra payment a year, or $100 per month, etc.... Home buyers often pick a 30 year mortgage because of the low monthly payment, but can strive to put in an extra payment a year to save tens of thousands of dollars of interest.This information would have given more details to the types of mortgages most people get.The authors spent a bit too much time by comparison on some relatively rare loans (reverse mortgages) although no one will put a gun to your head and make you read those parts.Overall, it was easy to follow and the best of the books on understanding how mortgages work and how to compare them.

Posted on June 30, 2011

Margarite Favero says...

I've found this book the most useful of the dozens I scanned through at the bookstore.The numbers used in the examples better represented the real-world of 1999 than the others.The authors do a good job ofexplaining the steps one should take to obtaining a mortgage and the manyterms that are thrown about the mortgage industry.I didn't come away fromthe book with a definitive answer to "which mortgage is right forme?" but I certainly understood what the trade-offs were between thedifferent ones.

One problem I did have with the book is the manyreferences to the graphs in "Appendix C" of how the ARM indiceshave behaved over time. The copy of the book I have has no such informationin appendix C or any other appendix.

Posted on June 30, 2011

Gabriella Boccanfuso says...

Excellent, plain English explanation of the various mortgages and how to choose one that best fits your situation.Also details how to shop and negotiate the best deal...with all the hype about shopping on the internet,that excellent chapter alone is worth the price of the book.I learned alot about "creative financing" techniques like 80-10-10 loansthat I knew nothing about before picking up a book.I've tried othermortgage books and found them to be dull and not to the point.This bookwas a joy to read and left me thinking clearly!

Posted on July 1, 2011

Lorette Sherrell says...

This book has done a great job in explaining and putting in simple, understandable words all the mortgage techicals and jargon. The mortage offical that originated my loan application was amazed at how much i knew about the matter (if she only knew).Seriously, if you want to get the deal that benefits you the most, then get this book and save hundreds and maybe thousands on closing costs and interest rates during the life of your loan. It will only cost you $16.99 and some little time to read and understand.Hope your have a great deal!!!

Posted on July 2, 2011