Mortgages For Dummies®
||List Price: $16.99
Amazon.com Price: $11.89
- Media: Paperback
Publisher: For Dummies (May, 1999)
- Average Customer Review:
Based on 9 reviews.
Amazon.com Sales Rank: 1,877
Do not go Home buying without reading this first !!!!!
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!!!
A good book without the technical jargon
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.
Great Book For home buyers or refinancers
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"
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