La Jolla Real Estate: La Jolla Luxury Homes

Common Sense Mortgages

Great! Now is the perfect time to buy La Jolla communities Real Estate. Getting pre-qualified for a mortgage is a great way to expedite the process of owning a new La Jolla home in one of several fabulous locations such as La Jolla Farms and La Jolla Shores. There are some terrific resources on the market that will help you to enter into the sometimes confusing world of lenders. Navigating the mortgage maze requires the ability to keep on top of the ever-changing variety of mortgage loan programs.  Here are a few books and tips to help you along.

"The Common Sense Mortgage: How to Cut the Cost of Home Ownership by $50,000 or More" is your guiding light.

A reference staple on the bookshelves of real estate professionals and home buyers alike for more than a decade and a half, "Common Sense" has kept pace with what both need to get them through the ordeal of financing the largest single purchase many will ever complete.

The book's success is largely due to the able authority of is author, Silver Spring, Md.-based Peter Miller, a respected media source and pioneer in virtual reality.

Miller, known as "OurBroker," laid the ground work for America Online's current real estate area when he created and hosted AOL's Real Estate Center. Webmaster of his own Ourbroker.com Web site and columnist for RealtyTimes.Com, among his other endeavors, Miller knows mortgages on and off the net.

Originally based on consumer perspectives published in the Washington Post when negotiating for the best mortgage was a novel idea, "Common Sense" has become the mortgage book to buy.

"The responses from phone calls and letters were that it was surprising that you could negotiate to get the best price and terms. Also consumers didn't realize the cost of loans was two to three times greater than the acquisition cost of a house," said Miller.

The book provides consumers with a tool box to open the previously closed world of mortgages.

"The book has two sections. The first is an introduction to the mortgage business. Why lenders make loans and how you get them and what you need to know about underwriting and secondary lenders," said Miller.

Much like an academic tome that prepares you for what's ahead, the book first explains its premise and then begins to remove the shroud of secrecy that often comes with mortgages.

"Common Sense" teaches mortgage basis, the lingo of lenders, the underworld of underwriting, on and off-line mortgage marketing, financing for a variety of home types and the world of escrow.

To compile the mortgage manual, Miller mines not what the lender sends to consumers, but the behind-the-scenes documents typically reserved for underwriters and others who need to know the inner workings of the mortgage milieu.

"I don't want a news release about a new product. Fannie Mae once sent me a 24-page fax of underwriting guidelines for a new product," says Miller.

"Common Sense's" second section provides the details for first-time buyers, including gifts, co-signing, IRA down payments, employer assistance, equity sharing and government assistance, among other strategies. Miller also devotes individual chapters to private mortgage insurance, no money down-vs.-cash loans, second loans, ARMs, and a dozen and a half alternative loans including little known ecology loans, pledged asset mortgages and zero-interest loans, as well as the better known 15-year loans, home-equity loans and reverse mortgages.

Little gets by Miller. In a fast-moving market, he has done a remarkable job keeping his book current and consumers and professionals prepared to tackle a difficult subject.

"What I hope will happen is the reader will use the book to ask questions. Instead of saying this is the answer, it says this is how the loan program works. Here are the questions you should ask. It's a basis for people to get information and act on it," Miller says.

So, what loans should you avoid?

125 to 150 Percent Financing. If property values decline and you must sell, you'll be in the red.

Balloon Loans. If you can't make the balloon payment, can't sell the home, aren't eligible to refinance, or are otherwise unable to meet the balloon's terms you'll be in for a rude awakening from the American Dream. You could lose your home and your credit standing.

Land Contracts. You need a real estate attorney to understand its components.

Prepayment Penalty Mortgages. Amounting to as much as six months interest on the outstanding loan balance or 1.5 percent of the original loan balance, prepayment penalties can cut into the savings from a refinance.

40-year Mortgages. Longer terms, mean cheaper payments but total costs could amount to hundreds of thousands of dollars more over the life of the loan.

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