Mortgage Advice

    Diane's Mortgage Tips & Other Tidbits  February 12, 2005 Volume 5, Issue 1



















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    Welcome to the new version of my ezine. I hope you find this webpage  approach more pleasing to the eye, yet still full of helpful tips and articles.
    In This Issue:
    1. Diane’s Corner
    2. Featured Article *THOSE CREATIVE MORTGAGES *
    3. Mortgage Tip * What Is A Down Payment? *
    4. Guest Article * Nothing Beats Family*
    5. Question and Answer



  *Top Sponsor Ad*


*** Diane's Corner ***

    I feel that we have really lucked out here this winter. For mid-February we've only had a few significant snow storms and March is right around the corner. Yeah! Can you tell I don't like to shovel snow or drive on ice? That is why we're moving to Texas this summer. I'm in for a long thaw and it will be at least a few years before I complain about the heat. I also want to wish all you romantics out there an early Happy Valentine's Day. Do something special to celebrate your love!


*** Feature Article ***

          By Diane St James © 2005

    'No income', 'No asset', 'No Doc', these are just some of the creative mortgage loans that are available now to meet everyone's needs? Don't have a job right now you say? No problem, go for the 'no employment' loan. Yes - they are out there.
    There are so many mortgage programs available today even MY head spins when I think about them all. Lenders are trying to stay competitive and get their piece of the mortgage pie; and so instead of the old days when a regular fully documented fixed rate loan was all I had to worry about as an underwriter, it has become a combination of this and that or this and not that, and the need for a manual at my side at all times.
    I'm not saying there is anything inherently wrong with these programs, just don't apply for one until you've given it a lot of thought as to what you are doing. Even though you may be able to get one of these loans because some part of your financial picture doesn't have to be verified, make sure that you will be able to make the mortgage payment when the time comes to pay each month.
    For example, you may be too asset shy to be able to buy a home, so you go with a 'no asset' verification sort of loan. Since you still need the assets in order to close what are you going to do? Borrow to the max on those credit cards and then just decide you'll worry about paying THEM off sometime in the future?
    How about the perfect house that you really love but it costs a lot more than you qualify for? So you decide to look at a 'stated income' type of loan and let's say the income that is stated ironically is enough to suddenly qualify for the loan? Then you find out as you are struggling to pay the mortgage and manage all your other bills why you didn't qualify in the first place. By the way the income that is stated is suppose to make sense for the type of occupation listed. If it doesn't make sense it may not be approved.
    By all means, if you are self employed but cleverly hide much of you income with tax loopholes or you have lots of assets but just don't like sharing your statements with a mortgage company, go ahead and use one of these mortgage programs because they are for you. Otherwise, proceed with extreme caution.

*** Mortgage Tip What is a Down Payment? ***
by Diane St. James

    This is the money that you are paying toward the purchase price of a property. It can be interpreted as the money that is being placed in an account being held toward the purchase to let the seller know that you are serious about wanting the property. If someone is buying a home for $100,000 and putting a down payment of 5% on it, the down payment will be $5000.00. The borrower will be getting a mortgage for the remaining 95% more than likely.

    Sometimes the Agreement Of Sale may only indicate $1000 down payment being made (in order to hold the property), but the borrower may still be putting a total of 5% down payment and just paying the remaining down payment at closing.

    Sometimes you may see an ad that reads like this, "Own a home tomorrow with No Money Down!!". Sounds like a used car sales tactic, but this is exactly true (except for maybe the part about closing tomorrow). With so many loan programs available now, you can find some besides the VA loans that require no down payment at all. And there are several that allow just a small down payment such as 3% which in many cases can be a gift from a relative. There are even some that allow you to add some of your closing costs right on top of the loan amount.


*** Guest Article - Nothing Beats Family ***
Copyright © 2005 Ridgely Goldsborough
A View From the Ridge

    I stepped into my hotel room to a pleasant surprise. Lots of room surrounded an inviting king-size bed, flanked by overstuffed armchairs that rested against sliding glass doors that opened onto a private patio.
    A small dining table sat next to a kitchenette with a separate
    sink, refrigerator and coffee machine.
    "Wow," I thought to myself. "Nice place."
    I love hotels-from the Holiday Inn Express to the Ritz-Carlton
    and everything in between.
    I love to enter a clean room, hang my clothes and gaze out the
    window, walk out in the morning knowing that each afternoon when I return, someone else will have made the bed. I like in-room dining and the way they greet you so professionally.
    "Nice to have you with us again, Mr. Goldsborough."
    Very cool.

    The problem is that unless Alison travels with me, I never sleep
    well in hotels. I miss my family. Even though Linus and Camille, at ages 4 and almost 2, find a way to interrupt even the best night's sleep at home, still, I'd rather be with them.

    I'll take Linus clamoring over me at five AM or a kick in the chin from Camille over the finest linens and a chocolate on my pillow.
    When I'm on the road I yearn for my loved ones.

    I'm deeply troubled by the number of parents who wake up too late with the realization:

    "My children grew up too fast. In the hustle-bustle of career
    and corporate rat race, I missed their childhood."
    What they fail to say but too often inwardly think causes me even
    more pain: "and I barely even know them."

    This applies to couples as well-so in a hurry to get who-knows-
    where-a destination seldom defined. Relationships turn into co-habitations, romance into convenience. Very disturbing.
    A hundred years from now, no one will remember the size of your
    bank account, the car you drove or the square footage of your
    The world might differ greatly however, based on your impact in
    the life of a small child.

    Your life will most certainly improve, if you pay attention to your significant other, make the choice to put her or him first. Your example will benefit the rest of us. Our world cries out for role models and heroes of every day living.

    What could you do today to let your loved ones know how much they mean to you?

    What will you do tomorrow?

    And the next day?

    Think of one specific action that you can take, and take it. Then think of another one and take that, too. Challenge yourself to find new ways to express your appreciation and love on a daily basis. It will pay off ten-fold at home.

    On those slightly stressful days when the grass looks a little greener and you feel like maybe you need a break, remember this.

    Room service will never kiss you goodnight.
    That's A View From The Ridge.

    Author Ridgely Goldsborough invites you to subscribe to his free
    weekly inspirational column at A View From the Ridge
    He would love to hear from you by email


    *** Question and Answer ***

    Every issue, I will answer a question that someone has asked. If you have a specific question you want answered, feel free to email me at ezine. I will publish your answer here (in the order they are received). Of course, if you have several questions, you'll want to call me so we can talk one-on-one.

    Q. I have funds in a 401k. I like to use these funds toward my home purchase. I was told my 401k would only allow me to use half of the amount of closing cost. I would like to roll over into a Roth IRA account and than I will be able to use the whole dollar amount of funds, right?

    A: I am not a financial planner or tax accountant, but from what I think I understand about 401k's you either open on up as a ROTH IRA or a 'regular' IRA (non-Roth). And since they are taxed differently I'm not sure if you can 'rollover' an IRA that was not originally a ROTH IRA. You should contact your accountant about this question to get the correct answer and what the tax implications are.

    What you can do in the meantime is ask the administrator of your 401k account about the possibility of borrowing the funds from your 401k and just paying it back via payroll deductions. Maybe you could take most if not all, if you do it that way. I know that many lenders don't count your monthly 401k loan payments in your debts (like it used to). Best of luck to you!


    Hope you enjoyed this issue! Remember, I am here to help you answer all your mortgage questions, before you apply for that mortgage that may affect you for the next 30 years of your life! Have a terrific 2 weeks!
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 Diane St. James; All Rights and Content Reserved