How To Never Get Ripped Off When Getting A Mortgage.

That thinking doesn't just apply to mortgages...think about everything else there is in the world we need to have and how we're poorly informed to protect ourselves.

Some small, some not. Certainly a mortgage is the greatest financial decision most of us will ever make and we're trusting someone we may or may not know. Who has time to do a background check, verify employment histories and if any complaints have been filed against someone we're thinking of using?

That's alot to do considering how busy anyone's life is. The exciting part of buying a home is ALWAYS the looking...THAT'S how you get a great education on what you like and what's good and what's not. The hardest part is sitting with someone and revealing your dark secrets of how you pay, or don't pay your bills. That's when the sharks begin to circle. That's when you are most vulnerable and they know it.

There has always been a great deal of mystery in how a mortgage works and how to select the "best" one. If you don't know what to ask or what to look for, you're toast. I also know very few people have the time to really learn how the industry operates nor the courage to ask someone for fear on looking uneducated.

I have a solution: Get educated as fast as possible. The best way to do it is to learn from someone who was on "the inside".

I've been closely watching the House and Senate through any means available on this one. The end result is one more reason the housing market will once again turn to a slump. Congress, in their infinite wisdom, is setting up new homeowners for massive failure. NOT requiring a downpayment is ONE reason the mortgage market meltdown occurred! With nothing invested in the property, when things destruct financially, what does the mortgage company think will happen? The homeowner will stick around and make payments they can no longer afford on what may be a property worth less than what they paid for it?

Reversing months of inaction in a single day, the Senate passed two major bills Dec. 14, 2007 that could help thousands of homeowners now struggling with unaffordable mortgages or heading for foreclosure.

The long-stalled FHA Modernization Act -- which would reduce down payments and raise maximum mortgage amounts for Federal Housing Administration-insured loans -- passed the Senate by an overwhelming 93-1 vote.

Both measures had already passed the House. The differences between the Senate and House bills need to be resolved by conference committee before the bill is sent to the president for his signature.

The FHA modernization bill -- once the House and Senate agree on a final version -- should provide help to homeowners stuck with subprime mortgages heading for unaffordable payment jumps.

Most important, the range of consumers assisted will extend to higher-cost areas of the country, especially California, the Northeast and the mid-Atlantic states.

The Senate bill raises the FHA's statutory loan amount limits to $417,000, the same ceiling as Fannie Mae and Freddie Mac. But the House version would tie the limits to median home prices and could authorize FHA-insured loans in excess of $700,000 in expensive markets such as San Francisco.

The House bill also would allow FHA applicants to obtain loans with zero-down payments; currently the minimum down is 3%. The Senate's version would require down payments of at least 1.5%. The House bill authorizes the FHA to vary insurance premium levels by applicant risk categories. Borrowers who make minimal or no down payments could be charged higher premiums.

FHA loans, which faded in popularity during the subprime boom years of 2001-06, are regaining their earlier market share. Not only do the FHA's fixed-rate loans cost much less than subprime alternatives -- often by 3 to 4 percentage points or more -- but they also come without prepayment penalties and have relatively flexible and generous underwriting terms.

FHA is far more lenient on credit-history issues than any of its competitors, and it routinely funds applicants who have prior bankruptcies and foreclosures.

With a zero-down payment option as in the House-passed bill, the FHA will be the best solution anywhere in the market for people with moderate incomes, first-time purchasers and those with less-than-perfect credit..

Many buyers with prime credit will apply for fixed-rate, consumer-friendly FHA-insured mortgages once the higher loan limits kick in.

My opinion? These targeted borrowers are historically prime targets for mortgage fraud and unscrupulous mortgage brokers and loan officers. All I can say is "Caveat Emptor."

Regardless of how you view your "castle", always protect it. That means use every resource possible to become an informed consumer and not a preventable statistic.

If you have any questions regarding this topic, I'm just a free email away.