Listening to Radio West on KUER the other night, talking about "Your Personal Finances"....
They had a financial counselor in the studio, which was great, gave good advice... then they had a REALTOR on talking about MORTGAGES. I wanted to call in to the show and ask the moron how many loans he had closed in the last six months. He was giving all sorts of incorrect statistics, and advice.
He noted that in Utah, most of the adjustable-rate mortgages that have been commonplace in the US for about 24 months now, are 5 year fixed, and we won't see fallout of those mortgages until 2008-2010.
Ummmm... the overwhelming percentage of adjustable mortgages that have been originated in the last 24 months are 2 year adjustables, based on the LIBOR index, and the time for beginning to the see fallout from the first nasty adjustments of those mortgages is NOW.
If you want a good way to garner a foreclosure, bankruptcy, and ruined credit history, all in one swell foop, go ahead and borrow the entire amount of what some realtor thinks you should qualify for, and what some idiot mortgage office says they can get you, on a 2 year adjustable mortgage, interest-only loan. You will likely be steered toward the realtor's "preferred lender." You think they are on your team?
Go ahead. Knock yourself out. Have fun with that.
Realtors don't do mortgages, and they are not to be considered experts. They are not even to be considered "on your team." They make between 3-6% of the sales price, for doing what, exactly? Listing your home on the MLS? Looking on the MLS to FIND you a house? GIVE ME A BREAK!! On a modest $250,000 house, that's between $7500 and $15,000 into the realtor's pocket. Did you enjoy that? Somebody paid for that, and that's a lot of money. I know who that somebody was. You think they are "on your team?" Think again. Think about whether that was worth it for you.
Did you know you can list your home on the MLS by yourself for as little as $300. Period. Did you know that you can also search the MLS yourself? Did you know that there are MANY houses for sale that are NOT listed on the MLS? You don't need a realtor. You need a financial counselor that knows how to get you a mortgage that makes sense. Do you think that just because a mortgage investor says you CAN borrow a certain amount that you SHOULD borrow that amount? Are you NUTS? Pick a payment you can live with, get a mortgage commitment on a mortgage program that fits your needs, keeps you secure, and gives you long-term stability, then find a house that will provide that for you. Forget what you CAN borrow, borrow what you SHOULD borrow.
Every time you make a mortgage payment, who do you think about? The realtor that sold you the house, or the loan guy that put you in the mortgage? I'm just sayin'.