When I first saw “Mortgages 101” by David Reed on the bookstore shelf, I wasn’t sure if it was a college mortgage course or perhaps a basic “how to get a mortgage book.” It is neither. Instead, it offers a unique survey of 250 mortgage questions (they aren’t numbered and I didn’t keep count) and answers that explain how the multibillion-dollar home-mortgage industry really works.
This new book provides important information from an experienced mortgage broker whose home-finance articles I have enjoyed for many years. Reed shares his insider home-loan secrets, offering sage advice along the way on how to overcome frequent home-mortgage problems.
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As I read and enjoyed this book, I asked myself, “Who should read this excellent book?” Frankly, the format is not very appealing to first-time home buyers who need this profitable information laid out in an easy-to-read format.
It is “hard slugging” through page after page in the first few chapters of very profitable but detailed information. A chapter or two a day is about all most folks can handle. But halfway through, the book becomes downright interesting and, if I dare use this word, “exciting.”
Finally, I concluded the folks who will benefit most from this excellent new book are (1) real estate sales agents who need to know this important insider information to pass along to their buyers and sellers, and (2) mortgage brokers and home-loan agents who often don’t understand “the big picture” of how the home-loan industry really works.
Unless you are a home buyer, a home owner refinancing an existing mortgage, a residential sales agent or manager, or involved in the huge residential mortgage-lending industry, you probably don’t need to read this book.
To illustrate, if you are looking for senior citizen reverse mortgage information, you won’t find much information here. If you want information on home equity (second) mortgages and lines of credit, you will find a little information, but not enough.
David Reed obviously understands his mortgage lending field. By answering the 250 mortgage questions he poses, the author educates the reader about home mortgages in an interactive manner. Although I’ve been involved with the residential real estate market more than 35 years, I learned lots of insider mortgage information I didn’t know.
For example, as a homeowner I hate filling out loan application forms when interest rates drop and I know I should refinance my home mortgage. Reed’s section about a “Nina with No Employment” mortgage got my attention.
Then I discovered it will cost me a higher interest rate, plus some extra costs, to get such a mortgage. By the way, Nina stands for “no income, no asset.” Before you start rumors, I have income and assets, but I prefer a “stated income” home loan to avoid the nasty loan application paperwork.
The book’s best chapters explain how credit reports and FICO (Fair, Isaac, and Co.) credit scores affect mortgage approvals. Reed goes into considerable detail discussing what affects FICO scores and how to raise them to get approved with a lower mortgage interest rate.
The author also emphasizes the pitfalls of being a loan co-signer or being involved in a divorce where your ex-spouse is supposed to pay the mortgage but fails to do so. Reed warns there is no easy solution to these problems where the primary mortgage obligor fails to pay on time but the co-signer or ex-spouse receives an adversely affected credit report.
As a real estate book reviewer for many years, I was bored by the book’s first few chapters. Don’t let that happen to you when you start reading this book. It gets much better. Although every chapter didn’t apply to me, such as those dealing with damaged or impaired credit, I found the author’s detailed, thorough coverage to be extremely valuable.
Although the book appears to be aimed primarily at home buyers, it offers additional profitable mortgage material for current homeowners seeking refinancing, home equity, and construction loans. Realty sales agents and mortgage professionals also need this insider information.
Highly commendable are the concluding chapters with sage advice about finding the best mortgage lender and even the best loan officer. In these chapters, Reed reveals “dirty secrets” of how some mortgage personnel can profit from mortgage market fluctuations and the borrower will probably never know they didn’t get the best terms.
Chapter topics include “Introduction to Mortgages”; “How to Know How Much Home to Buy”; “Getting Your Finances Together”; “Down Payments and How They Impact Your Mortgage”; “Getting Your Credit Together”; “Credit Scores: What They Are, How They Work, How to Improve Them”; “Finding Your Home Loan”; “Loans for Good to Great Credit”; “Loans for People with Impaired or Damaged Credit”; “Refinancing and Home Equity Loans”; “Finding the Best Lender”; “Finding the Best Interest Rate”; and “Closing Costs and How to Save on Them.”
This book is not presented in an easy-to-read format (that is the publisher’s fault, not the author’s). But the content is extremely profitable reading if you can wade through the unattractive presentation. On my scale of one to 10, this outstanding home-mortgage book rates an off-the-chart 12.
“Mortgages 101,” by David Reed (AMACOM Publishing Co, New York), 2004, $16.95, 238 pages; Available in stock or by special order at local bookstores, public libraries and amazon.com.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
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