Some advice on mortgages today (fixed rate, escrow, real estate, foreclosure)

[Thatguywho]

Just my thoughts, take with a grain of salt.

1- I would get out of an ARM if I was in one or just leave the house. Rates in the 80s were in the teens...add your ARM to that...uh oh.

2- I would not pay much for a refi, go somewhere else that will work with you. Anyone asking more than a pittance for it is just raking you. Re-fis are easy and even your lender may do it very cheaply. More than 500 and I would shop. Only do fixed.

3- Really look at that equity line or second mortgage you have. Look at your elder family members too. More than likely you will see a rate cap near 20%. You need to refi house to get rid of that if you are gonna keep the house.

4- Buying a home- get a fixed rate. Cannot afford the fixed? Do not buy the house.

5- Buying a home? Better look at the tax rolls and see what they were going for in 2000, 2001. This is a buyers market and true values of homes should be around 2001 levels + about 10%. If you factor in the buyers market you should be taking 10 to 20% off that amount. If you are paying more, you are already upside down. Best to wait.

6- When looking at a home and a mortgage, do not look at the terms (your monthly payment) first. Look at the total debt (cost of home) and its value for resale. Then look at terms. Buying a home that has great terms but horrible debt/resale value is what is the cause of every foreclosure out there.

7- If you are buying a home for an investment, can you rent it and make money? Really? If not, do not buy it now. If you are buying to live in then see 6 above.

8- Do not listen to neighbors, friends, or realtors telling you how much 'sam down the block' sold his home for. Go to the property appraisors site and scan through the actual sales in the area. Go down each home on a few blocks around the house you are interested in. When where they bought and sold and for how much. You will notice the latest homes have a HUGE downward trend in sale price. Think about that.

9- A large amount of sales are of homes in foreclosure or about to be. Contact bank first BEFORE signing final sales contract. Try to really short sale that down to that 2001 or lower price. We are talking about total debt owed upon buying and this is your best hope to lower it.

10- Do not trust anyone helping you, do not trust anyone giving you advice, not even this post. Do your homework and walk away from anyone pressuring you. Do NOT do a deal where there is any money being moved around during or after a sale like kickbacks to the owner and stuff. That kind of stuff is really not something you want to do in todays market at all. Jail is a bummer.

11- Do not...I repeat...DO NOT give anyone a down payment in any form other than your own lawyer. Get an escrow letter from him/her. DO NOT give a check to any real estate, mortgage broker, or other agent even the bank. People are going belly up and an escrow account is a regular checking account. Here today, gone to mexico tomorrow.

12- as part of 11 above, make sure that the person you are signing the contract with is actually the owner. Big scam going on right now. Ask for ID when signing it with them.

13- You pick the closing agent or you walk from deal. Ask your lawyer or do some shopping. Get a good one, or one as good as you can find. DO NOT use the one suggested by the realtor, owner, or mort broker. There are some fast talking scams out there and that title agent can be a front and take it all.

14- just because you do not have spotless credit does not mean there is any reason to charge you more fees. A little higher interest yes, but all the extra fees because of your credit? Walk away from that one and keep shopping.
Follow these things and you may not get burnt or buy a bad mortgage.