Sam Coleman

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Home Loan Specialists, Inc.

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    Mortgage Myths

Conventional Wisdom: Bad Advice

Most home buyers and mortgage borrowers don’t know if their lender is over charging or what costs are fair and reasonable for their situation.  Also, how does a buyer know what program is really in their best interest? The dynamics of the transaction can be confusing and stressful.  Conventional wisdom can sometimes simply be bad advice.  What to do? What to do? Hopefully the information herein will get you thinking.

MYTH - All Lenders Are The Same!

· All lenders are the same… why not just go to the one with the lowest rate?

FACT - “Most” lenders really are the same.

· They have little, or no, training.

· Very little, or no, value-added direction, strategy or advice.

· Only provide programs that fit their needs not those of clients.

All borrowers should only work with lenders who represent the borrower’s best interests.

MYTH - 30 Year fixed rate mortgage is the best type of mortgage!

· The 30 year mortgage is “risk free”.

·  Risk avoidance prevents losses.

FACT - 30 Year fixed rate mortgage is the most expensive loan available!

· Banks demand compensation for accepting long-term rate “risk”.

· Average mortgage “life” is 5 years.

· It generally does not make sense to buy 30 years of rate guarantee to use 5?

MYTH - Pay “Points”

· Pay Up-front Points

· Lowers Rate

· Lowers Principal & Interest

·1 Point = .25% Rate Reduction

   (30 Yr. Fixed)

FACT - Don’t Pay Points

· It could take up to 6 years (or more) to recover $’s spent on points.

· $’s spent on points earn no income.

· 1 Point does not lower the interest rate .25%.  Market conditions and lender greed are the key factors.

· The average American moves every 5 - 7 years.

·  The best interest rate is not always the best deal.

Please call to learn more about other MORTGAGE MYTHS

(Mortgage Myth Information By Bill Early Was Edited For This Presentation)

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(1-866-726-4968)

e-mail: sam4you@hlsinc.us

Personal Mortgage Service (PMS)

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Copyright © 2008 Sam Coleman