Most people only get a mortgage every seven years or so. Loan officers do this several time a day. How can you expect to compete with someone with more knowledge than you?
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".
You can learn how at: http://www.MortgageSelfDefense.com

Credit information can, and usually does, stay on a person's credit report for seven years. Collections stay on the report for seven years from the date of last activity - whether that is the date that the account was filed as a collection or the date the account was paid in full. Here's an example:
"John Doe" had a collection for $300 filed against him in October of 1994, and he hasn't paid it. It is now September of 2001, so in a few weeks that collection can come off of his credit report. (He will probably have to request of all three credit bureaus that they take it off.) However, John has applied for a loan today, and the loan officer tells him that he has to pay off that debt in order to be approved. Since he has the money, he pays it off. Because the date of last activity is now September 2001, the collection will show on his report until September 2008 - another seven years.
Bankruptcy information can stay on a credit report for ten years. Information about foreclosures is reportable for twelve years from the date filed. Garnishments, judgments, and tax liens can stay on the report for twelve years from the date of entry or for seven years from the date they were satisfied. Dismissed garnishments, judgments, and tax liens are not reportable.
Type of Information Length of Time Can Stay on Credit Report
General credit information Seven years
Collection Seven years from date of last activity
Bankruptcy Ten years
Foreclosure Twelve years from the date filed
Garnishment Twelve years from the date or entry or seven years from the date satisfied
Judgment Twelve years from the date or entry or seven years from the date satisfied
Tax lien Twelve years from the date or entry or seven years from the date satisfied
Dismissed garnishments, judgments, and tax liens Not reportable
A consumer can request copies of his or her credit report from the three credit bureaus and dispute information that is incorrect. Incorrect information can be corrected or removed, but correct information (good or bad) usually stays on the report for the period allowed. Only the credit grantor or credit bureau can remove correct information - the consumer cannot remove it.
Please bear in mind that these are current as of this writing and the length of time periods may change at any time.
Mortgages can be an incredible tool to build wealth and house your family, create memories and give life stability...unless you get ripped off. Before you even speak to a lender, please get educated. As a retired mortgage banker, I know what all the "dirty little tricks" are. More importantly, I can show them to you. And I do.

It's no secret how many Americans are losing or are about to lose their precious piece of the "American Dream." They're about to be homeless because of the "smoke and mirror" tactics shrouding the mortgage industry. I'm going to blow the lid CLEAN OFF these nasty deep pockets of profit, make tons of enemies in the industry and protect you in the process.
The strategy of lenders is to maintain an uneven playing field with their clients. The average person only gets a mortgage every seven years. How can you become good at something you do every seven years, especially if you're dealing with somebody who knows all the ins and outs and is doing this several times a day?
Never before in the history of this country has money been so cheap and repossessed homes and personal bankruptcies been so high.
So, who's making all the money and how?
In a word..."Servicers"
The nations largest servicer of mortgages charges up to 1/2% of their loans held per year. As of June 2007, this servicer managed $1.415 BILLION. Do the math.
Their ONLY goal is to throw as much money on the street as possible. They don't care how it comes back because that's "...not their problem." That's where mortgage bankers and brokers come in. Mortgage companies hire loan officers to produce mortgages to sell to the servicers for sizeable "back end" commissions.
If you've been taken advantage of already, on behalf of this industry, I apologize. If you've not yet made that mistake, or are in the middle of a mortgage transaction or know someone who is... STOP!
Tip Number 1: Don't make a mistake and become another statistic in a time when foreclosures are at an ALL TIME HIGH!
Tip Number 2: Home prices will be leveling off soon and you'll want to be positioned to take advantage of that.
To be prepared, here's what you need to do...
Get educated. Be a hero to your family and friends. Maybe not now, but one day you will.
My name is Louie Frias. You don't know me yet, but after reading this exposé on the mortgage industry's "dirty little secrets", you're going to be glad you do. I've made an insane living for over twenty-five years as a mortgage banker and broker. If there was a way to make a mortgage fly, I either knew about it or created it.

The definitive answer is... "Depends".

On, how much debt you have.
What your intentions with counseling are.
On whether you understand how CCC on your credit report appears to a lender or underwriter.
On what an attorney advises you of.
On why you are even considering them in the first place.

Let's begin with what "exactly" CCC is.

CCC's are treated as non-profit entities whose goal in life is to assist a prospective home mortgage borrower or overwhelmed consumer manage their "out of control" debt. All CCC's are governed by the FTC and anyone can own one. They are NOT a Federal Agency.

Credit card, auto loans, personal loans, school debt. By themselves these debts can be managed. However, when combined with increasing interest rate adjustments and dwindling personal income, they can quickly and easily become an alligator from which there is little hope of escape.

Many consumers are conditioned to react with knee-jerk responses to bankruptcy due to being innundated with attorneys advertising how easy it is to file bankruptcy. What they fail to disclose to the consumer is the changes in bankruptcy laws. Those laws were changed to prevent consumers from simply abusing credit. Charging astronomical amounts of goods and services with the intention of never paying them back - via bankruptcy.

Uninformed consumers who arrive at an attorneys office expecting this loophole to still be available are surely in for a disappointing shock. At that point morality steps in. Pay it back or not? Bankruptcy or CCC? Legalman pursuades a high percentage to go the route of bankruptcy.

Since I'm NOT an attorney, I cannot provide legal advice, however, I can provide information on why you might consider CCC.

In 2005 Congress enacted a new bankruptcy law that require consumers to attend pre-filing briefings and financial management skills classes by an approved credit counseling agency. A cursory investigation of numerous CCC websites reveal that while their "intent" is admirable, they do not fully disclose the effects of having CCC appear on a consumers credit report. They'll gladly tell you what's on it and how to "manage" it through a debt management plan, but they won't tell you how a mortgage underwriter will view their appearance. At best, they might attempt to explain "how" a FICO score works. (Lack of) Full disclosure is partly the reason Congress has investigated many over the years.

First understand that CCCS agencies represent the Credit Card industry - not the consumer. Think about it. When a consumer calls the card issuer, (which is VERY rare) the treatment received is overall demeaning; hence the avoidance of the call. Therefore, the card companies place a "middle-man" between themselves and the consumer. The card companies dictate the acceptable scope of terms and those terms are issued to the consumer. So, if the consumer does not pay a fee for counseling, how does CCCS make money?

Credit card company subsidies AND the consumer may be presented with a bill for CCC services as well

The consumer take a HUGE leap of faith in using CCC's and here's why. Remember, these are someone's "business". Businesses go "out of business" all the time. CCC's exist to structure a repayment plan between the consumer and the creditor.

The "plan" is this. Negotiated, reduced monthly payments to your creditors. You send in adequate funds each month to CCC to cover the new monthly total. CCC then forwards the designated payment to the creditor. HERE'S the danger:

What if CCC fails to forward the payment? On time? Or in full? Any glich between CCC and the creditor and YOU get the harassing phone calls! Not CCC!

Some abuses have been so rampant, congress has even stepped in. Read about those here:

http://www.ftc.gov/os/2003/11/031120testimony.shtm
http://www.cccsnct.org/index2.php?option=com_content&do_pdf=1&id=53

If you do decide to use a CCCS, investigate them. Ask for references. Ask if they supply you with monthly statements you can compare to your credit card and other debt statements. You need to account for every penny you send them and you need to be aware if those pennies are being received as scheduled.

Once you have accurate information, only then can you make an informed decision.
Informed decisions help tremendously when the stakes are so high. Getting the right mortgage can go a long way in making sure you get a good night' sleep. As a retired mortgage banker, I know all the "dirty little secrets" used daily in the industry.

When you're considering buying a house you will make into a home, you're going to need financing you can live with.

Before any professional real estate agent or broker even LOOKS at you, they're going to want (Nay require) you to have your financing already in place. The seller they represent, whether that be an individual, couple, bank, trust, or investor, your offer WON'T even be looked at without a letter from a lender. That means, bank, mortgage banker, mortgage broker, credit union or other acceptable source of funding. (Trust funds, annuity, insurance settlement, etc.)

Which brings us to the answer to the question: "Pre-Qualification" or "Pre-Approval".

Best answer for you to be taken seriously - Pre-Approval trumps ALL other forms. This means you've actually APPLIED for and received loan approval. It means a formal application and all supporting documentation relative to your job, residence and savings have been verified. It means your full credit report has been retrieved and analyzed by an underwriter for layers of risk associated with carrying a mortgage. In essence, it means you have a "credit card" with a predetermined limit. It means you are a "cash buyer". It means, you've done your homework and are considered GOLD in the eyes of anyone you present an offer to purchase to. You have reversed the tables and are now in control. NOT the seller, NOT the agent and NOT anyone else. You have the "thing" everyone wants. When you have what everyone wants, you're the boss.

So, what then is "Pre-Qualification"? AKA a "PQ".

Toilet paper. Garbage. Refuse. $1.00 a gallon gasoline.

A PQ is nothing more than a piece of paper issued by who knows, which states you've been interviewed by a "lender" or "Loan officer" and they've looked at your income and you've told them of your expenses and based on their calculations, you qualify for a loan of "X" dollars. No credit report. No job or savings verifications. No professional underwriter.

So, if you're serious about buying a home, which should you have in your hand?

If you're a home seller, which buyer are you going to take seriously?

If you need or want to learn more about home mortgages or mortgage secrets, log on to: http://www.MortgageSelfDefense.com

I'm a retired mortgage banker who helped clients for more than25 years. I know ALL the "dirty little secrets" used against you. I show some of them to you along with free reports, tools and tips on my website.

In a typical mortgage the homeowner makes a monthly amortized payment to the lender; after each payment the equity increases within his or her property, and typically after the end of the term (e.g. 30 years) the mortgage has been paid in full and the property is released from the lender. In a reverse mortgage, the home owner makes no payments and all interest is added to the lien (loan; mortgage) on the property.

Requirements
To qualify for a reverse mortgage, the borrower must be at least 62 years of age. There are no minimum income or credit requirements, but there are other requirements and homeowners should make sure that they qualify for the loan before they invest significant time or money into the process. For most reverse mortgages, the money can be used for any purpose; however, the borrower must pay off any existing mortgage(s) with the proceeds from the reverse mortgage and, if needed, additional personal funds. A pending bankruptcy which has not been finalized may, however, slow the process. Some types of dwellings, such as lower-value mobile homes, do not qualify. Before borrowing, applicants must seek free financial counseling from a source which is approved by the Department of Housing and Urban Development (HUD). The counseling is a safeguard for the borrower and his/her family, to make sure the borrower completely understands what a reverse mortgage is and how one is obtained. If the owner receives monthly payments through the reverse mortgage, then the debt on the property increases each month. (The received amount adds on to the back of the loan.)
If a property has increased in value after a reverse mortgage is taken out, it is possible to acquire a second (or third) reverse mortgage over the increased equity in the home. But in certain countries (including the United States), a reverse mortgage must be the first and only mortgage on the property.

Reverse Mortgage Proceeds
The amount of money available to the consumer is determined by five primary factors:
%u2022 The appraised value of the property, whether any health or safety repairs need to be made to the house, and whether there are any existing liens on the house.
%u2022 The interest rate, as determined by the U.S. Treasury 10 year T-Bill or the LIBOR index.
%u2022 The age of the senior-the older the senior is, the more money he/she will receive. The HUD/FHA amortization table subtracts the senior's current age from 100 years, and divides the maximum loan amount by the difference. The other reverse lenders also factor age in the same way, although each one has a slightly different way to determine expected life span.
%u2022 Whether the payment is taken as line of credit, lump sum, or monthly payments. Line of credit will maximize the money available, while lump sum provides the cash immediately, but the interest fees are the highest.
%u2022 The location of the property, and whether the maximum loan amount is subject to the maximum loan limits.
All these factors contribute to the Total Annual Lending Cost (TALC) as defined by the US Federal Government Regulation Z, the single rate which includes all the loan costs. The specific formulas to calculate the impact of the factors listed above can be found in Appendix 22 of the HUD Handbook 4235.1
There is also a type of reverse mortgage for homes valued over the maximum Fannie Mae limit. These are called "cash" accounts, and are proprietary loan products. The money received (loan advances) are not taxable and do not directly affect Social Security or Medicare benefits. However, an American Bar Association guide to reverse mortgages explains that if you receive Medicaid, SSI, or other public benefits, loan advances will be counted as "liquid assets" if the money is kept in an account (savings, checking, etc.) past the end of the calendar month in which it is received. The borrower could then lose eligibility for such public programs if his or her total liquid assets (cash, generally) is then greater than those programs allow.
A borrower can elect to move available funds into a "set-aside" account, similar to a typical escrow account, to pay for his or her future property taxes and/or homeowners insurance. Currently, most reverse mortgage borrowers do not exercise this option and instead elect to be responsible for the payment of taxes and/or insurance on their own. It is important to note that the homeowner must ensure that taxes and insurance are kept current at all times. If either taxes or insurance lapse, it could result in a default on the reverse mortgage.
Costs And Interest Rates
The cost of getting a reverse mortgage from a private sector lender may exceed the costs of other types of mortgage or equity conversion loans. Exact costs depend on the particular reverse mortgage program the borrower acquires. For the most popular type of reverse mortgage in the U.S., the FHA-insured Home Equity Conversion Mortgage (HECM), there is an insurance premium of 2% of the loan and a 2% origination fee in addition to normal closing costs, which are typically several thousand dollars, but vary depending on the third-party costs (appraisal fees, title searches, etc.) which must be undertaken. Thus a $200,000 loan would have $8,000 in costs beyond the normal closing costs added onto the loan at the outset. Other programs skip the insurance premium but still require the origination fees and closing costs, and some programs waive the initial costs if the borrower borrows all or most of the maximum amount he or she is eligible to receive. In addition, a monthly service charge (between $25 and $35) is usually added to the total amount of the loan.
In all of these cases, the costs of a reverse mortgage can typically be financed with the proceeds of the loan itself, with the costs and fees being rolled directly into the principal balance of the loan, rather than paid by the borrower in cash. While this does permit borrowers with little or no available cash to get a reverse mortgage, it means that the initial loan principal will be increased, and consequently, that the fees will begin accruing interest.
Interest rates on reverse mortgages are determined on a program-by-program basis, but are typically similar to interest rates offered by Adjustable Rate Mortgages (ARMs). All major reverse mortgage programs have adjustable interest rates which are adjusted on an annual, semi-annual, or monthly basis. Because reverse mortgages have no fixed duration, typically there are no reverse mortgages with fixed interest rates. There are now some new reverse mortgage programs which have fixed interest rates.Since there are no payments made during the course of the loan the interest accrued on the principal is then added to the principal of the loan.
Some state and local governments offer low-cost reverse mortgages to seniors. These "public sector" loans generally must be used for specific purposes, such as paying for home repairs or property taxes, but most of them are insured by the Federal Housing Administration (FHA) and often have more favorable interest rates and fewer or no fees associated with them. These programs are typically very restrictive in terms of qualification and location, and many regions, states, and areas do not have such programs at all.
Related Taxes
The American Bar Association guide advises that generally,
%u2022 the Internal Revenue Service does not consider loan advances to be income,
%u2022 annuity advances may be partially taxable, and
%u2022 interest charged is not deductible until it is actually paid, that is, at the end of the loan.
Other Options
A significant drawback to reverse mortgages are the high upfront costs. Some seniors choose other options to draw on their home equity, particularly if they don't plan to remain at the property more than five years. No cost and low cost reverse mortgages are available for those homeowners who anticipate moving from the home in the near future. These 'no cost' mortgages do carry higher interest rates than the standard monthly FHA HECM (reverse mortgage).
For example, they may select a home equity line of credit (HELOC), requiring interest-only payments for 10 years. These loans typically have very low (or zero) upfront costs. HELOC interest rates are usually based on the prime lending rate and are therefore often higher than the FHA monthly HECM, which is based on the one-year constant maturity U.S. Treasury rate.
Other options which can free up home equity but avoid the high upfront costs of a reverse mortgage include: 1) intra-family loan or sale-leaseback and, 2) selling and moving to a less expensive dwelling or location. However, when selling the homeowner incurs high closing costs including, typically, a 6% commission, moving costs, and purchase costs on the new dwelling. Currently, there is a coordinated government program called "Aging in Place" intended to assist homeowners wishing to remain in their home and/or neighborhood. Studies conducted by various agencies, including AARP, show that over 80% of elderly homeowners do not want to move.
Maximum Amount Available To Borrow
There are basically two different broad varieties of reverse mortgages, with two different maximum amounts that you can borrow.

One, U.S. Government federally insured reverse mortgages through the department of Housing and Urban Development (HUD). These FHA reverse mortgages have lending limits that are currently set at the county level; the maximum amount that you can borrow through this variety of a reverse mortgage is $362,790. The law annotation is FHA 203(b) and since the lending limit, or maximum amount you can borrow, is set at the county level, your amount could be lower depending upon property values and trends in your county. The lowest lending limit is $200,160, typically in rural areas. A similar reverse mortgage is offered by Fannie Mae, a U.S. Gov't sponsored lending agency that has a higher reverse mortgage lending limit of $417,000 for 2007.

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