Ideas and Opinions from Donald Trump and TrumpU Faculty.
Are There "No Cost" Loans?
I have been in the lending business for 17 years now and am truly amazed at either how well the lending community has disguised the real estate finance process or how many consumers don’t care learn what they need to know before proceeding with borrowing money. It may be a combination of both, though, and lenders are counting on these uninformed or under-informed consumers to get their phones to ring.
On one hand, many finance companies are attracting business thru bait and switch tactics and I am fed up with it. They run “adv-enticements” for “No closing cost” mortgage loans and/or artificially low rates which have magically expired by the time they are able to lock in for the consumer. To keep themselves out of trouble with the FCC and other governing bodies, they offer the “No closing cost” loan by quoting the loan with a rate that is high enough that they make enough in “premium” to pay the loan charges plus a profit. Come on...you didn’t think they were doing it out of the kindness of their hearts did you? Once they have you on the phone and gather your information, that’s when you find out that the rate is going to be about 1-2% higher than standard market rate. They are glad to then point you in the direction of their plain vanilla program like everyone else has. By then you are too invested either monetarily or mentally that you will reward their behavior and close with them anyway.
Real estate investors beware! While there are many reputable companies out there doing a great job at making a mortgage that fits your need, there are possibly many that will try to take advantage of your good nature. Make sure your loan officer knows how long you plan to own this property and ask him/her to identify what your break-even threshold is for any points you are being asked to pay. For example, if you are going to own a property for 5 years and you save .25% on your loan by paying a point, see if that reduces your monthly payment enough to recoup the money before you sell and move to the next.
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7 Comments
Jessica Bond
Medical Careerist
"If It Sounds Too Good To Be True... Do Your Homework."
"Ask Experts For Their Opinion."
"Analyze The Data, And Proceed Or Wait For Another Deal."
Seek Funding From Known And Reputable Lenders, But Don't Believe Everything They Tell You.
"Before You Sign Anything, Review The Contract At Least Three Times (in private, without pressure or distractions) Then Sleep On It."
"Keep In Mind, Every Dollar You Invest Represents Your Hard Work, Time, And Financial Identity."
Like Your Social Security Number, Guard It !
"Never Be Afraid To Trust Your Instincts... They Eat, Sleep And Dream With You."
"Pay With Cash Whenever Possible."
If You Have To Collaborate On Financing, Find Investors That Are Willing To Put Up Cash. Make A Deal Amoung Yourselves About Profit Sharing, Put It In Writing, And Save Money On Unnecessary Interest Charges, Late Fees, Monthly Payments, And Unwanted Disclosure On Your Credit Report."
There Is No Such Thing As A Free Lunch... Somebody Always Has To Pay For It.
Negotiate Good Deals, And Have Faith In Your Decisions.
Everything Else Is Left To Chance!
"Your Home, Should Protect It."
"If You Leave Your Home Unprotected, Shame On You."
"Your Business Is Your Future."
"Every Decision You Make, Reflects Your Good Judgement."
"Making The BEST Decisions Should Be Your Goal."
"Every Loan You Make Has A Price."
Stress is REAL!
It Can Kill You, Make You Regret An Unthoughtful Decision, And Ruin Your Happiness.
"Don't Buy Anything, Before You Understand The Terms Of The Agreement."
"Only A Fool Invests In "No Cost" Loans."
We are at a crossroad in this period between a boom and the other. The first boom meant a lot of speculative activities, price incresings just over the night without any logical reason and other related matters. The new boom which begins in this period will be the boom of professionals – developers, investors and the real estate agents. This year in a totally different project I met Mr. Pau Hortal, a very well known personality in Spanish HR market. He started his business in Romania and told me that our country looks like Spain, 20 years ago in many fields. I felt necessary to think forward and to try to guess if our real estate market will look in 5-10 years as it is in Spain right now. I considered a forward thinking of less than 20 years, because the evolution is more powerful in our market. So, how will be our market in the years ahead of us?
This is a special day for me because it is my birthday and I will make you a gift. I compressed in 10 paragraphs how I see this market based on my day by day activity, the conferences where attended and then discussions I had in the last 12 months with the top managers of the companies which are our close collaborators.
I consider this a gift because any consultancy company can charge you +10.000 euros for offering such an info in a 40 pages study. I consider this … the essence. If you don’t agree with this information, please send me your feedback at adrian.niculescu@euroest.ro.
Due to space limitations I've put the info in a blog. Please be so kind and access the link below:
http://buysellandrent.wordpress.com/2008/06/04/state-of-the-nation-in...
Adrian Niculescu
www.myspace.com/adiniculescu
And never trust anyone but yourself and your gut.
Most have a sense of ENTITLEMENT and a false perception of reality.
Most just don't have the work ethic or professionalism it takes to be a true coach/advisor.
It is a relief when you can actually find a professional loan officer and real estate agent that acts as an advisor on your success team rather than someone that is just out for a commission.
Those are the kind of professionals you want advising you on deals!