TO THE CONSUMER, it may seem like a mortgage is a mortgage is a mortgage. Find a house, put some money down, and move in. But the mortgage industry has gone through some major changes that affect absolutely everyone who wants to obtain financing to buy a home. Everyone. Understanding and interpreting these changes is critical to properly planning for the right financing. Make a mistake, and you’ll get the wrong loan. A mistake on a 30-year mortgage means a potential reminder of that mistake for the next 360 months. It can even mean the difference between getting approved or not getting approved. What used to be a complex mess of literally hundreds of different loan types has now been broken down into two basic categories: conventional and government. But those loans have also taken on their own twists and turns like never before.
For a 30-year fixed-rate loan, there are now literally 54 permutations to calculate not only the rate and terms but the literal approval itself. Loan programs have vanished. Credit guidelines have been restored to their original roots and in some cases made more onerous. Still others provide financing options not available before. It used to be that simply applying for a mortgage loan meant an approval of some type, somewhere. No longer. It also used to mean that almost anyone could be in the mortgage business and become a ‘‘loan officer.’’ No longer. This is the first book that lays out the new rules, why they’re there and how to get approved in the new mortgage market. Or perhaps ‘‘new’’ isn’t the best descriptor. Perhaps it’s simply a reversion to original lending guidelines. In reality, both statements are correct. But to understand where we are now, we have to understand how we got here.
For a 30-year fixed-rate loan, there are now literally 54 permutations to calculate not only the rate and terms but the literal approval itself. Loan programs have vanished. Credit guidelines have been restored to their original roots and in some cases made more onerous. Still others provide financing options not available before. It used to be that simply applying for a mortgage loan meant an approval of some type, somewhere. No longer. It also used to mean that almost anyone could be in the mortgage business and become a ‘‘loan officer.’’ No longer. This is the first book that lays out the new rules, why they’re there and how to get approved in the new mortgage market. Or perhaps ‘‘new’’ isn’t the best descriptor. Perhaps it’s simply a reversion to original lending guidelines. In reality, both statements are correct. But to understand where we are now, we have to understand how we got here.
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