Author David Reed Talks About Mortgage Market

National Association of Realtors reported for the sixth consecutive month that we experienced a decline in sales in August. The association also expects to see similar results when the numbers come in for September. However there is some good news amid the sales slump.

We’re currently in a buyers market and mortgage rates have been declining. Also with the increasing liquidity in the market loan availability is improving. The savvy buyer can still net a good deal in the current market. However, any buyer that doesn’t understand how to negotiate a loan could end up in trouble. Most of the reason why the industry is in a mess is because borrowers ended up taking adjustable rate loans that weren’t the best thing for them. While sometimes an adjustable rate mortgage may be the right thing for your situation, for example if you’re not planning to be in the house in the next couple of years. You have to be able to understand how the program works by understanding with a margin is.

David Reed write in his new book that “The average loan officer might close about 80 loans per year.” “You might buy only two or three houses in your lifetime. That means your loan officer on a routine basis does what you do on very, very rare occasions.” This puts most people at a disadvantage against an unethical loan officer.

Reed’s book further explains that “ARMs can get lost in a sea of vocabulary,” “Start rates, LIBOR, annual caps, lifetime caps, fully indexed - it can get confusing. It’s the margin that you need to concentrate on.” He also goes to further explain the mortgage process in his book “Mortgage Confidential”.