A few years ago there was a movie named “Other People's Money.” In it Danny DeVito played a New Yorker who used other people's money to make a deal happen. This is, in a larger scale, the way you can buy and finance your primary home, second home or even an investment property.Real estate mortgages are just a simple and easy way that the average home buyer can leverage their position to buy something that on their own they cannot afford to buy as they do not have the cash to finalize the deal. Plus, mortgage brokers, such as myself, are in business to assist you the buyer in getting other peoples money for you.
The mortgage marketplace today allows homebuyers, such as Miss Brooke Trout, to buy a home. Miss Trout is a single High Country resident who has rented a condo for a couple of years. She has finally decided that this is the place to stay put for a few more years and most importantly, mortgage rates are low and real estate prices are at what she feels has bottomed out.
Miss Trout has a stable work history and a few dollars in the bank, so she has taken the first step to home ownership; she met with a mortgage professional. This step is important, as now she knows exactly how much she can afford to pay in monthly mortgage payments.
She also now knows that there are dozens of mortgage programs available to her, from standard 30-year mortgage to the short-term adjustable rate mortgages.
She knows that she can make a down payment to reduce the amount of cash she borrows and that she can obtain a mortgage that requires little out of pocket expense so she can do some painting and other improvements to the property she chooses.
Now that she knows how much she can afford to buy, the next step is meeting with a real estate agent. At this step Ms. Trout can walk into the real estate agent's office and state that she knows how much she can afford to purchase, knows which mortgage program she wants the mortgage professional to obtain for her and now all that is needed is the right property.
She is confident that she will be able to use other people's money to buy the ideal home for her.
In addition, if the mortgage professional has done his or her job, Ms. Brooke Trout will have a pre-qualification letter in her hand to show the seller that she is qualified to buy the property.
The mortgage professional may have taken it a step further by getting Ms. Trout pre-approved. This would allow for the closing of the deal to happen a bit sooner so Ms. Tout would stop paying rent sooner and start the pleasure of home ownership sooner.
So the bottom line is that mortgages are nothing more than a way to use other people's money to make your life hopefully better.
In addition to being a homeowner, there are tax benefits to using other people's money, but that is another article. So get to your friendly neighborhood mortgage professional to learn how to use other people's money to make home ownership a reality.
For answers to your mortgage related questions, call Bob Kieber at (970) 262-1199 or email him at rkieber@comcast.net. Bob is a local mortgage lender and principal of Resort Lending. He has 30-plus years of professional experience in real estate, finance and investments, and is a longtime resident of the High Country.
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