Three Things No One Told You About Getting a Mortgage

11 comments Posted on June 1, 2014

by Carolyn Warren

The speaker on the platform offered a great tip on how we could all increase our incomes by charging our clients more. The posh hotel banquet room was full of mortgage loan officers, both bankers and brokers. We were there to learn from “the best leadership in the business.” I looked around the room where a couple thousand eager protégés were scribbling or typing notes. Everyone wanted to know: what was the secret for making more money?

“Get referrals!” exclaimed the speaker. “When clients come to you based on a referral from someone they know and trust, they don’t shop and compare. You can make a couple thousand more on a referral than you can from someone cold calling you.”

His advice sickened me, but I knew he was telling the truth. As an account executive for a wholesale lender, I’d seen loan officers charge their friends, fellow church members, and family more than strangers. This practice underscores the importance of comparison shopping—no exceptions.

As a mortgage insider, I’d like to point out three more things you might not have been told about getting a home loan:

MortgageRipoffs1) First Time Homebuyer Programs aren’t just for first time home buyers.

“First-time homebuyer” is a marketing tactic that usually refers to the FHA loan that requires a down payment of 3.5%. But whether you’re buying your first, second, or tenth house, you can get this loan, just as long as you plan to live in the house yourself and don’t currently have another property financed with an FHA loan. Only one FHA loan at a time is the rule.

If you’re turning your current house into a rental and want to move up into a larger house, you can still use the low-down FHA loan, just as long as your other loan is conventional financing.

2) You don’t need perfect credit, even with today’s stricter underwriting rules.

A stunning 66% of renters said they were procrastinating on buying a house because they were afraid they wouldn’t qualify. (Survey conducted by research firm OnmiTel.) What they don’t know is that some lenders are happy to grant loans to people with a score of 600 now due to recent announcements to loosen credit score requirements.

Many good folks with imperfect credit do buy their own homes.

3) Ignore Internet ads offering low, low interest rates.

There is no such thing as a secret loan program with lower rates than everyone else. Those ads can be deceptive on so many levels. First, interest rates change daily and ads are not updated daily. Second, you don’t know what exorbitant and insane fees they’re charging for those rates. Third, that amazing rate might be for an adjustable rate loan or a 15-year loan, not for the 30-year fixed rate you’re looking for.

Shopping on the Internet for a mortgage is probably the worst way to shop for a mortgage and the best way to get taken advantage of. The second worst way is to call a long list asking for the interest rate. I got sick and tired of seeing good, honest people paying too much for their financing, and that is why I decided to reveal what really goes on behind closed doors in the mortgage business by writing Mortgage Rip-Offs and Money Savers.

Jesus said, “I am sending you out among the wolves. Therefore, be as shrewd as snakes….” Even though He was referring to ministry, the same applies to home loan shopping. There are a lot of tricks, traps, and wolves in the marketplace. We are behooved to equip ourselves with wisdom and knowledge when it comes to making what could be the largest financial decision of our lives.

Carolyn Warren is a mortgage and credit expert with over 15 years’ experience. Mortgage Rip-Offs and Money Savers was featured on Bob Brinker’s “Money Talk” radio show and became a book club pick for The Washington Post’s book club. She offers a mortgage consultation service at

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  • 06/13/2014
    Deanne said:

    More great advice! In 2007, due to a divorce I had to file for bankruptcy. I followed the advice in Carolyn’s books and worked to rebuild my credit. Just 3 years after filing I bought a beautiful home that my family and I adore. Her book “Homebuyers Beware” was instrumental in my achieving this dream.

  • 06/13/2014
    Brendi said:

    Shocking and intriguing! “Mortgage Rip-Offs and Money Savers” is a must-read for every home buyer.

  • 06/13/2014
    Barbara Lockhart said:

    Good advice. So many check the internet these days I was happy to see your comment about the worst way to shop for a mortgage. Very interesting and helpful article.

  • 06/13/2014
    Saundra said:

    Carolyn knows what she’s talking about! I’ve worked with some of the other loan officer types that she speaks of. Everyone looks out for their own best interests, so you need an advocate that you can trust for YOUR best interest and that is Carolyn! Her book is very helpful in avoiding some of the pitfalls of getting a mortgage.

  • 06/14/2014
    Bev said:

    Read Carolyn’s book before going out and shopping for a mortgage co. One can be asking “them” questions with the knowledge you’ve gained through “Mortgage Rip-Offs and Money Savers”.

  • 06/14/2014
    Ryan said:

    Carolyn’s book simplifies what I always thought was a subject too complicated to understand. Thanks for writing it!

  • 06/15/2014
    Bonnie said:

    I like chapter 6. Negotiate Lower Fees & Rates.
    Who knew that there are 12 fees we should not pay. For instance Administrative Fee and Application Fee.
    Such great advice.

  • 06/15/2014
    Brandon said:

    Great counter-intuitive advice – you need a comparison good faith estimate especially if you have a referral.

  • 06/17/2014
    Carolyn Warren said:

    Thank you all for your kind compliments. It is a blessing to be able to help people avoid stress and save money on their home financing.

  • 06/22/2014
    Jonathan said:

    Who knew a writer could take such a mundane topic and make it fascinating & interesting?! Carolyn not only is a great writer, but has the integrity to make her words trustworthy and believable.

  • 07/23/2014
    Necla said:

    I would suggest lkioong or a new job first! Once you find a permanent job, determine the your monthly earnings! Decide how much monthly mortgage payment you can afford based on your earnings! From there, speak to a lender/mortgage broker and get prequalified. Your mortgage lender SHOULD take the stress off of the loan process from you!!! So you can concentrate on moving forward Once you and your mortgage lender determine a mortgage or purchase price, find a Realtor to list your house! Find a good Realtor! Find the one that advertises himself/herself and his listings on different ads!!! When in search of a Realtor, ask where and how he/she advertises! Don’t settle for the ones that only lists on MLS! Exposure is the KEY! The more exposed, the faster it will sell! Ones you find a buyer, get yourself another Realtor to find you a home! And so that you’re NOT left homeless, make sure that you inform the Realtor that the closing of the new home is contingent on the sale of your other home, make sure it is written on the purchase contract! If you don’t, you’ll be forced to close and you’ll be stuck with two mortgages! Let them do the work for you it’s their job!


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