I don't know that that many people employ a lawyer for a home purchase.

ditto. sat right there at closing with us. glad she did, or else we would have had to foot the 'additional costs' for a repair that the seller guaranteed the price on.

It is a complete mountain of paperwork. And you get it handed to you, sometimes all in one whack, with the person sitting across the desk from you, pointing at where to sign.

I consider myself a fairly intelligent person, one who reads contracts, is not all that naive about money. But the mortgage process was utterly terrifying for me, and the vocabulary is extremely confusing. And realistically, I had no idea what I could or couldn't afford. I did the math, but I was getting told drastically different things from the people I was asking.

At any rate, now is probably a good time for me to offer up some serious gratitude to Daisy Jane! I completely owe any success I'm now having to you! You gave me that credit report translation information which helped us to correctly read and clean up our credit. You told us what things to do and not to do in that process, resulting in actual improvement, instead of what we were likely to try.

Then you encouraged us to seek out the HUD programs, which we did, finding us the bank we ultimately went with, one that was really willing to work with us to get us what we needed and to go the extra mile. You told us what to prepare, and when to prepare it, so we went into the process with the right information. That did, as you suggested, go miles and miles with the bank, making them really pleased and cooperative with us. They mentioned it specifically to us, later, saying we were so prepared and prompt with information, and that it really helped.

The first bank we applied with would have given us the loan, as they cater to less than perfect credit, but at a prohibitive rate because of our low income. The second bank (our own bank) also would have given us the loan, but wanted us to go with an interest only program we felt was not good for us. Also they were rude and laughed at us when we asked questions.

But the bank we found through the research for the HUD rural program has been stellar all the way through the process. They're loaning us less, which puts our loan to value at a number where we won't need mortgage insurance. It's a two time close instead of a one, but because we're doing the program, it gives us a significantly lower rate than we were being offered elsewhere. They were polite, compassionate, patient, and really worked to get us the loan (I suspect strings were pulled; I don't think our income level would normally qualify us, but with the money from my folks' land sale, we were able to put forward a good down, and that helped.)

So you saved us somewhere in the hundreds of thousands of dollars over the next thirty years. We totally owe you.

Thank you!

So the govt. passed a law saying the minimum payment had to be higher (4% now?)

Um, not a law, technically. More like informal pressure from the regulators, based on the reasoning that credit card debt is revolving debt which should, well, revolve. Which, incidentally, got criticized in the media because not all cardholders could handle the higher payments.

I suspect another factor in the mortgage mess is that mortgages got a lot more complicated in the last few years. Option ARMs, Interest Only, and the like didn't really exist 5-10 years ago. Plus a culture that says owning your own home is one of the fundamental elements of success. Even ARMs only came into being 25-30 or so years ago.

Isn't that what having a lawyer is for? I mean, I'm sure I don't understand the whole dealio, never having done it myself, but that's why you have agents to represent you and stuff, right?

People using subprime loans don't have the money for a lawyer. They have to hope their Realtor and loan officer are ethical.

(My risk-comfort, for mortgages, is something akin to the old "my income 3x". I told this to my now-condo-owning Flatmate, and she said, three weeks before the current crisis, "Oh, that's outdated now. You can borrow more than that.")

Lenders use front and back end debt to income ratios to qualify someone for a mortgage. It tells them how much your maximum house payment can be. 38 is a pretty comfortable ratio. Any higher and you'd better have stellar credit and payment history and your current housing payment should be more than your mortgage payment would be.

We didn't have a lawyer, but we did read every piece of the zillion pieces of paper a million times. Luckily, our mortage broker was a high school friend of a friend and when we said Fixed Rate and here's our limit, got us that loan, even though the ARM loans had lower interest rates.

For $500 a month that car had better give good road head while I'm listening to my books on tapes on the long drives

looks at my 2006 Honda Civic. looks at my latest payment statement of $507 from Honda Finance. looks back at my Civic--nope, still no provisions of oral sex. looks into refinancing with my bank since my credit rating has improved since buying the car.

Who's the dummy with the $1200/mo. car payment that averages out with my old $100/mo. one?

points to former clients at BMW dealership in LA.

They have to hope their Realtor and loan officer are ethical.

And I'll bet a lot don't know that most real estate agents represent the seller and not the buyer.

I must admit that I get a kick out of the letters we get regularly telling us how we can refinance to get this great low rate -- which is about 0.50% higher than the rate we now pay on our 30-year fixed.

He nationally syndicated?

If you look down the right-hand side column here: [link] you can get a whole list of stations that carry him and when, and links to stream them.

His book, The Total Money Makeover is pretty basic, but it has good charts in the back for budgeting. I think you can also access them on his website, but I did need the book to figure out exactly what he meant by the "debt snowball" for example.

When I lived in CO, our real estate agent was allowed to perform the duties a lawyer might normally do, although I still had a lawyer (not me!) there. A title company handled that closing.

When we closed on our house in NC, a lawyer does the actual closing, but I triple checked that she was representing us, and not both parties, or something like that. [eta: I wrote this before seeing Fred's comment, but I'm curious why the buyer wouldn't have their own agent. When we sold our NC home, the buyer's agent was another agent from our agent's company and I had to sign extra paperwork to okay that, after a very detailed and specific warning from our realtor about the risks involved.]

Do people buy houses with at least real estate agents? I think our agent in CO was crucial towards steering us towards a reputable mortgage company.