There are two primary reader audiences for “Real Estate Debt Can Make You Rich” by mortgage broker Steve Dexter. The first group of readers will be savvy home buyers and real estate agents who want to learn the inner-secret workings of the home mortgage industry. The second group of readers are real estate investors who not only need to learn how mortgage loans are originated but also how “good debt” can be created to maximize profits.

“I am a merchant of debt. I have been putting people in debt for 15 years,” Dexter reveals as he shares how the mortgage brokerage industry works and why consumers and investors need to understand its pros and cons. “You need mortgage debt, not consumer debt,” the author explains as he begins this one-of-a-kind “how to get a mortgage” book.

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The author is an experienced mortgage broker, who says there is a mortgage for virtually every real estate finance situation. He advises, “Therefore, you have two choices in life: you can either pay taxes or buy real estate.” Then he proceeds to explain how owning real estate leveraged with mortgages can lead to long-term wealth.

Along the way, the author even admits his first real estate adventure was less than successful before he learned what to buy and how to finance it. Then Dexter shares how to avoid real estate mistakes, such as buying the right personal residence and the right investment property.

Of course, that takes borrowed money and that is where the author’s expertise shines as he explains how to obtain the best mortgage and avoid what he calls “inexperienced or inept loan hacks.”

The author’s personality comes through as he emphasizes how savvy mortgage brokers work with dozens of mortgage lenders to meet their underwriting requirements without burdening the borrowers. Dexter shares the good and bad of so-called “no doc” or “stated income” mortgages where there is little or no paperwork in return for a slightly higher interest rate.

“What you owe today is what you will be worth tomorrow” is the book’s theme. By that the author means if you manage your real estate debt wisely, maximize your income tax savings with home ownership and real estate investments, your net worth will eventually become at least what you owe today on your mortgages.

Dexter doesn’t hesitate to explain how a mortgage broker’s skill comes into play in obtaining the best mortgage for the borrower’s situation. More important, he shares how some incompetent or inexperienced mortgage brokers take advantage of borrowers. “The other part of the answer is greed. The higher rate you get when the loan closes, the more profit the loan officer makes,” he reveals.

An especially interesting benefit of the book is the author shows how to read a mortgage lender’s rate sheet. He shows how extra costs are added to the basic mortgage interest rate, such as for a 100 percent mortgage, manufactured homes, low FICO score, very low or high mortgage amount, and cash-out refinancing.

The author answers typical home borrower questions about fixed- and adjustable-rate-mortgage pros and cons, interest-only loans, so-called “option mortgages,” and various other mortgage borrower choices. Dexter also shares why he thinks APRs (annual percentage rates) are worthless for comparing mortgages.

Of course, the author is prejudiced in favor of mortgage brokers who offer many loan types from different lenders, as compared to direct lenders who offer only that lender’s in-house loan products.

The book winds up with several chapters aimed at real estate investors, especially those who elect to hire professional property managers. Dexter explains how to be your own property manager, including how to manage your tenants successfully.

Chapter topics include “Why Lenders Love Paper, or How Many Trees Have to Die for My Loan?” “Best Times to Use Each Loan”; “Should I Refinance My Property?” “Using Lines of Credit to Enhance Your Wealth and Lifestyle: How to Avoid the Pitfalls”; “The Three P’s: Piggyback Loans, Private Mortgage Insurance (PMI) and Prepayment Penalties”; “Should I Lock in My Interest Rate?” “How to Stay in Control and Not Get Ripped Off”; “The Top 16 Mistakes Real Estate Investors Make and How to Avoid Them”; and “50 Questions to Ask Real Estate Agents and Property Managers.”

The list of real estate Internet Web sites is the best and most complete I have ever seen in a book. That goldmine list is worth many times the book’s modest price.

Most books about getting a mortgage are boring and very basic. This one is different because it reveals mortgage-lending secrets most home buyers, realty agents and investors have never heard before. On my scale of one to 10, this superb new book rates an off-the-chart 12.

“Real Estate Debt Can Make You Rich,” by Steve Dexter (McGraw-Hill, New York), 2006, $21.95, 156 pages; Available in stock or by special order at local bookstores, public libraries, and www.Amazon.com.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

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