Title: "Mortgage Confidential: What You Need to Know That Your Lender Won’t Tell You" (Second Edition)
Author: David Reed
Publisher: AMACOM, 2010; 233 pages; $17.95
The phrase "knowledge is power" was long ago taken way beyond its logical extreme. Fact is, when it comes to matters of money and, specifically, mortgage, too much knowledge for its own sake can be overwhelming and impair decision-making, rather than empowering wise decisions.
My experience has been that homeowners who spend too much of their mortgage education bandwidth trying to understand the complexities and inner workings of the wholesale mortgage securities market are inspired to pay the bankers back for their sinister dealings and rage against the Wall Street machine.
On the other extreme, there are some key, oft-ignored need-to-knows that can and do empower homebuyers and homeowners to make strategic and smart mortgage decisions.
David Reed, in his book "Mortgage Confidential: What You Need to Know That Your Lender Won’t Tell You," makes it his personal mission to disseminate these need-to-knows and use them to direct the actual mortgage choices that real-world consumers are faced with making in their real lives.
This book’s province is not everything about mortgages — it’s only what you need to know.
That simple mission is carried through in the simple style and tone of "Mortgage Confidential." Inside, it comes off as less us vs. them than one might guess from the title, and much more plain-talking, straight-shooting education, plus what to do with the knowledge.
Reed starts off covering where mortgage loans really come from, with a chapter full of myth-busting about banks, brokers, how loans are bought and sold, and by whom, plus what that means to you, the consumer: Odds Are, Your Mortgage Will Be Sold.
But where Reed excels is in having a deep knowledge of how things that consumers find irritating, like having their mortgage sold from one lender to another, can also ultimately help them: "the very fact that your loan can be sold in the first place yields a greater benefit: lower rates."
Reed is all about the nuance — not the reactive, faux-pro-consumer outrage at the petty inconveniences and potential crookedness of some mortgage industry workings, but sharing the deeper insights at how sometimes things that seem to be against a borrower’s best interests actually work in their favor overall, and vice versa.
He doesn’t devote the whole book to plumbing the depths of the mortgage marketplace, but he does seem very familiar with them, so that he can share these insights and help readers understand what lies beneath the surface motivations of bank, broker, lender and beyond.
Reed goes on to cover the mortgage loan process, risk factors, closing costs, interest rates, choosing and refinancing mortgage loans, and obtaining a mortgage to buy or build a new home.
And along the way, he answers abundantly relevant questions that people you and I know are faced with every single day, like how to get the lowest mortgage rates, how to use the new disclosure laws to negotiate lower loan fees, and how to refinance your home when its value has dropped. (Who doesn’t know someone seeking the answer to that last question?)
If you have mortgage questions, or are making mortgage decisions but are overwhelmed by all the irrelevant mortgage information out there, consider tapping into the need-to-knows in "Mortgage Confidential" — it will save you time, and maybe preserve some of your sanity, in the process.