Mortgages for Dummies (ISBN - 0470379960) PDF
Preview Mortgages for Dummies (ISBN - 0470379960)
by Eric Tyson, MBA, and Ray Brown Authors of Home Buying For Dummies Mortgages FOR DUMmIES ‰ 3RD EDITION 01_379967-ffirs.indd iii 01_379967-ffirs.indd iii 9/3/08 12:07:40 AM 9/3/08 12:07:40 AM 01_379967-ffirs.indd vi 01_379967-ffirs.indd vi 9/3/08 12:07:43 AM 9/3/08 12:07:43 AM More Bestselling For Dummies Titles by Eric Tyson Investing For Dummies® A Wall Street Journal bestseller, this book walks you through how to build wealth in stocks, real estate, and small business as well as other investments. Personal Finance For Dummies® Discover the best ways to establish and achieve your financial goals, reduce your spending and taxes, and make wise personal financial decisions. Wall Street Journal bestseller with more than 1 million copies sold in all editions and winner of the Benjamin Franklin best business book award. Taxes For Dummies® The complete, best-selling reference for completing your tax return and making tax-wise financial decisions year-round. Tyson coauthors this book with tax experts David Silverman and Margaret Munro. Home Buying For Dummies® America’s #1 real estate book includes coverage of online resources in addition to sound financial advice from Eric Tyson and frontline real estate insights from industry veteran Ray Brown. Also available from America’s best-selling real estate team of Tyson and Brown — House Selling For Dummies and Mortgages For Dummies®. Real Estate Investing For Dummies® Real estate is a proven wealth-building investment, but many people don’t know how to go about making and managing rental property investments. Real estate and property management expert Robert Griswold and Eric Tyson cover the gamut of prop- erty investment options, strategies, and techniques. Small Business For Dummies® Take control of your future and make the leap from employee to entrepreneur with this enterprising guide. From drafting a business plan to managing costs, you’ll profit from expert advice and real- world examples that cover every aspect of building your own busi- ness. Tyson coauthors this book with fellow entrepreneur Jim Schell. 01_379967-ffirs.indd i 01_379967-ffirs.indd i 9/3/08 12:07:24 AM 9/3/08 12:07:24 AM Praise for Eric Tyson’s national best- selling personal finance guides: “Personal Finance For Dummies is the perfect book for people who feel guilty about inadequately managing their money but are intimidated by all of the publications out there. It’s a painless way to learn how to take control.” — National Public Radio’s Sound Money “Smart advice for dummies . . . skip the tomes . . . and buy Personal Finance For Dummies, which rewards your candor with advice and comfort.” — Newsweek “Eric Tyson is doing something important — namely, helping people at all income levels to take control of their financial futures. This book is a natural outgrowth of Tyson’s vision that he has nurtured for years. Like Henry Ford, he wants to make something that was previously accessible only to the wealthy accessible to middle-income Americans.” — James C. Collins, coauthor of the national bestseller Built to Last; Lecturer in Business, Stanford Graduate School of Business “You don’t have to be a novice to like Mutual Funds For Dummies. Despite the book’s chatty, informal style, author Eric Tyson clearly has a mas- tery of his subject. He knows mutual funds, and he knows how to explain them in simple English.” — Kiplinger’s Personal Finance Magazine “Eric Tyson . . . seems the perfect writer for a For Dummies book. He doesn’t tell you what to do or consider doing without explaining the why’s and how’s — and the booby traps to avoid — in plain English.” — Chicago Tribune “Worth getting. Scores of all-purpose money-management books reach bookstores every year, but only once every couple of years does a stand- out personal finance primer come along. Personal Finance For Dummies, by financial counselor and columnist Eric Tyson, provides detailed, action-oriented advice on everyday financial questions. . . . Tyson’s style is readable and unintimidating.” — Kristin Davis, Kiplinger’s Personal Finance Magazine “For those named in the title, such as myself, Personal Finance For Dummies is a godsend. It’s bright, funny, and it can save you money, too.” — Los Angeles Times 01_379967-ffirs.indd ii 01_379967-ffirs.indd ii 9/3/08 12:07:40 AM 9/3/08 12:07:40 AM by Eric Tyson, MBA, and Ray Brown Authors of Home Buying For Dummies Mortgages FOR DUMmIES ‰ 3RD EDITION 01_379967-ffirs.indd iii 01_379967-ffirs.indd iii 9/3/08 12:07:40 AM 9/3/08 12:07:40 AM Mortgages For Dummies®, 3rd Edition Published by Wiley Publishing, Inc. 111 River St. Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2008 by Eric Tyson and Ray Brown Published by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, 317-572-3447, fax 317-572-4355, or online at http:// www.wiley.com/go/permissions. Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book. LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER AND THE AUTHOR MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITH- OUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OR OTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. THE FACT THAT AN ORGANIZA- TION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCE OF FURTHER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSES THE INFORMATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE. FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN IT IS READ. For general information on our other products and services, please contact our Customer Care Department within the U.S. at 800-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002. For technical support, please visit www.wiley.com/techsupport. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Control Number: 2008935812 ISBN: 978-0-470-37996-7 Manufactured in the United States of America 10 9 8 7 6 5 4 3 2 1 01_379967-ffirs.indd iv 01_379967-ffirs.indd iv 9/3/08 12:07:42 AM 9/3/08 12:07:42 AM About the Authors Eric Tyson is a syndicated personal finance writer, lecturer, and counselor. He is dedicated to teaching people to manage their personal finances better. Eric is a former management consultant to Fortune 500 financial service firms. For more than 25 years he has successfully invested in securities as well as in real estate, and has started and managed several businesses. He holds a bachelor’s degree in economics from Yale and an MBA from the Stanford Graduate School of Business. An accomplished freelance personal finance writer, Eric is the author of five other national bestsellers in the For Dummies series: Home Buying (coauthor), Personal Finance, Investing, Mutual Funds, and Taxes (coauthor). His work has been featured and praised in hundreds of national and local publications, including Newsweek, Kiplinger’s, The Wall Street Journal, Money, Los Angeles Times, Chicago Tribune, and on Fox, NBC’s Today Show, PBS’s Nightly Business Report, CNN, The Oprah Winfrey Show, ABC, CNBC, Bloomberg Business Radio, CBS National Radio, and National Public Radio. Eric has counseled thousands of clients on a variety of personal finance, investment, real estate, and mortgage quandaries and questions. In addition to maintaining a financial counseling practice, he is a popular speaker on important personal finance topics. Ray Brown, coauthor of the national bestseller Home Buying For Dummies, is a veteran real estate broker with over three decades of hands-on experience. A former vice president and manager for Coldwell Banker Residential Brokerage Company and McGuire Real Estate, and founder of his own real estate firm, the Raymond Brown Company, Ray is currently a writer, radio talk show host, and public speaker on residential real estate topics. Ray believes that most people are pretty darn smart. When they have problems, it’s usually because they don’t know the right questions to ask to get the information they need to make good decisions. This book completes Ray’s residential real estate trilogy and fulfills his dream of helping folks find their way through the often mystifying process of buying, financing, and selling their homes. On his way to becoming a real estate guru, Ray worked as the real estate analyst for KGO-TV (ABC’s affiliate in San Francisco) and was a syndicated real estate columnist for The San Francisco Examiner. For 16 years he hosted a weekly radio program, Ray Brown on Real Estate, for KNBR. In addition to his work for ABC, Ray has appeared as a real estate expert on CNN, NBC, CBS, and in The Wall Street Journal and Time. Ray’s most important accomplishments, however, remain Jeff and Jared, his incomparable sons, and 43 years of nearly always wedded bliss to the always 01_379967-ffirs.indd v 01_379967-ffirs.indd v 9/3/08 12:07:43 AM 9/3/08 12:07:43 AM wonderful Annie B. Last, but far from least, he’s delighted that Jeff’s wife, Genevieve, and his grandson, Aidan Joseph Brown, have joined the family. 01_379967-ffirs.indd vi 01_379967-ffirs.indd vi 9/3/08 12:07:43 AM 9/3/08 12:07:43 AM Dedication This book is hereby and irrevocably dedicated to my family and friends, as well as to my counseling clients and customers, who ultimately have taught me everything I know about how to explain financial terms and strategies so that all of us may benefit. —Eric Tyson This book is lovingly dedicated to Annie B., who’s too marvelous for words. Still. —Ray Brown Authors’ Acknowledgments We offer our heartfelt thanks and appreciation to the many good people at Wiley, including Mike Baker for wanting to keep this book current and the best, Chad Sievers for his fine project management skills, and Sarah Faulkner for her helpful editing suggestions. We also wish to express our deepest thanks and appreciation to our friend and colleague Ken Scholen, Director of AARP’s Reverse Mortgage Education Project for his invaluable help with the reverse mortgage chapter. Craig Watts deserves equally high accolades for the fountainhead of facts and figures he graciously contributed to the credit scoring chapter. We owe an enormous debt of gratitude to our brilliant technical reviewer, Dennis Hart, an extraordinary mortgage professional who toiled long hours to ensure that what we wrote was actual and factual. Dennis was most ably aided and abetted by Vicky Jones and Shannon Furr. Nor can we forget Chris Bruno, who provided additional expertise for which we are eternally grateful. Ray also thanks Ray Britton, Dennis Hart, Esty Lawrie, and Russ Marinello, four exceedingly street-smart lenders who graciously taught him 99.724 percent of what he knows about the practicalities of getting loans approved. It would be wrong not to give huge thanks to Ray’s pal, Jim Fabris, for 30 years of wise counsel and unwavering support. 01_379967-ffirs.indd vii 01_379967-ffirs.indd vii 9/3/08 12:07:43 AM 9/3/08 12:07:43 AM Publisher’s Acknowledgments We’re proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/. Some of the people who helped bring this book to market include the following: Acquisitions, Editorial, and Media Development Project Editor: Chad R. Sievers (Previous Edition: Natalie Harris) Acquisitions Editor: Mike Baker Senior Copy Editor: Sarah Faulkner (Previous Edition: Jennifer Bingham) Assistant Editor: Erin Calligan Mooney Technical Editor: Dennis Hart Editorial Manager: Michelle Hacker Editorial Assistants: Joe Niesen, Jennette ElNaggar Cover Photos: © moodboard/Corbis Cartoons: Rich Tennant (www.the5thwave.com) Composition Services Project Coordinator: Kristie Rees Layout and Graphics: Reuben W. Davis, Melissa K. Jester, Christin Swinford, Christine Williams Proofreaders: Laura Albert, Evelyn C. Gibson, John Greenough, Caitie Kelly Indexer: Valerie Haynes Perry Publishing and Editorial for Consumer Dummies Diane Graves Steele, Vice President and Publisher, Consumer Dummies Kristin Ferguson-Wagstaffe, Product Development Director, Consumer Dummies Ensley Eikenburg, Associate Publisher, Travel Kelly Regan, Editorial Director, Travel Publishing for Technology Dummies Andy Cummings, Vice President and Publisher, Dummies Technology/General User Composition Services Gerry Fahey, Vice President of Production Services Debbie Stailey, Director of Composition Services 01_379967-ffirs.indd viii 01_379967-ffirs.indd viii 9/3/08 12:07:43 AM 9/3/08 12:07:43 AM
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