How real estate debt can make you rich

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

“I am a merchant of debt. I have been putting people indebt for 15 years,” Dexter reveals as he shares how the mortgage brokerageindustry works and why consumers and investors need to understand its pros andcons. “You need mortgage debt, not consumer debt,” the authorexplains 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 thereis a mortgage for virtually every real estate finance situation. He advises,”Therefore, you have two choices in life: you can either pay taxes or buyreal estate.” Then he proceeds to explain how owning real estate leveragedwith mortgages can lead to long-term wealth.

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

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

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

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

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

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

The author answers typical home borrower questions aboutfixed- 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 worthlessfor comparing mortgages.

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

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

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

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

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

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

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

Copyright 2006 Inman News

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