Roger Schlesinger

The mortgage industry is not your uncle Charlie’s, nor your fathers, because of the monumental changes that have occurred over the last decade or so.  I will outline some of the big ones that can really create havoc in your life, and hopefully you will cancel those pending plans.

Cash Out

1.  You can pull as much cash out of your house as the lender will allow but anything over $100,000 that doesn't go to improving the house, the interest on the overages is not deductible.

2.  You cannot deduct any interest on amounts of $1,000,000 plus $100,000 or higher regardless of the use.

3.  If you pull cash out of your house to buy Treasury notes, bills or bonds you cannot deduct the interest on that money.

FHA & VA Loans

1.  Both FHA and VA loans are assumable.  As a seller you can pass the loan as it exists, dollar amount and interest rate to a qualified borrower. This goes for fixed or variable loans.

2.  All FHA loans that are originated now have mortgage insurance on any loan that amortizes over 15 years for the life of the loan. The FHA 15 year loan has mortgage insurance for 11 years.

3.  VA loans do not require mortgage insurance but are only available to veterans or active duty military for personal residences, as long as they do not have a current VA loan outstanding for themselves.  They can have other VA loans outstanding that have been assumed.

4.  FHA and VA loans are eligible for streamline refinances as long as they have made their payments on time and have a lower balance than their original loan.

Loan Payments

1.  A 15 year loan pays off twice as fast as a 30 year loan but doesn't cost twice as much.  Not even close.  This should tell you that this is an excellent choice.

2.  The magic behind a bi-weekly mortgage is not that you pay the mortgage every two weeks but the fact that you are making 13 payments a year (26 half payments).  The extra payment is spread out over the 26 payments and if you just made an additional payment at the beginning of each year it would help you amortize (pay down) the loan quicker and faster.

Roger Schlesinger

Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.