Mortgage Magic II

We were asked yet another question about mortgages that I'm sure would really help anyone who knew the answers. Now let's get ready to rumble!

Dear Munnybagz,
I was just wondering if you could tell me how to negotiate a better mortgage, because I am sick of always having to pay off interest instead of the base mortgage. Please help me!
Mad at Mortgage

Dear Mad,
Although you may hate your mortgage rate, you have to realize that mortgages have the lowest interest in comparison to all the other loans. But there are a few tricks and tips that can help you get the best deals.

• hunt around for mortgages at different banks or go to websites that compare mortgages.(such as mortgageshark.com)
• when you're talking to a bank about a mortgage and you're not sure whether or not you're getting the best rate, ask them what they're best rate is, because you found a bank that gives a very good mortgage rate.
• remember, banks always make money off your mortgage, no matter how little they charge. But the higher mortgage rate, the more they make, so if you tell them that another bank has 4.5 %, they will try to go better than that to get your business.

That should help you a little bit, Mad, and anyone else who wants a better rate. Stay tuned for our next episode, and send in your questions!

Munnybagz

The Talk Show Continues!

We have received a comment since our last show, regarding our last show! Let's answer Anonymous' question, shall we?

Anonymous:
Hey, I was just wondering how this method would work, When you are that far in debt (150,000) the bank usually does not allow you to take out a loan, let alone a second mortgage, Please answer my question!

Good question, anonymous! However, banks will allow you to take out a second mortgage. I do realize that they would question that you already have a mortgage along with your debt. In this case, you can show them your scenario being this:
Your house is worth 500,000 dollars, but your mortgage is still 200,000 dollars. Therefore, after selling your house and repaying your mortgage and your bad debt*, you still have 150,000 dollars in equity. So let's say you want to buy a house costing 400,000 dollars. If you get the mortgage and manage to pay off 50,000 dollars of it with rent before the tenants leave and none want to rent, you have two choices. Sell your first house, get rid of all your other debts and continue to pay your mortgage with your remaining 150,000, or sell your second house, (probably worth about 500,000 dollars by now) and pay off your second mortgage (350,000 dollars) along with your bad debt. That way you only have your mortgage to worry about!
That hopefully should answer your question, Anonymous. To sum it up, figure out a good scenario to present to the bank, along with proving you have equity, just in case.
Munnybagz


*Bad debt is when you borrowed to buy something that deteriorates in value, like a car, or fancy dinners, anything like that. Good debt is when you borrow to buy something that will increase in value, such as your home.

Aaaaaaand... We're Back on Air!

Sorry about the delay, folks but we were having some technical difficulties. Let's get back to the show!
Caller 1, you're on the air!

Ya, hi, I'm over 150,000 in debt, not including my mortgage. I'm fearing that I'll have to give up my lifestyle and everything I own. Is there anything I can do?


Well, I do have one piece of very good advice, find a really tall building... No, I'm just kidding! but seriously, the one thing you can do to take evasive action on that kind of debt is to, hold your applause, go further into debt! Ya, as crazy as it sounds, if you go another 300,000 dollars in debt and buy a condo, you can rent it out and slowly pay of that debt, plus the mortgage with the rent. And once you're almost out of your financial rut, you can sell the condo for a profit and be completely debt free! But you'd have to show the loaner that you have a solid plan to repay both debts. But if you're looking for something more immediate, the only thing there is to do is work harder, spend less, or take the easy way out by borrowing money from someone that trusts you for no interest, then pay them off without worrying about growing debt from interest.
That's all the time we have today, but send in your problems and/or questions to munnybagz@yahoo.ca and we'll answer them tomorrow! (unless i don't get any questions to write about)