TODAY | July 23, 2013
>> 101. everything you need to know about mortgages. prices hit a five year high. so if you're in the market, what should you do? mike aubrey is the host of agt hgtv's power broker .
>> good morning.
>> mel b. pays for her properties in cash.
>> everything. right out of the briefcase.
>> let's bottom line this first, housing still a good investment.
>> absolutely. historically it's always provided a return. you can't look back at the last ten years and say that's what the housing market is. it's always been a good investment.
>> if i want a mortgage , what's my biggest challenge?
>> the very very tenuous underwriting standards. that has swung all the way from if you could fog up a piece of glass somebody could give you money to now even people with great credit and good assets are being put through the ringer.
>> is it arbitrary the way they're doing it? or how do i know if i'll be okay getting a mortgage .
>> know your credit worthiness . what's your credit score ? 10%? 20%. if you have a butt load of cash you're fine. you can get the mortgage .
>> i don't.
>> you can back up a u-haul full of cash. so you have a mortgage tool kit.
>> yeah. be ready going in. you can't go into a lender and say i have a job. give me the mortgage and they say fine. have all of your documentation together. have your w-2s, your tax statements, bank statements , credit card statements.
>> you have to be really prepared.
>> have it ready. if you do that first the process is so much easier than if they started telling you what you need and then you go find it.
>> mike there's a bunch of places gouk. a major bank, a local bank or go online. what's are the distinctions and advantages.
>> major banks have a comfort level that come with them. we all noels, city, places like that. i think what you get back often is it takes a lot longer to get the loan done because more people are applying with them. when you go to local banks, you'll get more aggressive rates and see things go a little faster and you might have more one-on-one service.
>> do you like the idea of finding a mortgage online.
>> it's a great tool. you can do it to find your hotel fa fares and plane fares but you have to be careful. they're going to flash up a rate and it's going to be a rate that only the person with the most perfe perfect credit will go. so read the fine print but it's a great way.
>> there's a distinction between mortgage , 30 year, 15 year fixed rate but also adjustable rate mortgages . how do i know which is best for me?
>> i think the big distinction is a fixed-rate mortgage is what it says. the rate that goes the life of the loan. whether it's over 30 or 15 depends which one you want to do. adjustment rate mortgage is based on a benchmark. after a period of time it will change. it can be a great mortgage depending on how long you'll stay in the house.
>> yeah. rates are lower. it's funny because for a long time people were doing adjustable rate mortgages and doing them a lot during the housing boom and it went from a three letter word to four letter word because everybody thinks arms are so blame. it's a great product as long as you know how long you're going to be in the house. if you're in the house 20 years it's not for you because you don't know what the rate is going to be. if you're in it for five years it's perfect because you get a lower rate.
>> good advice. you ready now.
>> i'm ready to do it. i'm going to make that jump.
>> mike and diana, thank you so much. power broker premieres tonight on hgtv at 9:00 eastern time . coming up next,