But, It’s Paid for doesn’t mean it’s free and clear. I remember my father always telling me, nothing is free, you will always owe someone or somebody something. Never think it’s all yours and its free. Free is the most missed used word that you will hear. So, watch out for those that say free.

Yes, I must have heard that with what seems like a million times from my father. Since then, every time I hear the word free I am always looking for that catch or gotcha, when and where is it going to come from, what did I miss?

I can tell you that I hear this from someone at least once a week, “It’s all mine, I own it free and clear”.  For me as a mortgage broker I am the one who always has to tell someone, no it’s not free and clear. This is a pretty common statement made by most who own any type of real estate without a mortgage loan. Every week it’s a different person but their response is always the same as the people before them. “But, it’s paid for I have no debt”

Some where along the way you paid for that property so it’s not free. It maybe clear of a mortgage loan but it’s not clear of debt. Every property owner has to pay taxes on their property, there is a tax bill attached to every property. We can also look at insurance on the property as a debt and if in a home-owners association we can add that HOA fee or Condo fee too.

No matter how you spin it, you will need to include any real estate owned into your debt to income ratios. Save yourself some time and money, provide all the information you have or can get about any type of real estate you own. It will all show up in the process and knowing it upfront can help a great deal on getting a very accurate pre-qualification letter.

Disclose everything, ask questions, get your facts, get properly prepared and we will see you at a happy closing table.