Getting the best terms and rates on your mortgage depends on how well you understand the process and your ability (as well as that of your real estate agent) to negotiate. The following points will help you understand the mortgage process and know what to look out for when obtaining home loan financing.

First, keep in mind that no two loans or borrowers are exactly alike. Everyone has a unique credit score/file, income, borrowing history, etc. Just because your neighbor or friend received a certain rate or program does not mean that you will also be able to qualify for such a program.

You may not be aware that the real estate business structure has changed significantly over the past thirty years, and particularly over the last ten. In the past, brokerages would front the majority of the costs of marketing the properties and concentrated on selling their own listings first and foremost. Real estate agents could only sell the listings that their company offered. If you decided to employ a Re/Max agent you would only be able to purchase Re/Max listed homes, making the selection much smaller. The real estate agent just acted as a bystander and assisted in completing the brokerage’s function with no real input regarding the marketing/advertising of the property. The reputation of the real estate brokerage hinged upon the quantity of its listings, the selling price of its listings, and how quickly that particular brokerage was selling the homes they had listed.

Tucson AZ has just been selected by a publicly traded company — Stanley, Inc. (NYSE: SXE) — a leading provider of systems integration and professional services to the US federal government. Stanley, Inc. will be building and managing a secure passport production center in Tucson AZ for the U.S. Department of State. The company will immediately begin construction of the secure facility with production operations expected to begin in spring of 2008. Stanley will hire more than 150 full time and part time employees in the next 12-18 months.

With all the resetting of ARM’s and the generally bad market conditions across the country, the mortgage companies that were raking in billions upon billions during the boom are now losing billions. This is a real threat to the whole economy. If it persists or gets worse, it could easily lead the country into a recession. The banks and mortgage companies have no clue how to stop the bleeding. As more ARM’s reset, fewer borrowers can afford the mortgage, and since the real estate market is so competitive, they are having a very difficult time selling as well. The only thing left for these borrowers is a foreclosure or a bank-granted “short sale,” either of which costs the lender tens of thousands. A foreclosure especially eats up money due to attorney’s fees and the condition of the property after a foreclosure has occurred.

I have been helping several investors acquire these types of properties in recent months and cannot believe what some of these properties are being listed and ultimately sold for. Right now, I was just looking at a property in Rancho Sahuarita — a home over 2300 square feet — listed at $195k, and it was in amazing condition. The same home 24 months ago would have easily sold fast at $250k and maybe more. This market decline has obvious causes: less availability of loans for buyers, excess inventory levels, and, in my opinion, a major psychological shift. People are running away from real estate, and the market is starting to show it. While amazing deals are still difficult to come by, they are starting to show up.