Predatory mortgage lending involves a wide array of abusive practices. I've touched on a few of the most common unethical practices. Become familar with these techniques and protect yourself and your family. Knowledge is Power!
Excessive Fees
Points and fees are costs not directly reflected in interest rates. Because these costs can be financed, they are easy to disguise or downplay. On competitive loans, fees below 1% of the loan amount are typical. On predatory loans, fees totaling more than 5% of the loan amount are common.
Abusive Prepayment Penalties
Borrowers with higher-interest subprime loans have a strong incentive to refinance as soon as their credit improves. However, up to 80% of all subprime mortgages carry a prepayment penalty -- a fee for paying off a loan early. An abusive prepayment penalty typically is effective more than three years and/or costs more than six months’ interest. In the prime market, only about 2% of home loans carry prepayment penalties of any length.
Kick backs to Brokers
When brokers deliver a loan with an inflated interest rate (i.e., higher than the rate acceptable to the lender), the lender often pays a “yield spread premium" -- a kickback for making the loan more costly to the borrower.
Loan Flipping
A lender "flips" a borrower by refinancing a loan to generate fee income without providing any net tangible benefit to the borrower. Flipping can quickly drain borrower equity and increase monthly payments -- sometimes on homes that had previously been owned free of debt.
Unnecessary Products
Sometimes borrowers may pay more than necessary because lenders sell and finance unnecessary insurance or other products along with the loan.
Mandatory arbitration
Some loan contracts require "mandatory arbitration," meaning that the borrowers are not allowed to seek legal remedies in a court if they find that their home is threatened by loans with illegal or abusive terms. Mandatory arbitration makes it much less likely that borrowers will receive fair and appropriate remedies in cases of wrongdoing.
Steering and Targeting
Predatory lenders may steer borrowers into subprime mortgages, even when the borrowers could qualify for a mainstream loan.Vulnerable borrowers may be subjected to aggressive sales tactics and sometimes outright fraud. Fannie Mae has estimated that up to half of borrowers with subprime mortgages could have qualified for loans with better terms. According to a government study, over half (51%) of refinance mortgages in predominantly African-American neighborhoods are subprime loans, compared to only 9% of refinances in predominantly white neighborhoods.
The information in this article was researched through data collected under the Home Mortgage Disclosure Act (HMDA). The data came from the 8,850 lenders covered by the act and involved over 30.2 million home loan applications.
The reason behind the article was to determine patterns in high-priced lending. High-priced loans are described as those with an interest rate that is higher by a certain number of basis points above a threshold amount defined by Regulation C of the HMDA.
The mortgage market has changed a lot over the last decade and this has impacted the level of higher-priced loans in an interesting way. Ten or so years ago consumers had a limited selection of mortgage products and prices varied as dictated by a quite different set of variables than those in place today. Rates and prices were not determined by the creditworthiness of the borrower but by loan type (conventional or government backed) the amount borrowed, owner occupancy, loan term, and the quality of the collateral (stick built homes vs. manufactured housing; loan to value ratio.) Those borrowers who fell on the wrong side of these criteria were not charged higher prices; they just didn't get the loan.
Today, however, lenders price loans primarily on risk so that differences in the creditworthiness of borrowers can mean different prices for the same product. "Applicants who are less creditworthy or who are unwilling or unable to document their creditworthiness or income are increasingly less likely to be turned down for a loan; rather they are offered credit at higher prices."
This has expanded homeownership opportunities but has led to a segmented credit market where borrowers fall into three categories; prime borrowers, i.e. those who always got credit and now get the best deals, and "subprime" or "near prime" borrowers. Those in the subprime category typically pay the highest rate because of the risks they pose; not only a risk that they won't pay on their obligation but that they will be more likely to prepay their mortgages ahead of schedule once they have cleaned up their credit, build up equity or increased their income. These subprime borrowers can also be more costly to service, requiring more monitoring or greater collection efforts. But, the thresholds that separate these market segments can change as market interest rates move, as lenders' appetites for interest rate or credit risk change, as technological improvements allow for more precise risk assessments.
This flexibility in lending, however, carries a lot of concerns about fairness. First, are borrowers being shunted into high-priced loans based on discriminatory criteria such as race or ethnicity? Second, do those persons receiving high-priced loans have the resources (time, information, financial savvy) to shop wisely for their loan, and third, is competition adequate to assure that those borrowers most likely to be extended high-priced products have the full range of credit opportunities.
The report states that the nonprime market has grown dramatically in recent years and quotes one source as saying that, from 1994 to 2005 the dollar volume of subprime loans increased from $35 billion to over $600 billion and subprime loans are now estimated to make up 20 percent of all mortgage originations compared to less than 5 percent in 1994.
Subprime loan originations do not correspond exactly with those loans defined as having prices exceeding the threshold as defined by Regulation C, however the latter increased significantly in 2005 over 2004 figures. For example, the incidence of higher-priced lending for conventional, owner-occupied, first-lien home-purchase loans rose from 11.5 percent in 2004 to 24.6 percent in 2005. This increase, however, was driven in part by the flattening of the yield curve, by the yield curve coupled with an artifact of the way APRs on adjustable rate loans are determined, and borrower or lender-specific changes in the risk characteristics of lending. These changes in risk characteristics were in part because substantial increases in house prices in some parts of the country caused more borrowers to stretch financially to obtain loans.
Analysis of the HMDA data revealed substantial variations in the incidence of higher-priced lending across racial and ethnic lines and the report states that these differences could not be fully explained by information in the HMDA data. Wherever possible analysis included extrapolations from available data as proxies for missing information.
Pay close attention, the 2005 HMDA data indicate that black and Hispanic borrowers are more likely, and Asian borrowers less likely to obtain loans that cost more than the pricing thresholds than are non-Hispanic white borrowers. The gross mean incidence of higher-priced lending for home purchases was 54.7 percent for blacks and 17.2 percent for non-Hispanic whites. When the analysis took into account variables other than race that effect either borrower or lender this 37.5 percentage point difference is reduced to about 10 percentage points. When it comes to refinancing the gross difference between blacks and non-Hispanic whites is 28.3 percent but this is reduced to 6.2 percentage points after controlling for borrower and lender factors.
The study found little difference in pricing when borrowers are distinguished by gender. Sole female borrowers generally have a slightly lower incidence of higher-priced lending than sole male borrowers for home-purchase loans but a slightly higher incidence for refinancing.
Analysis of the HMDA data across several years has indicated that loans are denied at different rates when applicants are grouped by race or ethnicity. 2005 was no exception. For each loan product category, American Indians, blacks, and Hispanic whites had higher denial rates than non-Hispanic whites; blacks generally had the highest denial rates and non-Hispanic whites the lowest; Hispanic whites fall about midway between the two other groups. The denial rates for Asians relative to other ethnic groups varied across loan products.
As with pricing, controlling for other borrower and lender variables reduced the disparity in denial rates. For example, blacks had a gross denial rate for first-lien home purchase loans of 27.5 percent compared to 12.3 percent for non-Hispanic whites. Accounting for income, loan amount, and other borrower-related factors reduces the difference by 3.1 percentage points and adding lender factors to the control reduces the gap to 7.0 percentage points. Refinancing patterns were very similar.
Denial rates were higher for sole male borrowers than sole females but the sizes of the differences were small.
Have You Been Considering a Home Equity Line of Credit?
A Home equity loan has become an easy way to not only pay off other non-deductible debt, but to come up with large amounts of cash for remodeling projects, starting businesses, vacations and more. People have financed college educations with a home equity loan, so your imagination is your only barrier. There are few if any restrictions on a home equity loan because in essence you’re using your own money. With housing markets booming over the last several years, and no definitive end in sight, the higher prices we find attached to our homes has sent the equity soaring too. It’s no longer necessary to gamble in the stock market if you’re looking for large returns: just own a home, and then use a home equity loan to fund your individual needs.
Home equity loans can offer many attractive features, but there are a few things to keep in mind. Be aware that in an inflated market, your homes value could at some point take a dive and you can find yourself in a situation where your loan exceeds your homes worth, particularly if you’ve taken advantage of one of the 100-125% offers you see so often these days. Just be aware that it is never a good idea to use all your appraised equity unless absolutely necessary. Also, try and go with the home equity loan that costs the least. If you’re going to tack on several thousand dollars in fees, then it could really not be worth it. People sometimes get blinded by the prospect of fast cash, and pay these fees without thinking.
The home equity loan is part of an extremely competitive market, and if your credit is okay, or sometimes even not so okay, a direct lender can offer a home equity loan with few if any costs.
Now ask yourself....Is a home equity line of credit right for you?
Wondering how much money can you borrow on a home equity line of credit?
The amount of money depends on factors like:
1. Your monthly income.
2. Your present and past credit ratings.
3. Your outstanding debt.
4. Value of your home equity.
5. The term for which you are taking home credit line of equity.
What's going to happen to mortgage rates?
No one can predict the movement of interest rates accurately. It's relatively safe to predict that rates will rise in 2007, but no one knows how far they will rise and whether the increase will be slow and steady through the year or whether most of the increase will take place in just a few months, with rates being relatively flat the rest of the year.
And the pundits could be wrong -- rates could fall in 2007.
So, should I refinance in 2007? The answer to that depends on many factors. If you want to refinance strictly to get a lower interest rate, you're probably better off doing it sooner rather than later.
There are other reasons to refinance. Some people refinance to get rid of mortgage insurance. Others do it to pay off high-rate home-equity lines of credit and consolidate all that debt into one mortgage loan. Still others look at refinancing as a way to escape rising interest rates on adjustable-rate mortgages, particularly on interest-only and pay-option ARMs.
If you decide to refinance for one of the above reasons, contact me today to discuss all your options and get all the facts. You might find, for example, that it costs more in the long run (but less in the short run) to consolidate all your debt into one mortgage.
Then when should I refinance? Refinance your mortgage when you're ready to do it. In other words, if it makes financial sense to refinance at a certain time, go ahead and do it. Don't wait for rates to fall further. You can't know if you grabbed the rock-bottom rate until after the fact, so don't even try.
When it comes to mortgages, getting a good rate is good enough. The world won't end if you don't get the absolute best rate.
Should I wait before I buy a house? Waiting for home prices to hit bottom is just like waiting for interest rates to reach their nadir. You can't count on timing the market correctly. When you find the right house at an acceptable price, go ahead and get it. If house values in the neighborhood fall after that, well, you didn't buy the house just to sell it a few months later, right? The house is almost assured of appreciating over the next few years, even if its value falls for a while at first.
Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours!
WHEN GOOD ISN'T GOOD ENOUGH, CONTACT THE BEST!
www.bestrealtyatl.com
The myth that only people with excellent credit can get home loans is exactly that, a myth. Loans are given to people with all types of credit. The better your credit the better interest rate you will receive on your loans, but that doesn't mean that bad credit home loans are not made available to people with undesirable credit.
There is some basic information you should know about financing and home loans.
Appraisal Before a lender agrees to issue home loans they must be sure the value property is worth enough to cover the loan balance should you not be able to make the payments. An appraiser will often be sent to the property to assess its value.
Down Payment For first-time Points:A point is 1% of the total amount of a home loan. Let's say you're buying a house for $125,000 and put 20% ($25,000) down. You'll be financing the remaining $100,000. If 2 points are charged on the home loan, $2000 must be paid to the lender. Sometimes the cost is divided between the seller and buyer, by contractual agreement. Interest Rates and Term You'll see some differences in interest rates charged by lenders on bad credit home loans, but all rates tend to rise and fall, sometimes very quickly, based on what's happening with the U.S. and global economies. If you're shopping rates, be sure to notice how many points are being charged. You may see one lender offering a low rate and more points, which means you'll pay more out of pocket initially but have lower payments through the life of the loan. Another lender may have a higher interest rate, making for higher monthly payments, yet fewer points, which will cut your immediate expenditures. Fixed Rate Bad Credit Home Loans If you want to lock in a specific interest rate and have the predictability of a monthly principal-and-interest payment that will never change throughout the term of the loan.Terms Available:The term is how many months or years it will take to pay off the loan completely. The standard term for fixed rate mortgages is 360 months or 30 years. Terms of 15 years and 10 years are also widely available. Adjustable Rate Mortgages This type of loan was created to make it easier to handle the payments in the early years of the loan. It begins with an attractively low interest rate, so the monthly payment is lower than it would be with a fixed rate loan. Then, at specified times, the interest rate will shift up or down, depending on market conditions at the time. Prearranged interest rate caps keep the rate from changing too often or by too much. FHA Loans The down payment is the tough part because it's typically a relatively large sum of money that you have to bring to the table at settlement. Mortgage Insurance To protect a lender's investment against default, most lenders will usually require that you purchase some kind of mortgage insurance if your down payment is less than 20% of the mortgage loan. The premium will be included in your monthly mortgage payments.FHA loans feature lower down payments, made possible by government-backed insurance. Guidelines for acceptable credit ratings and the source of your down payment are also more flexible with FHA loans. Construction/Permanent Loans For those who choose to build a home rather than buy one construction/permanent loans. During the 6 to 9 month construction phase, draws are paid out as the work progresses, based on the percentage of completion. Then, when the house is completed, the loan converts into a traditional mortgage loan without the inconvenience or expense of going through another settlement.
For first-time Points:A point is 1% of the total amount of a home loan. Let's say you're buying a house for $125,000 and put 20% ($25,000) down. You'll be financing the remaining $100,000. If 2 points are charged on the home loan, $2000 must be paid to the lender. Sometimes the cost is divided between the seller and buyer, by contractual agreement.
Interest Rates and Term
You'll see some differences in interest rates charged by lenders on bad credit home loans, but all rates tend to rise and fall, sometimes very quickly, based on what's happening with the U.S. and global economies. If you're shopping rates, be sure to notice how many points are being charged. You may see one lender offering a low rate and more points, which means you'll pay more out of pocket initially but have lower payments through the life of the loan. Another lender may have a higher interest rate, making for higher monthly payments, yet fewer points, which will cut your immediate expenditures.
Fixed Rate Bad Credit Home Loans
If you want to lock in a specific interest rate and have the predictability of a monthly principal-and-interest payment that will never change throughout the term of the loan.Terms Available:The term is how many months or years it will take to pay off the loan completely. The standard term for fixed rate mortgages is 360 months or 30 years. Terms of 15 years and 10 years are also widely available.
Adjustable Rate Mortgages
This type of loan was created to make it easier to handle the payments in the early years of the loan. It begins with an attractively low interest rate, so the monthly payment is lower than it would be with a fixed rate loan. Then, at specified times, the interest rate will shift up or down, depending on market conditions at the time. Prearranged interest rate caps keep the rate from changing too often or by too much.
FHA Loans
The down payment is the tough part because it's typically a relatively large sum of money that you have to bring to the table at settlement.
Mortgage Insurance
To protect a lender's investment against default, most lenders will usually require that you purchase some kind of mortgage insurance if your down payment is less than 20% of the mortgage loan. The premium will be included in your monthly mortgage payments.FHA loans feature lower down payments, made possible by government-backed insurance. Guidelines for acceptable credit ratings and the source of your down payment are also more flexible with FHA loans.
Construction/Permanent Loans
For those who choose to build a home rather than buy one construction/permanent loans. During the 6 to 9 month construction phase, draws are paid out as the work progresses, based on the percentage of completion. Then, when the house is completed, the loan converts into a traditional mortgage loan without the inconvenience or expense of going through another settlement.
Before a lender agrees to issue home loans they must be sure the value property is worth enough to cover the loan balance should you not be able to make the payments. An appraiser will often be sent to the property to assess its value.
Good Things Come To Well Qualified Buyers
THE DEFINITION OF "NOTHING DOWN." In real estate "nothing down" means zero cash from the buyer's pocket. However, it doesn't mean the seller won't receive 100 percent cash for the home. Nothing down really means the buyer is borrowing the entire purchase price. To illustrate, when you read in the newspaper that a commercial property sold for $300,000, do you think the buyer paid $300,000 cash from his savings account? Of course not. Using a combination of a first mortgage, perhaps a second mortgage, plus a bank credit line, the investor-buyer probably didn't even pay the closing costs from his pocket. The same procedures apply to home purchases. BUYING A HOME FOR NOTHING DOWN IS EASY. If you are in the market to buy your personal residence but you are a little "cash-challenged," don't let that stop you from purchasing for zero cash from your pocket, just like the real estate tycoons. The Donald Trumps, John Schaub and the Carlton Sheets of the world. Although not every mortgage lender offers zero-down-payment mortgages, a savvy mortgage broker can arrange your no-cash home purchase. Especially if you are a first-time home buyer (defined as not owning a house or condo within the last two years), most mortgage lenders offer extra-easy home finance plans. But there's a catch. You will need 1) a reliable source of income, and 2) a good credit score. Many lenders now offer "stated income" mortgages where, with good credit, you don't even have to prove your income, such as with W-2s or tax returns. If you qualify, and many home buyers can, lenders will gladly finance 100 percent, sometimes even up to 125 percent, of your purchase price. But you will probably pay an above-market interest rate, often including PMI (private mortgage insurance) premiums. In other words, "nothing down" isn't cheap. HOW TO DETERMINE IF YOU ARE A "WELL-QUALIFIED BUYER." If you pay attention to those "no cash required" radio and newspaper ads for some new houses and condos, in the disclaimer you will usually spot the words "well-qualified buyer." That means you must have good income and good credit. To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
In real estate "nothing down" means zero cash from the buyer's pocket. However, it doesn't mean the seller won't receive 100 percent cash for the home. Nothing down really means the buyer is borrowing the entire purchase price. To illustrate, when you read in the newspaper that a commercial property sold for $300,000, do you think the buyer paid $300,000 cash from his savings account? Of course not. Using a combination of a first mortgage, perhaps a second mortgage, plus a bank credit line, the investor-buyer probably didn't even pay the closing costs from his pocket. The same procedures apply to home purchases. BUYING A HOME FOR NOTHING DOWN IS EASY. If you are in the market to buy your personal residence but you are a little "cash-challenged," don't let that stop you from purchasing for zero cash from your pocket, just like the real estate tycoons. The Donald Trumps, John Schaub and the Carlton Sheets of the world. Although not every mortgage lender offers zero-down-payment mortgages, a savvy mortgage broker can arrange your no-cash home purchase. Especially if you are a first-time home buyer (defined as not owning a house or condo within the last two years), most mortgage lenders offer extra-easy home finance plans. But there's a catch. You will need 1) a reliable source of income, and 2) a good credit score. Many lenders now offer "stated income" mortgages where, with good credit, you don't even have to prove your income, such as with W-2s or tax returns. If you qualify, and many home buyers can, lenders will gladly finance 100 percent, sometimes even up to 125 percent, of your purchase price. But you will probably pay an above-market interest rate, often including PMI (private mortgage insurance) premiums. In other words, "nothing down" isn't cheap. HOW TO DETERMINE IF YOU ARE A "WELL-QUALIFIED BUYER." If you pay attention to those "no cash required" radio and newspaper ads for some new houses and condos, in the disclaimer you will usually spot the words "well-qualified buyer." That means you must have good income and good credit. To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
To illustrate, when you read in the newspaper that a commercial property sold for $300,000, do you think the buyer paid $300,000 cash from his savings account? Of course not. Using a combination of a first mortgage, perhaps a second mortgage, plus a bank credit line, the investor-buyer probably didn't even pay the closing costs from his pocket. The same procedures apply to home purchases. BUYING A HOME FOR NOTHING DOWN IS EASY. If you are in the market to buy your personal residence but you are a little "cash-challenged," don't let that stop you from purchasing for zero cash from your pocket, just like the real estate tycoons. The Donald Trumps, John Schaub and the Carlton Sheets of the world. Although not every mortgage lender offers zero-down-payment mortgages, a savvy mortgage broker can arrange your no-cash home purchase. Especially if you are a first-time home buyer (defined as not owning a house or condo within the last two years), most mortgage lenders offer extra-easy home finance plans. But there's a catch. You will need 1) a reliable source of income, and 2) a good credit score. Many lenders now offer "stated income" mortgages where, with good credit, you don't even have to prove your income, such as with W-2s or tax returns. If you qualify, and many home buyers can, lenders will gladly finance 100 percent, sometimes even up to 125 percent, of your purchase price. But you will probably pay an above-market interest rate, often including PMI (private mortgage insurance) premiums. In other words, "nothing down" isn't cheap. HOW TO DETERMINE IF YOU ARE A "WELL-QUALIFIED BUYER." If you pay attention to those "no cash required" radio and newspaper ads for some new houses and condos, in the disclaimer you will usually spot the words "well-qualified buyer." That means you must have good income and good credit. To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
BUYING A HOME FOR NOTHING DOWN IS EASY. If you are in the market to buy your personal residence but you are a little "cash-challenged," don't let that stop you from purchasing for zero cash from your pocket, just like the real estate tycoons. The Donald Trumps, John Schaub and the Carlton Sheets of the world. Although not every mortgage lender offers zero-down-payment mortgages, a savvy mortgage broker can arrange your no-cash home purchase. Especially if you are a first-time home buyer (defined as not owning a house or condo within the last two years), most mortgage lenders offer extra-easy home finance plans. But there's a catch. You will need 1) a reliable source of income, and 2) a good credit score. Many lenders now offer "stated income" mortgages where, with good credit, you don't even have to prove your income, such as with W-2s or tax returns. If you qualify, and many home buyers can, lenders will gladly finance 100 percent, sometimes even up to 125 percent, of your purchase price. But you will probably pay an above-market interest rate, often including PMI (private mortgage insurance) premiums. In other words, "nothing down" isn't cheap. HOW TO DETERMINE IF YOU ARE A "WELL-QUALIFIED BUYER." If you pay attention to those "no cash required" radio and newspaper ads for some new houses and condos, in the disclaimer you will usually spot the words "well-qualified buyer." That means you must have good income and good credit. To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
If you are in the market to buy your personal residence but you are a little "cash-challenged," don't let that stop you from purchasing for zero cash from your pocket, just like the real estate tycoons. The Donald Trumps, John Schaub and the Carlton Sheets of the world. Although not every mortgage lender offers zero-down-payment mortgages, a savvy mortgage broker can arrange your no-cash home purchase. Especially if you are a first-time home buyer (defined as not owning a house or condo within the last two years), most mortgage lenders offer extra-easy home finance plans. But there's a catch. You will need 1) a reliable source of income, and 2) a good credit score. Many lenders now offer "stated income" mortgages where, with good credit, you don't even have to prove your income, such as with W-2s or tax returns. If you qualify, and many home buyers can, lenders will gladly finance 100 percent, sometimes even up to 125 percent, of your purchase price. But you will probably pay an above-market interest rate, often including PMI (private mortgage insurance) premiums. In other words, "nothing down" isn't cheap. HOW TO DETERMINE IF YOU ARE A "WELL-QUALIFIED BUYER." If you pay attention to those "no cash required" radio and newspaper ads for some new houses and condos, in the disclaimer you will usually spot the words "well-qualified buyer." That means you must have good income and good credit. To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
Although not every mortgage lender offers zero-down-payment mortgages, a savvy mortgage broker can arrange your no-cash home purchase. Especially if you are a first-time home buyer (defined as not owning a house or condo within the last two years), most mortgage lenders offer extra-easy home finance plans. But there's a catch. You will need 1) a reliable source of income, and 2) a good credit score. Many lenders now offer "stated income" mortgages where, with good credit, you don't even have to prove your income, such as with W-2s or tax returns. If you qualify, and many home buyers can, lenders will gladly finance 100 percent, sometimes even up to 125 percent, of your purchase price. But you will probably pay an above-market interest rate, often including PMI (private mortgage insurance) premiums. In other words, "nothing down" isn't cheap. HOW TO DETERMINE IF YOU ARE A "WELL-QUALIFIED BUYER." If you pay attention to those "no cash required" radio and newspaper ads for some new houses and condos, in the disclaimer you will usually spot the words "well-qualified buyer." That means you must have good income and good credit. To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
But there's a catch. You will need 1) a reliable source of income, and 2) a good credit score. Many lenders now offer "stated income" mortgages where, with good credit, you don't even have to prove your income, such as with W-2s or tax returns. If you qualify, and many home buyers can, lenders will gladly finance 100 percent, sometimes even up to 125 percent, of your purchase price. But you will probably pay an above-market interest rate, often including PMI (private mortgage insurance) premiums. In other words, "nothing down" isn't cheap. HOW TO DETERMINE IF YOU ARE A "WELL-QUALIFIED BUYER." If you pay attention to those "no cash required" radio and newspaper ads for some new houses and condos, in the disclaimer you will usually spot the words "well-qualified buyer." That means you must have good income and good credit. To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
If you qualify, and many home buyers can, lenders will gladly finance 100 percent, sometimes even up to 125 percent, of your purchase price. But you will probably pay an above-market interest rate, often including PMI (private mortgage insurance) premiums. In other words, "nothing down" isn't cheap. HOW TO DETERMINE IF YOU ARE A "WELL-QUALIFIED BUYER." If you pay attention to those "no cash required" radio and newspaper ads for some new houses and condos, in the disclaimer you will usually spot the words "well-qualified buyer." That means you must have good income and good credit. To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
HOW TO DETERMINE IF YOU ARE A "WELL-QUALIFIED BUYER." If you pay attention to those "no cash required" radio and newspaper ads for some new houses and condos, in the disclaimer you will usually spot the words "well-qualified buyer." That means you must have good income and good credit. To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
If you pay attention to those "no cash required" radio and newspaper ads for some new houses and condos, in the disclaimer you will usually spot the words "well-qualified buyer." That means you must have good income and good credit. To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
To check your credit reports from all three national credit bureaus, and determine your FICO (Fair Isaac Corporation) score which most lenders use to rate you as a "well-qualified buyer," just go to www.myfico.com. For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
For $44.85 you will receive your three credit reports, and your FICO credit score. Each credit report will be different, so take time to compare them and follow the instructions to correct any errors. Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
Or, at no cost, you can obtain all three of your credit reports at 1-877-322-8228 or www.annualcreditreport.com. However, you will not receive your very important FICO score at this free source. After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
After checking your credit reports and FICO score, the next step is to get written pre-approval for a no-down-payment mortgage. Most major mortgage lenders offer this service, or a mortgage broker can obtain a lender's pre-approval written mortgage commitment at a low or zero up-front cost. To obtain a zero-down-payment mortgage, most lenders require a FICO score of at least 640. Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
Armed with your lender's written pre-approval mortgage promise (subject to reasonable conditions, such as appraisal of the home you decide to buy), then you can shop with confidence knowing the maximum mortgage you can obtain. HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
HOW TO BUY A HOME WITH 100 PERCENT FINANCING. However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
However, if you can't qualify for a no-down-payment mortgage, don't give up. There are many alternatives. For example, many buyers' real estate agents recommend 80-20, 80-10-10, or 80-15-5 mortgage choices. The 80 means the lender makes an 80 percent first mortgage, and a 20 percent, 10 percent or 15 percent second mortgage, often in the form of a home equity loan. If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
If you can make a 5 percent to 10 percent cash down payment, that makes obtaining financing even easier. A special advantage of keeping the first mortgage at 80 percent or less of the home purchase price is you will avoid the dreaded PMI (private mortgage insurance) premiums. However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
However, in the right circumstances, "seller financing" might be your best and least expensive choice. LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
LEVERAGE ADVANTAGES OF NOTHING DOWN. Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
Another name for buying real estate with little or no cash is "high leverage." It simply means the borrower controls the entire property with a small amount of cash. The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
The big leverage benefit is usually a high percentage profit-per-dollar invested if the property goes up in market value due to capital improvements or sales price appreciation. For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
For example, suppose you buy a house or condo for $200,000 with nothing down. Because of your good income and good credit, the mortgage lender approves a $200,000 mortgage. Suppose that house appreciates in market value by 5 percent annually or $10,000 in the next 12 months. What percentage return is that on your investment? The correct answer is "infinite," because your only out-of-pocket expense was probably for closing costs. However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
However, suppose instead you paid $200,000 cash for that same home and it appreciates the same 5 percent in market value ($10,000) during the next 12 months. Now your return on investment is a mere 5 percent. Of course, you avoided the tax-deductible mortgage payments, so those savings should be added to your return. As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
As the years go by, the advantages of high leverage on your home usually become greater each year. Of course, there is also risk, especially if you have to sell the home within the first five or 10 years when you don't have much equity. There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
There are many advantages, and a few disadvantages, of buying a home for nothing down. But the pros usually outweigh the cons. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
Our goal is to educate the consumer on one of the largest purchases they will ever make. Please feel free to submit all your mortgage related questions and we promise to respond within 48 hours.
Credit information, whether good or bad, remains on your credit report for a period of seven years. So, it makes good sense to know what's on your credit report, especially if you're considering applying for a mortgage or a new home loan.
When Good Credit Goes Bad Before you insist that you've never once made a late payment or that your credit history is unremarkable, keep in mind that errors do happen. That being said, errors in credit reports can actually be quite common. Think for a moment about mail containing misspelled names or addresses. Then, imagine the possibility for errors in a credit report, a document that actually contains much more pertinent personal information about yourself (social security number, drivers license, income, loan and bank account numbers).
By reviewing your credit report periodically, you can reduce or eliminate these costly errors. Steps To Maintaining Good Credit To reduce your chances of encountering an unwelcome credit surprise, consider the following helpful hints:
1. Obtain a copy of your credit report prior to applying for a new home loan and, at a minimum, once a year.
2. If you detect an error, contact the consumer credit reporting agency immediately.
3. Present a brief statement clarifying any inaccuracies. Simply explaining delinquencies won't help you plead your case.
4. Have corrected credit reports sent to all previously requested parties.
5. Follow-up on your credit history to ensure your report reflects accurate information.
When Bad Credit Really Is Bad Credit If you are applying for a new home loan, but already know you have blemishes on your credit report, don't give up. There are organizations that can help solve your credit problems and get you back on track.
By developing a budget, consolidating expenses, and preparing a plan for the future, you can apply for that mortgage and obtain the new home loan you've always dreamed of. All it takes is a little discipline, perseverance, and a solid financial game plan. Look for an advisor or organization in your area and turn your poor credit into great credit today. Resources www.annualcreditreport.com National Foundation for Consumer Credit.
"Our goal is to educate the consumer on one of the largest purchases they will ever make!
Interest only home loans can be found among most reputable lending institutions that offer many options to consumer demands.This financing arrangement requires monthly payments of the interest exclusive of the principle amount. This does not mean that a homeowner never pays the principle, but interest only home loans offer a period of time within the terms when the homeowner is required to pay off the monthly accrued interest.
For many homeowners this is a viable option for many reasons, but they are not the popular norm for the typical consumer wishing to purchase a place to live. This specialty financing option is just one of the many types of home loans available to consumers who have a variety of personal, financial requirements when purchasing a house. There are types of financing available with varying monthly payment terms, interest rates and pay off time. An interest only home loan appeals to a niche of consumers who have particular reasons for choosing an arrangement requiring payments of only finance charges for a specified amount of time.
It is not a wise move for most consumers to choose them because the principle is not paid for months or years and may not prove to be the best investment. However, for consumers who have particular reasons for assuming an interest only home loan, this option can be very suitable for their situation.
If a homeowner is only going to occupy the purchased house a few months or short years, it may prove worth their while to choose such an option because of the low, monthly payments. Such loans that are assumed for 5 years or less do not offer equity loss if the consumer does not stay in the home longer.
For real estate investors who are buying homes in order to turn a quick profit with an early resale, interest only home loans are perfect investment tools. For some home owners who believe their income will increase within a few years, this option may be wise because they can pay interest for a few years and then when the principle payments kick in, they will be ready to pay off large amounts.
For the right consumer, an interest only home loan can be a great investment, too. Thoroughly investigate your loan options before choosing which home financing is best for you.
Our goal is to educate the consumer on one of the largest investments they will ever make! Allow Me To Be Your New Friend in The Mortgage Business!
Feel free to submit all your mortgage related questions and we promise to respond within 48 Hours.
You ever heard the phrase, "house rich and cash poor"? Well it is a predicament that many elderly face in the world today. With the reverse mortgage many senior citizens can now acquire loans against their homes with no obligation to return the loans during their lifetime!
What is a reverse mortgage?
A reverse mortgage is a way for homeowners with substantial equity in their home to withdraw the equity tax free. The loan is different from a home equity line of credit because it does not have to be repayed as long as the homeowners occupy the property. The proceeds can be used for any purpose, for example property taxes, medical bills, start up businesses, vacations, etc.
How can I receive my money?
There are several options available for receiving your equity:
To qualify, you and any co-borrower must be at least 62 years of age and own a home. This home must be your primary residence. The best part of the program is there are no income requirements and only minimal credit requirements to satisfy.
How much money can I qualify for?
How much money you can receive is based upon the age and number of the borrowers, the value of the house, current interest rates, the maximum loan amount and the program you select.
Are there any costs associated with a reverse mortgage?
Yes, but none of the costs will be paid for out of the homeowner's pocket. Closing costs and fees will be incurred when you obtain a reverse mortgage. Closing costs include the appraisal, title insurance, origination fee and recording fees. With most lenders these fees can be rolled into your loan so you do not have to pay for them up front.
When will my reverse mortgage become due and payable? Your reverse mortgage must be repaid when you either sell your home or permanently leave the residence. In the event of death, your heirs will have the choice of keeping the house and repaying the loan with liquid assets or a conventional mortgage, or selling the house and using the proceeds to repay the loan.
Better Credit, Better Mortgage Rate: Understand and Improve Your Credit Score
Your credit record has a significant impact on your probability of securing a mortgage. It also influences the interest rate that you are offered. Its important to improve your credit score as much as possible in order to get the best interest rate available.
If you plan to buy a home or refinance your mortgage, a mortgage lender will look carefully at your credit record when you apply for a mortgage.
Your credit record documents how well you have handled credit in your past and how you use it right now. Your credit record is kept electronically by each of three private companies: Equifax, Experian, and Trans Union.A credit report lists the information in your credit record at one of these companies. It shows your debts and payment history with people and companies who have loaned you money, such as banks, credit card companies and department stores. It shows whether you pay bills on time and whether you pay the proper amounts due. Your credit report also shows any history of tax liens, bankruptcies, etc., even if any of these have happened several years ago.
How Your Credit Report Impacts Your Mortgage Application
Before you even meet with a mortgage lender, you should get copies of your credit reports and review them. One of the first things a mortgage lender will do when you ask for a mortgage loan is to order a copy of your credit report. As part of the credit report, lenders often get a credit score. A credit score is a computer-generated number that tells them how likely you are to repay your debts.
How Your Credit Score Is Calculated
A credit score is a statistical way of predicting how likely it is that you will pay back a loan, such as a mortgage, that may be made to you.
A credit score is calculated by analyzing all the pieces of information in your credit record and summarizing them in a number. Your credit score will be used along with your credit report and other information from your mortgage application to determine whether you will get a mortgage to buy or refinance your home. Your credit score also may be used to determine the interest rate you get on your mortgage. The most commonly used credit score today is known as a "FICO" score. A company named Fair, Isaac & Co. developed a mathematical way to look at factors in your credit record that may affect your ability and willingness to repay a debt. These factors can include your record of repaying loans, i.e., student loans, car loans and credit card bills; any public records you might have, like tax liens and bankruptcies; how often you apply for installment loans and new credit cards; and how much you actually owe. For example, if you charge up to the limit on your credit cards even if combined they don't seem to add up to a lot of money this might hurt your credit score. Or, if you have recently applied for several credit cards, including department store payment plans or credit cards even if you haven't begun to use them yet your credit score might be affected negatively.
What Makes Up a Borrower Profile
Mortgage lenders look at other information besides your credit score before deciding whether to make you a mortgage loan. They look at your employment history, your income and outstanding debt, savings patterns and amount of savings, and the type of mortgage you want. Mortgage lenders also look at the value of the property you want to buy or refinance and the amount of the down payment you plan to make or the equity that you have. All of these factors combined together make up your "borrower profile." Mortgage lenders view this full picture to make a final decision about your ability and willingness to repay a mortgage loan.
What You Can Do to Improve Your Credit Score
Follow these three rules of thumb to learn how to use your credit wisely.
Pay your bills on time.
Dont charge as much as your credit limits allow.
Pay down high balances.
How you've paid your bills in the past is usually the best indicator of how you'll pay in the future. Be sure to pay at least the minimum amount required by the date it is due on your account statement or invoice. You can always pay more but you should never pay less than the minimum. Remember being late on a payment is a negative mark on your credit record, even if you make up the payments later. Close accounts you never use and try not to draw down too much of your remaining credit lines. Don't apply for too many loans or too many credit cards either. This might be interpreted as a sign that you can easily get in over your head on payments you owe. You need to have some credit history to have a credit score. Sometimes having a very limited credit record can have a negative effect on a credit score. If you rarely or never borrow money or use a credit card, consider applying for a credit card and using it carefully, paying off the debt each month as required.
Getting a Copy of Your Credit Report
It's important that you review your credit reports from each of three private companies Equifax, Experian, and Trans Union at least once a year to make sure they are right. Your credit record, and therefore, your credit report may vary from one company to the other.
Equifax
Credit Information ServicesP.O. Box 740256 Atlanta, GA 30374-0256 Phone: 1 (800) 685-1111 Web Site: www.equifax.com
Experian
National Consumer Assistance Center P.O. Box 949 Allen, TX 75013-0949 Phone: 1 (800) 682-7654 Web Site: www.experian.com
Trans Union
National Disclosure Center P.O. Box 390 Springfield, PA 19064 Phone: 1 (800) 888-4213 Web Site: www.tuc.com
Correcting Mistakes on Your Credit Report
If you believe that any one of your credit reports contains mistakes and you wish to dispute or change the mistake, contact the national credit repository that developed the report. Under the Fair Credit Reporting Act (FCRA), the repository must investigate your disputed items within 30 days. You'll also receive written notice of the results of the investigation within five days of its completion, including a copy of your credit report if it has changed based upon the dispute.
Stated Income Mortgage Loans are the most commonly used and least expensive product in the reduced or no documentation suite of programs. A Stated Income Mortgage Loan is often the perfect choice if you have verifiable employment (self employment is fine) and assets. Income that is stated on the application must be reasonable in terms of your occupation and assets.The Stated Income Mortgage Loan is the least expensive reduced documentation product if it works for you. If not, a NO RATIO or true NO DOC mortgage may be a better choice. The point is, with decent credit, I can guide you to the least expensive program which will work in your specific situation.
Stated Income Mortgage Loans are available as:
15 or 30 year fixed rate require only 5% equity however, rates are lower with more equity. 100% Stated Income mortgage loans are now available for owner occupied, principal residences. Perfect credit is required but only 2 months of liquid reserves.
Allowable Use and Property Types
Stated Income Mortgage Loans are available for Single Family, Townhouse, some manufactured housing, and low rise condos. Some programs allow high rise condos 2-4 unit buildings, second homes, or investment properties but are slightly more expensive or require more equity. Allowable uses are for purchase or rate and term refinance. The programs will allow a "cash out" refinance but there are limitations on the allowable cash back. Please contact me with the specifics of your situation for guidance. If you are unsure a Stated Income Mortgage is the right answer for you, feel free to leave me an email and I will respond within 24 hours.
The fundamental thing to keep in mind with true NO Doc Mortgages is that the lender only has your credit profile and property to evaluate. If your situation allows verification of either employment or assets you will save some money because you have lowered the lenders risk. The choice is yours.
Underwriting Guidelines
Some general guidelines for a Stated Income Mortgage Loan:
Stated Income programs allow you to purchase or refinance a single family, townhouse or condo. An investment property can be a single family, 1-2 unit, townhouse or condo. Vacation homes also can be a single family, townhouse, or condo.
Many of my clients are converting from fully amortizing payments to a stated income, interest only approach with a significantly lower monthly payment.
"Our goal is to educate the consumer on the largest purchase they'll ever make!
Once the decision to buy a home has been made, you should take the time to prepare before you go on your home search. This article will provide information on things you should consider:
Yes, it is very tempting to rush out and actually look at houses, but to do so without full preparation can be both disastrous and expensive. Get your financial house in order first! I can't stress this enough--it will save you an enormous amount of time, aggravation and heartache. Determine what your budget will comfortably allow and stick to it. Don't spend yourself into a "house poor" situation.
Get preapproved for a mortgage. This will not only give you a clear idea of how much a lender will approve for you, it will make your homebuying process a great deal easier (and save a lot of time later).
Get familiar with the different housing types available to narrow your search. Determine your minimum requirements as well as any desired additional features--your needs and wants.
Take note of any items that you don't want in a house.
Determine the desired location (schools, work, public transportation, etc.)
Familiarize yourself with the mortgage process.
Choose an Agent that you feel comfortable with and who understands your needs. Be completely aware of the agency issue. If you look for houses before you have your own Agent, you may not have the representation you want. If you are looking to find an Agent in the area in which you are interested, send me an email, I do have some great Realtors in my network.
Don't just buy a home for your present needs, make sure to take into account future considerations.
As you are looking, use a scoreboard to compare homes. A scorecard is a great tool when it comes time for comparisons (and for remembering which home had which features!)
Get familiar with the inspection process--especially the personal inspection aspect, so that you can weed out unacceptable houses quickly .
Maintain your perspective--and your cool! You may find an acceptable house on the first day--or the tenth. The important thing is to get the home that is best for you!
What is a FICO Score?
FICO scores are numeric representations of your credit profile. The higher the FICO score the better credit risk you are. FICO is a product of Fair, Isaac Company. These have been around for several years but started to be used in the mortgage lending business in 1995 for the purpose of keeping down the expense associated with Home Equity loans. These scores are now used by Freddie Mac and Fannie Mae in conjunction with there automated underwriting systems.
The following is an overview of what constitues a FICO Score: 1.They are based on years of computer modeling aimed at predicting who might be a credit risk. 2.Their purpose is to reduce the cost of examining credit reports and to speed mortgage approvals through the process of automated underwriting . 3.The important negative factors are: bankruptcies, delinquencies, credit lates, collections, too many open credit lines, "too much" credit, too little credit history. 4.The score is only as good as the data.
How much down payment will I need?
You can get a home with as little as 5% downpayment (there are special cases which do 3% down). If your downpayment is less than 20% of the purchase price, or 20% of the appraisal for a refinance you will need Private Insurance (PMI). The downpayment must be well-documented. That is, you must show, for example, bank statements proving that you have had the money for at least 2 months
Why should I do a NO POINT, NO COST LOAN?
Maybe you are thinking of refinancing but you think rates are going to decline some more this year. What should you do? Suppose you have an $250,000 adjustable mortgage with a lifetime cap of 10%; your monthly payment can go to $2,193. Your current adjustable rate is 7.5%, the monthly payment is $1,748 and may go to 8.5% during the next year, your payment will increase to $1,922.
The No-Point No-Fee Advantage: If you can refinance your home @ 7.50 % payment of $1,744 fixed for 30 years you can avoid the risk associated with an adjustable and if rates fall you can refinance once again. Why? By not paying the loan points and closing costs out of your pocket you have the financial flexibility to refinance again and again if interest rates continue to fall and continue to lower your monthly payments without spending anything.
What does it mean to have 0 points or 1 point or 2 points?
A point is one percentage of the loan amount. The lenders offer rates which may be lower but require paying points. A rate of 6.75 7% with 1 point for a loan of $100,000 would require the borrower to pay a total of $1000 to the lender upon approval of the loan. A rate of 7.125% with 0 points will require no payment to the lender but the interest rate is slightly higher. Points will lower rates and are of benefit if you have some cash to lower the rate and intend to keep the loan for its full term.
How long does the loan process take?
The loan process can take as little as two weeks providing all of the proper information is received at the time of loan application. The more information that is provided at the beginning of the loan, the faster we can process that information and have the loan underwriter approve your loan.
What information will I need at the time of loan application?
The most common items needed are: Last Two Years Tax Returns, Recent Paystubs, Two Months Bank Statements, Mortgage Holder or Landlord Address and Account Number, Last Credit Card Statements if Balance is Carried Forward.
What is a Rate Lock?
The rates you see on this web site are always quoted (unless otherwise noted) for 30 day rate locks. The interest rate on your loan is not set until we fax a "Rate Lock" form to the lender and receive confirmation that they have received it. The loan must fund before the "lock expiration" date or you can lose your rate lock. When we are locking your rate and discussing the lock expiration date it is important that both borrowers be available to sign the documents. You must tell us of your vacation and travel plans. If one borrower will be out of town we can have a "specific power of attorney" prepared so that the other person may sign for both.
What is preapproval?
Preapproval is a step beyond prequalifying. In a preapproval we send the credit part of the loan package to the lender and get you approved for a certain type of loan with a particular lender before you have found or made an offer on a property.
With a preapproval you can close the loan faster and often will find your offer more acceptable to the seller. Sometimes sellers are anxious and will take somewhat less in price from someone who can close quickly.
For most people, homeownership represents independence, security and the beginning of wealth building. Homeownership has become more than just a dream for many women. According to the National Association of Realtors (NAR) women are not only the fastest growing segment of homebuyers, but they account for one-third of all condominium purchases and they're buying a greater percentage of second homes more than ever before. NAR research indicates that, in fact, single women buying homes are outperforming single men as first-time home buyers at a rate of about two-to-one over the past five years.
Preliminary data from the NAR notes that in 2004, approximately 18% of all first-home buyers in the U.S. were single women while just 9% were men. Those numbers are up from 2003 tallies, when single women constituted 15% of the home-buying market and single men constituted only 7%. Twenty years ago, a woman might have said, "I think I'll wait until I get married to buy a home," but today that's not the case.
Why are so many women buying homes?
For many women homeownership represents security and progress. "They obviously see a home as a sound investment," says Michael Mcloud, industry-trend specialist. "It's also far easier for single women to get a mortgage now than it was two decades ago."
According to the NAR, the majority of real estate agents and brokers in the US are women, making it more likely that women work with other women to increase homeownership. As women increasingly get married in later years now than ever in history, they are also no longer waiting to get married before they become homeowners. In addition, low interest rates and low down payment programs are fueling this increase. Flexible underwriting and the Federal Housing Administration’s push to allow single parents to count child support as income has helped as well.
This phenomenon is not just limited to the US. In Great Britain, the same segment is forsaking the rental market for their own homes at an even higher rate. More than 21% of first-time home buyers in the U.K. in 2004 were single women, according to Her Mortgage, which specializes in women home-buying services.
Realty Check
Women also realize the uncertainties of the renters market with fluctuating rent prices and diminishing of subsidized housing provisions, which make home ownership an attractive option.
Is it really possible for YOU to own a home?
Faced with the real estate market’s current hyper-inflated prices, many women wonder if homeownership is still possible. The answer is an emphatic yes! Most first time home buyers who are single may want to consider a townhouse or condominium as a first time buy. These real estate properties are usually managed by an external company that takes responsibility for maintaining the grounds and all property extending outside of your home, reducing the burden and cost of homeownership. Please note that, in addition to your mortgage, you will, in most cases, be subject to a monthly maintenance fee.
Urbanites that prefer to remain in the city should check into new construction or remodeled properties. Developers receive special tax credits and incentives when they price a percentage of these properties for middle to low income home-buyers. Don’t be afraid to ask questions. Many of them will sit down with you and explain their guidelines and requirements.
Check the planner’s office in your local city. Many of them maintain plans for areas that will be developed over the next 5 or more years. You may discover an area that is going through the beginning stages of redevelopment. Housing prices are usually below market rate in these neighborhoods. If you are flexible and willing to look beyond highly sought after real estate in popular neighborhoods, you are sure to find a home you can afford.
Consider partnering with a close, reliable family member or friend. Homeownership can be a beneficial shared experience, reducing your costs and responsibilities, if you collaborate with someone you can trust. A good lawyer and accountant can assist both parties in structuring the deal where you both benefit from owning the home.
Owning a home is more than just a distant reality. If you haven’t already, you can join the growing number of women eschewing the bottomless rent pit and venturing into single homeownership. Not only are these women increasing their self-sufficiency, they are enjoying the following benefits:
· Improved credit rating (a mortgage is an excellent credit booster).
· Independence and privacy
· Increased equity as you invest in your home through mortgage payments and improvements
· Security - during inflation home value increases with growing prices
· Stability
· Tax advantages – (You can deduct closing costs, mortgage, and property taxes).
If you do answer to the call of homeownership, please be aware of the risks involved, including but not limited to:
· You may find yourself paying more each month than you did in rent
· You, solely, are responsible for maintenance and repairs of your home
· Property value may depreciate and you may end up selling at a loss
Ensure you are prepared to buy a home by doing your research, working with reliable professionals and asking yourself the many questions, including:
· What type of house can I afford?
· What kind of mortgage should I get?
· Which neighborhoods should I be looking in to get the most for my investment?
· How do I negotiate the best deal possible?
The benefits of owning a home can far outweigh those of renting and they come with responsibilities, but single women are increasingly taking that step. You can too!
Part of Carla Barnes Taking The Real Estate Game To the Streets Series Of Articles
You’re a Real Estate Entrepreneur or Investor, and you’re out there in the market place looking for deals. Quick question for you.Are you doing a little advertising and just hoping that a deal will fall in your lap, or are you working in a way that will eventually create success. If you don’t have a process for making sure deals happen, you don’t yet understand the importance of having a marketing plan. Forgive me if I'm being too blunt, but I'm only attempting to keep it real.The sad fact is that even after all their training, less than one percent of all real estate entrepreneurs and investors actually have a marketing plan. Even though it’s very simple some may even feel it's trivial, but don’t underestimate the power of a marketing plan.
The Most Important Thing About Marketing is to Have a Marketing Plan!
1) It’s a concrete result you put out for your mind to seize on and strive to achieve.2) It allows you to clarify exactly what you want to achieve in the coming 30 days.3) It allows you to map out the activities needed to achieve that plan.4) It allows you to plan in advance to delegate off the lower paying activities, so you don’t end up doing them.5) It allows you set time deadlines, to hold others accountable so everything gets DONE!6) It results in you being free to concentrate on your highest payoff activity: Making Offers on Great Deals!7) You have a business that operates consciously, not by accident.More people fail in real estate because they simply do not have a plan or goals. You should have a detailed marketing plan of what you want to accomplish and how you are going to accomplish it.And, don’t be vague, either. Things like, I want to make more money than I can ever spend, and I want to be rich, and I want to make $25,000 a month, are not plans. They are too vague, and they won’t help you get there. Be as specific as you possibly can.In planning for monthly revenue, try to put your money goals in cash income, not gross revenue. I know gross revenue is what you’re used to thinking in, but cash is obviously more important. It’s what you take to the bank, and it’s what pays bills.First, examine your current numbers. More than 80 percent of all real estate entrepreneurs know how many houses they are buying each month, but they don’t know where those houses came from and how many leads they had to process to develop them into the single deal. And, this is a deadly sin.You Simply Must Know How You Are Currently Doing
You should know:1) The total leads that call each month2) Where those leads come from3) How many “qualified” seller prospects (those that you are willing to invest follow-up in if they don’t sell now; they have motivation, you are interested in the house.) you get eachmonth4) The ratio of total to qualified5) The number of deals you close6) The ratio of closed deals to qualified leads – for each lead source7) How much you make from each seller8) How much it cost you to acquire a new sellerWith this information you can look at your current resources, look ahead, and then plan out what you want to have happen. The number of deals you want to do, the amount of money you want to make.For example, let’s say you are bringing in around $10,000 a month and your average deal gives you $5,000.That’s two deals a month. These are cash proceeds and after expenses you net 50 percent of your gross or $5,000 a month. And let’s say that you want to double your net income next month.You will have to get twice as many deals to double your business goal. Four deals a month, or one a week.Let’s say you currently get one deal a month from a classified ad, and one deal a month from your blogs. But, you get ten qualified calls a month from his classified ad and 10 qualified prospects calling a month as a result of your blog. So, you currently close ten percent of your prospects.First, you can improve on this situation by improving that twenty percent closing ratio. By improving your closing ratio by things like more precise targeting, the present lead-flow would stay the same, you’ll get your same twenty real prospects and achieve your goal of doing four deals next month.But assuming that’s not something you have control over right now, the other way to double your income in the next month is to double the number of qualified prospects you talk to and make offers to. So instead of getting 20 qualified leads to call, you would need 40.Your plan to get forty qualified prospects would need 10 to come from blogs, 16 to come from flyers in target neighborhoods, 4 from business cards handed out everywhere, 6 to come from signs placed in the ground at high traffic count intersections, 10 to com from classified ads that drive people to the website. Total: 46 prospects. Cool! That’s six to spare. Yipeee!With this number of leads coming in, you have what is needed to closed four deals and reach your goal of doubling your net income. Actually, it’s more than doubling because your fixed expenses don’t increase with the income. Isn't that awesome?!You should have a monthly plan. Schedule thirty or forty minutes out of one day to make up your monthly plan and see how you did last month. Schedule this time and keep to it. Don’t do any work or take any calls during this time. Keep it strictly for planning. If you do this and you allow yourself to get into the whole spirit of planning, and making things happen on purpose, you will easily double your income in twelve months.Your Monthly Plan Should Include The Following
1) A goal for total net income2) A goal for number of deals signed up3) A goal for number of appointments made4) A goal for number of qualified, interested sellers5) A goal for total number of leads6) Average net income from each deal7) The number of prospects you have to generate to reach your goalA detailed plan to generate the number of prospects you need. Your plan doesn’t have to be typed out or put into a computer. It can be handwritten on paper. It doesn’t have to be pretty.Scratch pad plans are good enough, even writing on the wall. (Just kidding about the wall) The important part is that you do a plan every single week and keep on top of things.This is a simple thing to do, but it is just as easy to not do. Blowing it off is the equivalent of you absolving yourself of responsibility for your business. On the other hand, taking the time to think through your goals each month, both for income, and marketing activity, then committing them to paper will make things start happening by plan and put you in control of your business. Think about your future in Real Estate, take action, and if you decide you need a Professional to Create a marketing plan to fit your needs contact me. With years experience in strategic marketing and new business development I can help to increase your network, to increase your networth. Until next time!
A Step - By - Step Walk Through
Pre-qualification - Lenders are encouraging buyers to get pre-qualified for a mortgage so they'll know in advance how much house they can afford.
Loan Search - Although buyers often use a lender recommended by their Real Estate agent, some prefer to do their own comparisons.
The Hunt - The buyer begins shopping for a house. When the right one is found, the terms of the sale are negotiated, including the sale price and often the type and conditions of the loan being sought.
Loan Application - It's crucial to supply the lender with as much information as possible, as accurately as possible. All outstanding debts as well as assets and income should be included.
Documentation - Paperwork supporting the application must also be submitted. Information commonly sought includes pay stubs, two years' tax returns, and account statements verifying the source of the down payment, funds to close and reserves.
Appraisal - Lenders require an appraisal on all home sales. This step could jeopardize a deal if a big discrepancy were to exist between the home's sale price and appraised value.
Title Search - This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the owner. All liens must be cleared before a transaction can be completed.
Termite Inspection - Most purchase loans require an inspection for termite and water damage. Some problems may need to be repaired before finalizing the sale.
Processor's Review - The lender's loan processor packages all pertinent information to be sent to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit.
Underwriter's Review - Based on the information put together by both the loan executive and the processor, the underwriter makes the final decision on whether a loan is approved.
Mortgage Insurance - Many lenders require private mortgage insurance when borrowers put down less than 20 percent on a loan. Even if a loan meets the standards of a lender, a mortgage insurance company could choose to deny coverage.
Approval, denial or counter offer - In order to approve a loan, the lender may ask the borrowers to put more money down to improve the debt-to-income ratio. The borrower may also need a bigger down payment if the property appraises for less than the purchase price.
Insurance - Lenders require fire and hazard insurance on the replacement value of the structure. Flood insurance will also be required if the property is located in a flood zone. In California, some lenders require earthquake insurance on condominiums.
Signing - Final loan and escrow documents are signed.
Funding - The lender sends a wire or check for the amount of the loan to the title company.
Close of Escrow - Documents transferring title are recorded with the County Recorder.
Confirmation of Recording - The title company then authorizes the escrow company to draft a check to the seller.
Buyer Begins Making Mortgage Payments...
"Feel free to submit all your real estate related questions and we promise to respond within 48 Hours."
You ask........
It's virtually impossible to change your score in the time between when most people decide to buy a home or refinance their mortgage and when they apply. So the short answer is, you really can't "on the spot." But there are strategies you can live with to make sure when you apply for a loan your score is as high as possible.
Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.
Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score goes down until time passes without any inquiries. Changes in the law though have made "consumer-originating" credit report requests not count so much. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what's on them, and smart consumers shop around for the best mortgage and car loans.
Unsolicited credit card solicitations in the mail don't count against your credit report, so don't worry.
The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as long as 10 years, can significantly lower your score. It's never a good idea to take on more credit than you can handle.
Late payments work against you. It's extremely important to pay bills on time, even if it's only the monthly payment.
Don't "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better.
It's said that by carefully managing your credit, it's possible to add as much as 50 points per year to your score. Our goal is to educate the consumer on one of the largest purchases they will ever make. Please fee free to submit all your mortgage related questions and we will respond within 48 hours!
With Mortgages going to be harder to qualify for without money down in 2008, more people are going to need rental properties. Atlanta has always been a great rental and buy market. Rates low and qualification easy there wasn't much difference between rent and buy. Now there will be a greater demand for rentals so the rental value will increase. What a great time to buy & hold. West GA suburbs with easy access to downtown and the airport have low rental home prices and a thriving market. What are you waiting for??
Daily Real Estate News | August 31, 2007 -- The 10 Best Cities to Be a Renter
Much like a buyers' market in the residential sector, the best renters' markets occur where supply is abundant, price growth is flat, and renters can get the best value for their dollar.Forbes magazine calculated the best renters' markets by starting with rental pricing data from real estate investment firm Marcus & Millichap. From there it calculated capitalization rates - the percent of a property's value acquired in yearly rent. The higher the cap rate, the more lucrative it is for investors. The lower the cap rate, the less a renter has to pay to rent a more valuable property.Next, using data from the Bureau of Labor Statistics, it calculated how much of a resident's salary goes into rent. Finally, cities were ranked on the relative tightening or loosening of vacancies in the rental sector based on data from the NATIONAL ASSOCIATION OF REALTORS®.Here are the cities that Forbes concluded are the top 10 renters' markets:
Source: Forbes, Matt Woolsey (08/30/2007)
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