Financing and Credit

Remortgage advice is vital for all homeowners who want to save money, and ensure that they are getting the best deal.
If you own your home, there are many reasons why you should review your mortgage, and decide if you are getting the best possible deal. Far too many people become complacent where their mortgages are concerned, therefore, not ensuring that they are getting the best rates.

Many homeowners are unsure of how to remortgage their homes, and will need to seek professional remortgage advice. Taking the time to review your current mortgage will ensure that you are receiving the right rates for your situation.

The break even ratio (BER) is a calculation routinely used by lenders. The BER is expressed as a percentage; this percentage is used by lenders to decide whether or not to underwrite a loan for a particular piece of rental income property.

First, debt services and operating expenses are totaled. That number is then divided by the gross operating income. The lower the percentage's, the better.

The cash break even ratio is also commonly referred to as the “default ratio.” JV

A Blanket Mortgage (also called a blanket loan) is a type of home loan used to fund the purchase of more than one piece of property. Blanket loans are popular with builders and developers who buy large pieces of land to subdivide and build (and then sell) multiple homes. However, they’re also very popular with real estate investors because it permits them to secure multiple properties at one time with the convenience of only one loan payment.

These loans are much more popular on the commercial side, but are available to the seasoned investor as well, permitting them to buy more than one property at a time. Investors usually set up an LLC for this type of purchase, for the added protection that an LLC offers.

As a financial intermediary firm that focuses 100% of its attention on representing Clients in the real estate capital markets, Metropolitan Capital Advisors (“MCA”) takes great pride in our ability to quickly and efficiently cover a wide array of Capital Providers to bring our Clients a multitude of viable financing options. In better times like 2005-2007, finding Capital Providers was not an issue but we maintained our discipline to still provide our Clients several term sheets knowing that that the “cream will always rise to the top” rather than telling the Client to take the first deal that came along. We also knew from our experience that having a backup is essential in the event a deal goes sideways with the first choice.

Starting today, real estate agents who list or sell a foreclosed home owned by mortgage giant Freddie Mac in 23 select states will get cash when the sale of the home closes.

The promotion applies to homes sold through Freddie Mac’s real estate sales division, HomeSteps. Buyer’s agents will receive a $1,000 incentive and listing agents a separate $500 incentive when an approved offer is received by April 15 and the transaction closes by May 30, the mortgage giant said.

The U.S. Government’s HAMP Program (Home Affordable Modification Program) is about to expire. Over $1 MM homeowners were able to take advantage of this program in 2009, which provided a sharp drop in the interest rates on their loans. But with the HAMP program about to expire, these homeowners will see their interest rates rising every year with an average of $200 increase in monthly payment.

For homeowners in California, for example, mortgage payments could increase by up to $1,000 per month.

The Accelerated Cost Recovery System (often abbreviated as ACRS) is a system of depreciation introduced by the Economic Recovery Tax Act of 1981 and only applies to properties placed in service between 1981 and 1987.

If you own property for the purpose of producing income, or for use in a trade or business, tax rules within the ACRS permit you to recover funds through depreciation deductions. Property depreciable under ACRS is called recovery property. If you began utilizing your recovery property during this period for work or rental income, you must continue to figure out your depreciation under the ACRS.

How do you figure out what your depreciation deduction is?

In today’s credit environment, most borrowers are taking advantage of attractive interest rates… which remain very close to the all-time lows of the recent recession. Many of these property owners are going one step further by pushing loan dollars up the leverage curve and “cashing out” equity via a refinance. Returning a portion or all of the equity a Sponsor has invested into a project immediately juices the Internal Rate of Return (IRR) and Cash-On-Cash Yields to the Investors.

It is important to first acquire a good financing arrangement in order to gain a profitable financing investment. The investment can be lucrative especially if the cost in financing is lower than the income generated by the owners. Mortgage for Investment property is one of the known alternative for acquisition property funding. The terms in payment and

interest rates are lower and favourable to the investor.

But what is mortgage and what do you know about it? When a loan is secured by a property that serves as the source of payment to protect the lender in case the borrower fails to repay at the end of the loan term.

Real Estate Investment can be easier and less risky for out of town investors than you think. Have you considered lending on property for re-habbers who fix and flip or buyers who may wish to occupy a property and pay 7% to 10% mortgage payments? But is holding a note secured by real estate more than you care to have on your plate due to the potential of having to foreclose on a property? I have over 20 years of experience in real estate investment in and around Charlotte, NC. 12 years of it was mostly in buying and rehabbing properties and then selling to first and second time home buyers.