Financing and Credit

Mortgage rates jumped up this week, propelled by remarks made at Janet Yellen’s first press conference as Federal Reserve chair.

In its weekly Primary Mortgage Market Survey, Freddie Mac reported an increase of 8 basis points in the 30-year fixed average rate, bringing up to 4.40 percent (0.6 point) for the week ending March 27. A year ago at this time, the 30-year fixed-rate mortgage (FRM) averaged 3.57 percent.

The 15-year FRM also climbed, moving up a tenth of a percentage point to an average 3.42 percent (0.6 point).

I remember the good old days when my credit was above 700 back before the shortsales of 2009 kicked my arse! Does this sound familiar?

Investment property loans let you put other people's money (OPM) to work for you. Set yourself up for success and use safe investing strategies that let you keep your money in your pocket, or buried in the yard, or where ever you keep it.

Who should use these loans? Beginning, Intermediate, & Experienced Investors.

Never use your own funds. Look at it like this - if you were to use only your money then you're limiting yourself personally and your scope of investing by the amount of funds that you have available. But if you use OPM your amount of available funds are unlimited.

There's only 4 types of investment property loans you'll ever need...

Hard money for short term house flipping.

Private money to buy properties & build long term wealth.

Reasons for approving mortgages with lower minimum credit scores include mortgage lenders’ growing confidence as the economy improves and mortgage defaults decrease. As rates rise and refinancing activity dries up, lenders may also exercise more flexibility with credit scores in order to encourage more business.

While this isn’t life-changing news for would-be mortgage applicants with sub-par credit scores, a mortgage lender’s willingness to work with less-than-perfect credit is a positive sign in the aftermath of the recession.

Having trouble qualifying for a home loan with your bank or local lender? Getting frustrated with tight underwriting rules? If so, seller financing might be for you.

Seller financing is when the seller allows you to make payments directly to them, bypassing the bank and Fannie Mae. If the seller does not need all their cash immediately, they might be happy to let you make payments and collect the interest for themselves.

Here is how a typical seller-financed loan works:

There are easier ways to reduce one’s tax bill. But for many American taxpayers, this is the big one: the deduction for interest payments on home mortgages.

Homeowners in the U.S. last year received a total of roughly $70 billion in federal tax breaks through the deduction. But discussions in Congress about a broad tax overhaul are heating up, and all sorts of tax deductions — including the mortgage-interest deduction — are being discussed by both parties.

Supporters of the mortgage-interest deduction say it encourages homeownership and gives the middle class a better shot at financial security. The deduction helps middle-income purchasers by making their mortgage payments more affordable and by helping these families build equity in their homes.

I've worked with a ton of short sales over the past year. The single biggest source of stress for a short sale listing agent is watching the foreclosure date approach as you try to close the deal. That date looms on the calendar, circled in red, with the clock moving faster and faster towards it.

I've had deals where on the day before foreclosure I was sitting on the phone, biting my nails, trying to push a postponement through. Mostly, I've been successful. Although you hear people complain that “banks must want to foreclose,” and though I admit their processes sure make you feel like that, they really don’t want to foreclose. Frankly, they will lose more money by foreclosing (in most cases) then trying to work out a sale with a potential buyer at a “short” payoff.

Any non-bank loan can be called, a private money loan. Hard money loans fall into this category of non-bank financing and are given their namesake because they are loans against “hard” assets. For borrowers used to qualifying for bank loans, the interest rates charged by non-bank lenders may be shocking. For example, hard money interest rates can range from 7% to 15%, or even higher. Hard money loan interest rates are not ruled by the same factors that affect bank rates. I will mention just a few reasons here, but comment below and add additional reasons or factors to this short list:

This article will highlight three key areas that are important to succeed in investment real estate financing in your next real estate investment deal.

The Property Finance Plan

Successful Investment real estate financing should also come with a property finance plan.

When buying your first home, you’ll have lots of lingo to get caught up on quickly. Understanding the process can help limit the surprises during what is likely the biggest purchase you have ever made in your life. A good faith estimate can help.

A good faith estimate approximates the final cost of completing the purchase of a property. It is supplied by potential lenders so you can best compare mortgage options. The lender must give you a good faith estimate within three days of you making a loan application (not including Sundays or legal holidays). Once the lender provides the estimate (an excerpt of the form is shown below), it is bound by the terms except under certain circumstances.