MORTGAGES
MORTGAGE...
WHAT IS MORTGAGE? I
t is a debt instrument recorded by the collateral of a specified real estate property, that the borrower is obligated to pay back with a predetermined set of payments.
Mortgages are used by individuals and businesses wishing to make large value purchase of real estate without payment the entire value of the purchase up front. Mortgages are also known as lien against property, or claims on
property.
Mortgage is a legal agreement that creates an interest in a real estate property between borrower and the lender.
----------------------------------------------------------------------------
WHAT GUIDELINES ARE REQUIRED FOR A MORTGAGE LOAN?
There is no plan that is the perfect loan package for every person or situation.
Many factors must be evaluated to determine what terms will offer the best available loan program. The interest rate, size of payments, and the down-payment, schedule of payments, amount of the loan, life of the loan, and any other
requirements or conditions attached to the loan, all play into the evaluation of a loan.
In most cases, loan guidelines are based on credit history, employment, income, assets and liabilities. Each loan program typically offers a set of criteria of guidelines that may be slightly different from the other.
DOWN-PAYMENT:
The amount of down payment you make on your mortgage loan will affect the size of your payments, the length of your loan life, the amount of interest you will pay, the type of loan you may obtain, the conditions of the loan and other
aspects depending on how you obtain the down payment money.
However, there many options for possible ways to come up with a down payment:
Cash on hand from saving, sale of another property, 401k, mutual funds, stocks, IRAs, cash value from life insurance, donation etc.
SOMETIMES YOU CAN EVEN PURCHASE YOUR HOME WITH ZERO [0] NO MONEY DOWN--------------------------------------
WHAT IS MORTGAGE? I
t is a debt instrument recorded by the collateral of a specified real estate property, that the borrower is obligated to pay back with a predetermined set of payments.
Mortgages are used by individuals and businesses wishing to make large value purchase of real estate without payment the entire value of the purchase up front. Mortgages are also known as lien against property, or claims on
property.
Mortgage is a legal agreement that creates an interest in a real estate property between borrower and the lender.
----------------------------------------------------------------------------
WHAT GUIDELINES ARE REQUIRED FOR A MORTGAGE LOAN?
There is no plan that is the perfect loan package for every person or situation.
Many factors must be evaluated to determine what terms will offer the best available loan program. The interest rate, size of payments, and the down-payment, schedule of payments, amount of the loan, life of the loan, and any other
requirements or conditions attached to the loan, all play into the evaluation of a loan.
In most cases, loan guidelines are based on credit history, employment, income, assets and liabilities. Each loan program typically offers a set of criteria of guidelines that may be slightly different from the other.
DOWN-PAYMENT:
The amount of down payment you make on your mortgage loan will affect the size of your payments, the length of your loan life, the amount of interest you will pay, the type of loan you may obtain, the conditions of the loan and other
aspects depending on how you obtain the down payment money.
However, there many options for possible ways to come up with a down payment:
Cash on hand from saving, sale of another property, 401k, mutual funds, stocks, IRAs, cash value from life insurance, donation etc.
SOMETIMES YOU CAN EVEN PURCHASE YOUR HOME WITH ZERO [0] NO MONEY DOWN--------------------------------------
TYPE OF MORTGAGES
There are different kind of mortgages in the market, since I am a knowledgeable mortgage
specialist and a financial advisor; you will have the chance to learn more about mortgages
from this website.
ADJUSTABLE RATE MORTGAGE/ARM:
This type of mortgage works out well very well if interest rates drop down during your mortgage period you will pay less.
If interest rates rise, then you could end up paying more than you would with a fixed mortgage.
However, lenders do limit how much your interest rate can rise. Generally, lenders limit the increase potential to two points a year, and six points total for the life of the mortgage
loan. Adjustable mortgage means: UP AND DOWN, DOWN AND UP.
--------------------------------------------------
FIXED RATE MORTGAGE.
Fixed rate mortgages come pretty much the way they sound. With a fixed rate interest that is guaranteed not to change over the life of your mortgage, no matter how the market
changes therefore, fixed rate mortgages are good for people who want fixed monthly bills, or who plan on staying in their homes for an extended period of time, people with fixed
incomes or strict budgets.
-------------------------------------------
REFINANCE MORTGAGE
A refinance mortgage is not an extension of an existing mortgage.
It is a brand new one with a new interest rate and new payment plan.
Common reasons why people refinance is:
to lower their current interest rate and mortgage payment , -------- to change the rate from ARM to a fixed rate mortgage,--------- to pull some cash out of their home equity,
to consolidate their consumer debts, since all consumer interest rates are usually higher than the mortgage rate. And also the debtors cannot claim consumer interest in income
tax, but mortgage interest can be claimed in income tax,
to improve the property value,------- --- To take off a co-signer on the mortgage etc.
REFINANCING TO GET NEW RATE CAN BE BENEFICIAL IF YOUR CURRENTLY HAVE A HIGHER RATE THAN THE ACTUAL MARKET RATE.
--------------------------------------------------------------------------------------------------------
HOME EQUITY MORTGAGE
A home equity mortgage is the value, money that the homeowners can get by leverage the equity they have build over the time in their homes. It is a lump sum of cash that a
borrower receives.
A home equity mortgage is useful because it provides homeowners with easy access to cash.
The interest of a home equity mortgage is lower than the credit cards loan, and it is also tax deductible.
-----------------------------------------------------------------------------------------------------------------------------------------------------
GRADUATED PAYMENT MORTGAGE:
A GRADUATED PAYMENT MORTGAGE, OFTEN REFERRED TO AS [GPM] IS A
MORTGAGE WITH LOW PAYMENTS WHICH GRADUALLY INCREASE OVER A SPECIFIC
TIME FRAME.
THESE PLANS ARE MOST GEARED TOWARDS YOUNG MEN AND WOMEN WHO CAN NOT
AFFORD LARGE PAYMENTS NOW, BUT CAN REALISTICALLY EXPECT TO DO BETTER
FINANCIALLY IN THE FUTURE. FOR INSTANCE MEDICAL STUDENT WHO IS JUST ABOUT
TO FINISH SCHOOL.
------------------------------------------------------------------------------------------------------------------------------------------------
WRAPAROUND MORTGAGE:
A WRAPAROUND MORTGAGE, IT IS A FINANCING ARRANGEMENT IN WHICH AN
EXISTING MORTGAGE IS REFINANCED.
THE LENDER, WHO AGREES TO PASS THROUGH PART OF THE MORTGAGE
PAYMENTS TO THE ORIGINAL MORTGAGE LENDER, COMBINES OR WRAPS THE
REMAINDER OF THE OLD MORTGAGE WITH THE NEW MORTGAGE AND THE
BORROWER MAKES ONE MONTHLY PAYMENT.
A WRAPAROUND MORTGAGE IS AN ALTERNATIVE TO REFINANCING THE ENTIRE
MORTGAGE LOAN WHEN A BORROWER NEEDS ADDITIONAL FUNDS
There are different kind of mortgages in the market, since I am a knowledgeable mortgage
specialist and a financial advisor; you will have the chance to learn more about mortgages
from this website.
ADJUSTABLE RATE MORTGAGE/ARM:
This type of mortgage works out well very well if interest rates drop down during your mortgage period you will pay less.
If interest rates rise, then you could end up paying more than you would with a fixed mortgage.
However, lenders do limit how much your interest rate can rise. Generally, lenders limit the increase potential to two points a year, and six points total for the life of the mortgage
loan. Adjustable mortgage means: UP AND DOWN, DOWN AND UP.
--------------------------------------------------
FIXED RATE MORTGAGE.
Fixed rate mortgages come pretty much the way they sound. With a fixed rate interest that is guaranteed not to change over the life of your mortgage, no matter how the market
changes therefore, fixed rate mortgages are good for people who want fixed monthly bills, or who plan on staying in their homes for an extended period of time, people with fixed
incomes or strict budgets.
-------------------------------------------
REFINANCE MORTGAGE
A refinance mortgage is not an extension of an existing mortgage.
It is a brand new one with a new interest rate and new payment plan.
Common reasons why people refinance is:
to lower their current interest rate and mortgage payment , -------- to change the rate from ARM to a fixed rate mortgage,--------- to pull some cash out of their home equity,
to consolidate their consumer debts, since all consumer interest rates are usually higher than the mortgage rate. And also the debtors cannot claim consumer interest in income
tax, but mortgage interest can be claimed in income tax,
to improve the property value,------- --- To take off a co-signer on the mortgage etc.
REFINANCING TO GET NEW RATE CAN BE BENEFICIAL IF YOUR CURRENTLY HAVE A HIGHER RATE THAN THE ACTUAL MARKET RATE.
--------------------------------------------------------------------------------------------------------
HOME EQUITY MORTGAGE
A home equity mortgage is the value, money that the homeowners can get by leverage the equity they have build over the time in their homes. It is a lump sum of cash that a
borrower receives.
A home equity mortgage is useful because it provides homeowners with easy access to cash.
The interest of a home equity mortgage is lower than the credit cards loan, and it is also tax deductible.
-----------------------------------------------------------------------------------------------------------------------------------------------------
GRADUATED PAYMENT MORTGAGE:
A GRADUATED PAYMENT MORTGAGE, OFTEN REFERRED TO AS [GPM] IS A
MORTGAGE WITH LOW PAYMENTS WHICH GRADUALLY INCREASE OVER A SPECIFIC
TIME FRAME.
THESE PLANS ARE MOST GEARED TOWARDS YOUNG MEN AND WOMEN WHO CAN NOT
AFFORD LARGE PAYMENTS NOW, BUT CAN REALISTICALLY EXPECT TO DO BETTER
FINANCIALLY IN THE FUTURE. FOR INSTANCE MEDICAL STUDENT WHO IS JUST ABOUT
TO FINISH SCHOOL.
------------------------------------------------------------------------------------------------------------------------------------------------
WRAPAROUND MORTGAGE:
A WRAPAROUND MORTGAGE, IT IS A FINANCING ARRANGEMENT IN WHICH AN
EXISTING MORTGAGE IS REFINANCED.
THE LENDER, WHO AGREES TO PASS THROUGH PART OF THE MORTGAGE
PAYMENTS TO THE ORIGINAL MORTGAGE LENDER, COMBINES OR WRAPS THE
REMAINDER OF THE OLD MORTGAGE WITH THE NEW MORTGAGE AND THE
BORROWER MAKES ONE MONTHLY PAYMENT.
A WRAPAROUND MORTGAGE IS AN ALTERNATIVE TO REFINANCING THE ENTIRE
MORTGAGE LOAN WHEN A BORROWER NEEDS ADDITIONAL FUNDS
COMMON LOAN FRAUD SCHEMES
Source of actual amount of a buyer's down-payment,actual amount of closing costs paid by the buyer,an inflated appraised value for the property that is collateral for the loan,
false information about the borrower's credit worthiness,false statement about who will live in the property, for instance, you claim the property will be owner occupied when you
actually intend to rent it.
SECRET SECOND MORTGAGE
This occurs when someone loans money to the buyer so that he/she can close on the home, but the second loan is not disclose to the primary lender.
A second mortgage or deed of trust is usually recorded a few days after the first, securing the debt by placing an additional lien on the property.
FOR ALL QUESTIONS ABOUT REAL ESTATE, MORTGAGE & LOANS, HOME REFINANCING,HOME EQUITY ETC. CONTACT: VISION MORTGAGE BANK,INC. MR. ANTONY
AT (786)709-6577
---------------------------------------------------------------------------------------------------
BOGUS EARNEST MONEY DEPOSIT.
This is the offer to purchase contract, states that the buyer has paid more down than what he/she really has. "POC" PAID OUTSIDE OF CLOSING. FALSE GIFTS:
Buyers close with gift money all the time, but lenders verify that if the money is not a loan, asking the donor to sign a statement that repayment is not required.
CONTRACT KITING:
In this loan fraud scheme, one contract shows the actual price of the house, and the one give to the lender shows a higher price, resulting in a scheme to loan to value ratio ]LTV]
THE BOTTOM LINE: MAKING A FALSE STATEMENT TO A LENDER IS A FEDERAL CRIME.
DON'T DO IT ON YOUR OWN, AND DON'T DO IT BECAUSE SOMEONE ENCOURAGE YOU TO DO SO.
MORTGAGE FRAUD IS PUNISHABLE BY LAWS WITH FINES AND PRISON TERM.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source of actual amount of a buyer's down-payment,actual amount of closing costs paid by the buyer,an inflated appraised value for the property that is collateral for the loan,
false information about the borrower's credit worthiness,false statement about who will live in the property, for instance, you claim the property will be owner occupied when you
actually intend to rent it.
SECRET SECOND MORTGAGE
This occurs when someone loans money to the buyer so that he/she can close on the home, but the second loan is not disclose to the primary lender.
A second mortgage or deed of trust is usually recorded a few days after the first, securing the debt by placing an additional lien on the property.
FOR ALL QUESTIONS ABOUT REAL ESTATE, MORTGAGE & LOANS, HOME REFINANCING,HOME EQUITY ETC. CONTACT: VISION MORTGAGE BANK,INC. MR. ANTONY
AT (786)709-6577
---------------------------------------------------------------------------------------------------
BOGUS EARNEST MONEY DEPOSIT.
This is the offer to purchase contract, states that the buyer has paid more down than what he/she really has. "POC" PAID OUTSIDE OF CLOSING. FALSE GIFTS:
Buyers close with gift money all the time, but lenders verify that if the money is not a loan, asking the donor to sign a statement that repayment is not required.
CONTRACT KITING:
In this loan fraud scheme, one contract shows the actual price of the house, and the one give to the lender shows a higher price, resulting in a scheme to loan to value ratio ]LTV]
THE BOTTOM LINE: MAKING A FALSE STATEMENT TO A LENDER IS A FEDERAL CRIME.
DON'T DO IT ON YOUR OWN, AND DON'T DO IT BECAUSE SOMEONE ENCOURAGE YOU TO DO SO.
MORTGAGE FRAUD IS PUNISHABLE BY LAWS WITH FINES AND PRISON TERM.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
MORTGAGE LOANS
HOW TO UNDERSTAND THE HOME LOAN PROCESS?
Understand that in order to finance or refinance a loan the lender requires documentation to verify and substantiate your employment, credit and financial situation to assure its investors that you have the ability to
repay the MONEY. This documentation may consist of tax returns, recent pay stubs, bank statements, verifications of employment, deposit and rent or mortgage, appraisal, purchase agreement, divorce decrees,
bankruptcy papers and any other information the lender deems necessary.
2
Step Two
Understand that you will have to provide a completed loan application and the requested documentation to your loan agent. YOU CAN CALL VISION MORTGAGE BANK AT: 786-709-6577 ASK FOR MR. ANTONY. The
loan agent will be the intermediary between you, the borrower, and the underwriter. The underwriter is the person who goes through the documentation and information you have provided with a fine-tooth comb to
make sure everything fits the program requirements. You will not be able to speak with underwriter - it is the loan agent's job to communicate information to and from the borrower.
3
Step Three
Expect to wait. It may take several days to a week to get the initial response from the underwriter. The underwriter will either approve the loan as it is or, more likely, provide a list of items that need clarification or
additional documentation.
4
Step Four
Expect to be asked to provide additional items. Once you give these to your agent, it will be a few days before you hear back again. The underwriter may come back to the agent several times with certain
"conditions." Don't be concerned. The underwriter is simply doing an underwriter's job. At this point, what you have is conditional approval - meaning, your loan is approved pending removal of these conditions.
5
Step Five
Understand that the entire loan process typically takes between two and four weeks, possibly longer, depending on the particular circumstances of the loan. Loans for self-employed people, people with poor credit, or
people with unusual circumstances often take longer because of the additional documentation required.
6
Step Six
Realize that once the loan is approved, the loan papers will be sent to the escrow/title company or your attorney. The escrow officer or attorney will add other documents to the file created from information received
from the lender. Once these documents are prepared, the escrow officer or attorney will contact you to set up an appointment for you to come in and sign your papers.
7
Step Seven
Expect to wade through and sign a mountain of papers. The escrow officer or attorney should provide you with a copy of everything you sign.
8
Step Eight
Understand that from the date you sign your papers, it will be another two or three days until the loan is funded, which is when the money is transferred.
9
Step Nine
Know that the loan will close, or record (with the county), one or two days after the loan has been funded. Once the loan is recorded, the transaction is complete.
TIPS & WARNINGS--------------------------------------------
HOW TO GET A HOME LOAN?
Securing a home loan is the most important step in the home-buying process. Here are the basics for getting your financing.
STEPS1
Step One
Find A MORTGAGE BROKER AT VISION MORTGAGE BANK.(786)709-6577 {SOUTH FLORIDA} or a lender. Ask friends, family or co-workers for referrals.
2 Step Two , Fill out a loan application.
3
Step Three
Get an estimate of closing costs FROM VISION MORTGAGE BANK . , the mortgage firm or the lender is required to provide this statement to you within three days of receiving the loan application. Make sure to ask
what type of loan program your lender has selected for you, including the rates, terms and any special information, such as prepayment penalties.
4
Step Four , Compare costs, fees and terms of loans if you are working with more than one lender.
5
Step Five, negotiate fees. Sometimes you can negotiate the amount of fees or loan points (a point is 1 percent of the loan amount) the lender charges you.
6
Step Six
Talk to your mortgage broker to consider lowering your interest rate by paying more points. The relationship of interest rate to points paid is an inverse one; the more points you pay, the lower the interest rate.
7
Step Seven
Provide required documentation.
Step Eight
Pay any up-front fees. Sometimes the lender requires that the appraisal, credit report or processing fee be paid at the beginning.
9
Step Nine
Review loan papers. Approximately one week prior to closing, loan papers will be ready for your review. Make sure the loan matches the original quote you were given.
10
Step Ten
Sign your loan papers and deposit your down payment funds into your account four to six days prior to closing.
11
Step Eleven
Bring a cashier's check for the down payment to the title company, escrow company or attorney handling the closing. The lender will send the title company a check for the loan amount.
12
Step Twelve
Get ready to congratulate yourself. Once the transaction closes and you have signed off on all contingencies, and received a copy of the deed and a set of keys, you own the home.
TIPS AND WARNINGS HOW TO GET PREQUALIFY FOR A HOME LOAN?
The first and most important step in buying a home is getting prequalified for a home loan.
BY GETTING PREQUALIFIED, YOU IMMEDIATELY FIND YOURSELF IN A STRONGER NEGOTIATION POSITION.
YOU MADE YOURSELF MORE ATTRACTIVE TO SELLERS.
PRE-APPROVAL CAN SPEED UP THE BUYING PROCESS AND IMPROVE YOUR CHANCE OF REACHING AN AGREEMENT ON THE PURCHASE PRISE.
CALL MR. ANTONY AT VISION MORTGAGE BANK 786-709-6577
Instructions
Difficulty: Moderate
TIPS1
Step One
Get a referral for a lender or mortgage broker from a friend, , co-worker or real estate broker.
2
Step Two
Provide the following information: gross monthly income and total monthly payments (car payments, minimum monthly payments on credit cards, child support payments and all payments you have to make every
month).
3
Step Three
Get your "ratios." You or your lender can add all your debts together and compare that number to your income to arrive at your total debt-to-income ratio. Your percentage should be under 36 for the best interest rate.
The lower the number, the better (see Related eHows).
4
Step Four
Give your lender authorization to pull your credit report. The report should include a FICO (Fair, Isaac and Co.) score, which is the credit scoring system most widely used by lenders. (A credit score is a system of
calculating the risk of lending to you based on several factors, including how long you've been at your present job, your occupation, how long you've been at your present address, the ratio of your balances to your
available credit lines, whether you are a home owner, the number of recent inquiries into your credit, your age, the number of credit lines you have, the years you have had a credit in the credit bureau database, and
such derogatory items as bankruptcy, collections against you, foreclosures and slow pays.) A FICO score of 680 or better is considered "A+" (excellent), and with good ratios and other positive factors should get you
the best interest rates available.
5
Step Five
Have a lender prepare a letter of prequalification for you. The letter should state that your initial financial and credit information has been reviewed and looks good, though it will also state that the letter is not a
guarantee of a loan.
Once you find a home and are ready to write an offer, have your lender or mortgage broker write a letter of prequalification only for the loan amount you're seeking with that offer. That way the seller doesn't know if you
can afford more.
If you're self-employed or have been on the job for less than two years, the lender may require additional information.
You don't have to use the same lender that prequalified you. Shop around and compare rates.
Prequalified is not the same as preapproved. In a hot market, you're going to want to go the extra step and get preapproved for a home loan before you make an offer on a home.
Lenders consider many factors in prequalifying you for a loan, including credit, income and debt, type of property and amount of down payment.b
HOW TO UNDERSTAND THE HOME LOAN PROCESS?
Understand that in order to finance or refinance a loan the lender requires documentation to verify and substantiate your employment, credit and financial situation to assure its investors that you have the ability to
repay the MONEY. This documentation may consist of tax returns, recent pay stubs, bank statements, verifications of employment, deposit and rent or mortgage, appraisal, purchase agreement, divorce decrees,
bankruptcy papers and any other information the lender deems necessary.
2
Step Two
Understand that you will have to provide a completed loan application and the requested documentation to your loan agent. YOU CAN CALL VISION MORTGAGE BANK AT: 786-709-6577 ASK FOR MR. ANTONY. The
loan agent will be the intermediary between you, the borrower, and the underwriter. The underwriter is the person who goes through the documentation and information you have provided with a fine-tooth comb to
make sure everything fits the program requirements. You will not be able to speak with underwriter - it is the loan agent's job to communicate information to and from the borrower.
3
Step Three
Expect to wait. It may take several days to a week to get the initial response from the underwriter. The underwriter will either approve the loan as it is or, more likely, provide a list of items that need clarification or
additional documentation.
4
Step Four
Expect to be asked to provide additional items. Once you give these to your agent, it will be a few days before you hear back again. The underwriter may come back to the agent several times with certain
"conditions." Don't be concerned. The underwriter is simply doing an underwriter's job. At this point, what you have is conditional approval - meaning, your loan is approved pending removal of these conditions.
5
Step Five
Understand that the entire loan process typically takes between two and four weeks, possibly longer, depending on the particular circumstances of the loan. Loans for self-employed people, people with poor credit, or
people with unusual circumstances often take longer because of the additional documentation required.
6
Step Six
Realize that once the loan is approved, the loan papers will be sent to the escrow/title company or your attorney. The escrow officer or attorney will add other documents to the file created from information received
from the lender. Once these documents are prepared, the escrow officer or attorney will contact you to set up an appointment for you to come in and sign your papers.
7
Step Seven
Expect to wade through and sign a mountain of papers. The escrow officer or attorney should provide you with a copy of everything you sign.
8
Step Eight
Understand that from the date you sign your papers, it will be another two or three days until the loan is funded, which is when the money is transferred.
9
Step Nine
Know that the loan will close, or record (with the county), one or two days after the loan has been funded. Once the loan is recorded, the transaction is complete.
TIPS & WARNINGS--------------------------------------------
HOW TO GET A HOME LOAN?
Securing a home loan is the most important step in the home-buying process. Here are the basics for getting your financing.
STEPS1
Step One
Find A MORTGAGE BROKER AT VISION MORTGAGE BANK.(786)709-6577 {SOUTH FLORIDA} or a lender. Ask friends, family or co-workers for referrals.
2 Step Two , Fill out a loan application.
3
Step Three
Get an estimate of closing costs FROM VISION MORTGAGE BANK . , the mortgage firm or the lender is required to provide this statement to you within three days of receiving the loan application. Make sure to ask
what type of loan program your lender has selected for you, including the rates, terms and any special information, such as prepayment penalties.
4
Step Four , Compare costs, fees and terms of loans if you are working with more than one lender.
5
Step Five, negotiate fees. Sometimes you can negotiate the amount of fees or loan points (a point is 1 percent of the loan amount) the lender charges you.
6
Step Six
Talk to your mortgage broker to consider lowering your interest rate by paying more points. The relationship of interest rate to points paid is an inverse one; the more points you pay, the lower the interest rate.
7
Step Seven
Provide required documentation.
Step Eight
Pay any up-front fees. Sometimes the lender requires that the appraisal, credit report or processing fee be paid at the beginning.
9
Step Nine
Review loan papers. Approximately one week prior to closing, loan papers will be ready for your review. Make sure the loan matches the original quote you were given.
10
Step Ten
Sign your loan papers and deposit your down payment funds into your account four to six days prior to closing.
11
Step Eleven
Bring a cashier's check for the down payment to the title company, escrow company or attorney handling the closing. The lender will send the title company a check for the loan amount.
12
Step Twelve
Get ready to congratulate yourself. Once the transaction closes and you have signed off on all contingencies, and received a copy of the deed and a set of keys, you own the home.
TIPS AND WARNINGS HOW TO GET PREQUALIFY FOR A HOME LOAN?
The first and most important step in buying a home is getting prequalified for a home loan.
BY GETTING PREQUALIFIED, YOU IMMEDIATELY FIND YOURSELF IN A STRONGER NEGOTIATION POSITION.
YOU MADE YOURSELF MORE ATTRACTIVE TO SELLERS.
PRE-APPROVAL CAN SPEED UP THE BUYING PROCESS AND IMPROVE YOUR CHANCE OF REACHING AN AGREEMENT ON THE PURCHASE PRISE.
CALL MR. ANTONY AT VISION MORTGAGE BANK 786-709-6577
Instructions
Difficulty: Moderate
TIPS1
Step One
Get a referral for a lender or mortgage broker from a friend, , co-worker or real estate broker.
2
Step Two
Provide the following information: gross monthly income and total monthly payments (car payments, minimum monthly payments on credit cards, child support payments and all payments you have to make every
month).
3
Step Three
Get your "ratios." You or your lender can add all your debts together and compare that number to your income to arrive at your total debt-to-income ratio. Your percentage should be under 36 for the best interest rate.
The lower the number, the better (see Related eHows).
4
Step Four
Give your lender authorization to pull your credit report. The report should include a FICO (Fair, Isaac and Co.) score, which is the credit scoring system most widely used by lenders. (A credit score is a system of
calculating the risk of lending to you based on several factors, including how long you've been at your present job, your occupation, how long you've been at your present address, the ratio of your balances to your
available credit lines, whether you are a home owner, the number of recent inquiries into your credit, your age, the number of credit lines you have, the years you have had a credit in the credit bureau database, and
such derogatory items as bankruptcy, collections against you, foreclosures and slow pays.) A FICO score of 680 or better is considered "A+" (excellent), and with good ratios and other positive factors should get you
the best interest rates available.
5
Step Five
Have a lender prepare a letter of prequalification for you. The letter should state that your initial financial and credit information has been reviewed and looks good, though it will also state that the letter is not a
guarantee of a loan.
Once you find a home and are ready to write an offer, have your lender or mortgage broker write a letter of prequalification only for the loan amount you're seeking with that offer. That way the seller doesn't know if you
can afford more.
If you're self-employed or have been on the job for less than two years, the lender may require additional information.
You don't have to use the same lender that prequalified you. Shop around and compare rates.
Prequalified is not the same as preapproved. In a hot market, you're going to want to go the extra step and get preapproved for a home loan before you make an offer on a home.
Lenders consider many factors in prequalifying you for a loan, including credit, income and debt, type of property and amount of down payment.b
WWW.KNOWLEDGEFINANCIALGROUP.COM
HOME SELLING---CALL
Sell your home quick and fast for the top price
Our proven selling techniques with our diverse kind of
advertisement can really help selling your home
Sell your home quick and fast for the top price
Our proven selling techniques with our diverse kind of
advertisement can really help selling your home
We take the time to analyze every individual situation and
needs to find the best mortgage loan.
Whether you’re a first time home buyer or an experience
buyer, we work hard to find you the home loan you desired.
needs to find the best mortgage loan.
Whether you’re a first time home buyer or an experience
buyer, we work hard to find you the home loan you desired.
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KNOWLEDGE FINANCIALGROUP.COM
REVERSE MORTGAGE
NO MORTGAGE PAYMENTS EVER AGAIN: IF YOU OWNED A HOME AS YOUR PERSONAL RESIDENCE.-----------------TO IMPROVE YOUR QUALITY OF LIFE AND LIVE WITH NO STRESS!
IF YOU'RE 62 YEARS OF AGE OR OLDER, YOU CAN ACHIEVE THIS, THROUGH A REVERSE MORTGAGE, REGULATED BY THE U.S. GOVERNMENT.
YOU CAN ACCESS THE EQUITY OF YOUR PROPERTY, IN A LUMP AMOUNT, LINE OF CREDIT, MONTHLY PAYMENTS, OR COMBINATION OF ALL THREE.
{ADVANTAGE OF REVERSE MORTGAGE}
NO MONTHLY MORTGAGE PAYMENTS,---------REMAIN IN YOUR HOME,---------RETAIN OWNERSHIP OF YOUR PROPERTY
NO CREDIT OR INCOME REQUIREMENTS.
CALL ANTONY FOR AN INITIAL CONSULTATION TO FULLY REVIEW YOUR OPTIONS.----786-----
NO MORTGAGE PAYMENTS EVER AGAIN: IF YOU OWNED A HOME AS YOUR PERSONAL RESIDENCE.-----------------TO IMPROVE YOUR QUALITY OF LIFE AND LIVE WITH NO STRESS!
IF YOU'RE 62 YEARS OF AGE OR OLDER, YOU CAN ACHIEVE THIS, THROUGH A REVERSE MORTGAGE, REGULATED BY THE U.S. GOVERNMENT.
YOU CAN ACCESS THE EQUITY OF YOUR PROPERTY, IN A LUMP AMOUNT, LINE OF CREDIT, MONTHLY PAYMENTS, OR COMBINATION OF ALL THREE.
{ADVANTAGE OF REVERSE MORTGAGE}
NO MONTHLY MORTGAGE PAYMENTS,---------REMAIN IN YOUR HOME,---------RETAIN OWNERSHIP OF YOUR PROPERTY
NO CREDIT OR INCOME REQUIREMENTS.
CALL ANTONY FOR AN INITIAL CONSULTATION TO FULLY REVIEW YOUR OPTIONS.----786-----
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WHAT GUIDELINES ARE REQUIRED FOR A MORTGAGE LOAN?
Mortgages are used by individuals and businesses wishing to make large value purchase of real estate without payment the entire value of the purchase up
front. Mortgages are also known as lien against property, or claims on property. Mortgage is a legal agreement that creates an interest in a real estate
property between borrower and the lender.
HOW TO UNDERSTAND THE HOME LOAN PROCESS?
Understand that in order to finance or refinance a loan the lender requires documentation to verify and substantiate your employment, credit and financial
situation to assure its investors
that you have the ability to repay the MONEY
HOME REFINANCING: 10 GREAT REASONS TO REFINANCE A PROPERTY. NOW IT'S THE BEST TIME FOR REFINANCING, THE INTEREST RATE IS
VERY LOW.
MORTGAGE GOLSSARY/ TERMS AND TERMINOLOGY / UNDERSTANDING YOUR MORTGAGE STATEMENT
MORTGAGE LOAN MODIFICATION PROGRAMS; AN ALTERNATIVE TO REDUCE MONTHLY MORTGAGE PAYMENT, TO AVOID FORECLOSURE, TO SAVE
YOUR CREDIT RATING, TO SAVE YOUR PROPERTY.
REVERSE MORTGAGE
NO MORTGAGE PAYMENTS EVER AGAIN: IF YOU OWNED A HOME AS YOUR PERSONAL RESIDENCE.
TO IMPROVE YOUR QUALITY OF LIFE AND LIVE WITH NO STRESS!
IF YOU'RE 62 YEARS OF AGE OR OLDER, YOU CAN ACHIEVE THIS, THROUGH A REVERSE MORTGAGE, REGULATED BY THE U.S. GOVERNMENT.
FINANCING YOUR REAL ESTATE INVESTMENT; BUYING YOUR FIRST, SECOND, AND OR THIRD PROPERTY. HOW AND WHERE TO FIND MONEY? CLICK
RIGHT HERE!
FHA: F H A MORTGAGE LOANS, THE GOVERNMENT IS THERE TO HELP YOU PURCHASE YOUR HOME. PLEASE CONTACT US WE WILL SHOW YOU
THE WAY .
MORTGAGE LOAN PRE-QUALIFICATION, LOW INTEREST RATES,
8 Reasons to Get Pre-Approved for a Home Loan
Learn why pre-approval is one of the smartest moves you can make when shopping for a home
Subprime Mortgage
 A type of mortgage that is normally made out to borrowers with lower credit ratings. As a result of the borrower's lowered credit rating, a
conventional mortgage is not offered because the lender views the borrower as having a larger-than-average risk of defaulting on the loan.
FINANCING YOUR REAL ESTATE INVESTMENT; BUYING YOUR FIRST, SECOND, AND OR THIRD PROPERTY. HOW AND WHERE TO FIND MONEY? CLICK
RIGHT HERE!
RENTAL PROPERTY / COMMERCIAL REAL ESTATE / COMMERCIAL LEASE Tips for Making Solid Business Agreements and Contracts
Mortgages are used by individuals and businesses wishing to make large value purchase of real estate without payment the entire value of the purchase up
front. Mortgages are also known as lien against property, or claims on property. Mortgage is a legal agreement that creates an interest in a real estate
property between borrower and the lender.
HOW TO UNDERSTAND THE HOME LOAN PROCESS?
Understand that in order to finance or refinance a loan the lender requires documentation to verify and substantiate your employment, credit and financial
situation to assure its investors
that you have the ability to repay the MONEY
HOME REFINANCING: 10 GREAT REASONS TO REFINANCE A PROPERTY. NOW IT'S THE BEST TIME FOR REFINANCING, THE INTEREST RATE IS
VERY LOW.
MORTGAGE GOLSSARY/ TERMS AND TERMINOLOGY / UNDERSTANDING YOUR MORTGAGE STATEMENT
MORTGAGE LOAN MODIFICATION PROGRAMS; AN ALTERNATIVE TO REDUCE MONTHLY MORTGAGE PAYMENT, TO AVOID FORECLOSURE, TO SAVE
YOUR CREDIT RATING, TO SAVE YOUR PROPERTY.
REVERSE MORTGAGE
NO MORTGAGE PAYMENTS EVER AGAIN: IF YOU OWNED A HOME AS YOUR PERSONAL RESIDENCE.
TO IMPROVE YOUR QUALITY OF LIFE AND LIVE WITH NO STRESS!
IF YOU'RE 62 YEARS OF AGE OR OLDER, YOU CAN ACHIEVE THIS, THROUGH A REVERSE MORTGAGE, REGULATED BY THE U.S. GOVERNMENT.
FINANCING YOUR REAL ESTATE INVESTMENT; BUYING YOUR FIRST, SECOND, AND OR THIRD PROPERTY. HOW AND WHERE TO FIND MONEY? CLICK
RIGHT HERE!
FHA: F H A MORTGAGE LOANS, THE GOVERNMENT IS THERE TO HELP YOU PURCHASE YOUR HOME. PLEASE CONTACT US WE WILL SHOW YOU
THE WAY .
MORTGAGE LOAN PRE-QUALIFICATION, LOW INTEREST RATES,
8 Reasons to Get Pre-Approved for a Home Loan
Learn why pre-approval is one of the smartest moves you can make when shopping for a home
Subprime Mortgage
 A type of mortgage that is normally made out to borrowers with lower credit ratings. As a result of the borrower's lowered credit rating, a
conventional mortgage is not offered because the lender views the borrower as having a larger-than-average risk of defaulting on the loan.
FINANCING YOUR REAL ESTATE INVESTMENT; BUYING YOUR FIRST, SECOND, AND OR THIRD PROPERTY. HOW AND WHERE TO FIND MONEY? CLICK
RIGHT HERE!
RENTAL PROPERTY / COMMERCIAL REAL ESTATE / COMMERCIAL LEASE Tips for Making Solid Business Agreements and Contracts
REAL ESTATE FINANCING:
HOW AND WHERE TO FIND MONEY TO BUY A PROPERTY
PRE-QUALIFICATION
MORTGAGE LOAN PRE-QUALIFICATION, LOW INTEREST RATES. CLICK HERE
HOME REFINANCING
RATES ARE STILL NEAR HISTORIC LOWS
IT MAY BE A GOOD TIME NOW TO REFINANCE!
LEARN MORE...
COMMERCIAL MORTGAGE LOANS:
COMMERCIAL MORTGAGES, COMMERCIAL REAL ESTATE FOR INVESTORS
HOW AND WHERE TO FIND MONEY TO BUY A PROPERTY
PRE-QUALIFICATION
MORTGAGE LOAN PRE-QUALIFICATION, LOW INTEREST RATES. CLICK HERE
HOME REFINANCING
RATES ARE STILL NEAR HISTORIC LOWS
IT MAY BE A GOOD TIME NOW TO REFINANCE!
LEARN MORE...
COMMERCIAL MORTGAGE LOANS:
COMMERCIAL MORTGAGES, COMMERCIAL REAL ESTATE FOR INVESTORS
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Adjustable Conventional Loans
An adjustable-rate conventional loan means the loan is
adjustable, it can fluctuate. Some loans are fixed for a certain
period of time, and then they turn into adjustable-rate loans.
Here are three popular types of adjustable conventional loans:
•3 / 1 ARM. This loan is fixed for 3 years, and then it begins to
adjust for the remaining 27 years.
•5 /1 ARM. This loan is fixed for 5 years, and then it begins to
adjust for the remaining 25 years.
•7 / 1 ARM. This loan is fixed for 7 years, and then it begins to
adjust for the remaining 23 years.
An adjustable-rate conventional loan means the loan is
adjustable, it can fluctuate. Some loans are fixed for a certain
period of time, and then they turn into adjustable-rate loans.
Here are three popular types of adjustable conventional loans:
•3 / 1 ARM. This loan is fixed for 3 years, and then it begins to
adjust for the remaining 27 years.
•5 /1 ARM. This loan is fixed for 5 years, and then it begins to
adjust for the remaining 25 years.
•7 / 1 ARM. This loan is fixed for 7 years, and then it begins to
adjust for the remaining 23 years.
Mortgage Loan Types - Types of
Mortgage Loan Programs ..
Programs
• Fixed-rate Mortgage Types
This is the granddaddy of them all. Today you can choose from 5-
year, 10-year, 15-year, 20-year-, 30-year, 40-year and even 50-
year fixed-rate mortgages, all of which are completely amortized.
Advertisement• FHA Loans
FHA mortgage loan types are insured by the government
through mortgage insurance that is funded into the loan. First-
time home buyers are ideal candidates for an FHA loan because
the down payment requirements are minimal and FICO scores
do not matter.
• VA Loans
This type of government loan is available to veterans who have
served in the U.S. Armed Services and, in certain cases, to
spouses of deceased veterans.
The requirements vary depending on the year of service and
whether the discharge was honorable or dishonorable. The
main benefit of a VA loan is the borrower does not need a down
payment.
The loan is guaranteed by the Department of Veterans Affairs
but funded by a conventional lender.
• Interest-only Mortgage Types
Calling a mortgage loan type an "interest-only mortgage" is a bit
misleading because these loans are not really interest-only,
meaning the borrower pays only interest on the loan. Interest-
only loans contain an option to make an interest-only payment.
The option is available only for a certain period of time.
However, some junior mortgages are indeed interest-only and
require a balloon payment, consisting of the original loan
balance at maturity.
Hybrid Types of Mortgage Loans
• Option ARM Mortgage Types
Option ARM loans are complicated. They are adjustable-rate
mortgages, meaning the interest rate fluctuates periodically.
Like the name implies, borrowers can choose from a variety of
payment options and index rates. But beware of the minimum
payment option, which can result in negative amortization.
Advertisement• Combo/Piggyback
Mortgage Loan Types
This type of mortgage financing consists of two loans: a first
mortgage and a second mortgage. The mortgages can be
adjustable-rate mortgages or fixed-rate or a combination of the
two. Borrowers take out two loans when the down payment is
less than 20% to avoid paying private mortgage insurance.
• Adjustable-rate Mortgage Types
Adjustable-rate mortgages (ARMs) come
in many flavors, colors, and sizes. The interest rate fluctuates. It
can move up or down monthly, semi-annually, annually, or
remain fixed for a period of time before it adjusts.
• Mortgage Buydowns
Borrowers who want to pay a lower interest rate initially often
opt for mortgage buydowns. The interest rate is reduced
because fees are paid to lower the rate, which is why it's called
a buydown. Buyers, sellers or lenders can buy down the
interest rate for the borrower.
Specialty Mortgage Loan Types
• Streamlined-K Mortgage Loans
Like the 203K loan program, FHA has another program that
provides funds to a borrower to fix up a home by rolling the
funds into one loan. The dollar limits for repair work are lower
on a Streamlined-K loan, but it requires less paperwork and is
easier to obtain than a 203K.
• Bridge/Swing Loans
These types of mortgage loans are used when a seller has put a
home on the market -- but it has not yet sold -- and the seller
wants to borrow equity to buy another home. The seller's
existing home is used as security for a bridge (also called
swing) loan.
• Equity Mortgage Loan Types
Equity loans are second in position and junior to the existing
first mortgage. Borrowers take out equity loans to receive cash.
The loans can be adjustable, fixed, or a line of credit from which
the borrower can draw funds as needed.
• Reverse Mortgages
Reverse mortgages are available to any person over the age of
62 who has enough equity. Instead of making monthly payments
to the lender, the lender makes monthly payments to the
borrower for as long as the borrower resides in the home. The
interest rate can be fixed or adjustable. Get independent
advice from a trusted advisor before taking out a reverse
mortgage.
Mortgage Loan Programs ..
Programs
• Fixed-rate Mortgage Types
This is the granddaddy of them all. Today you can choose from 5-
year, 10-year, 15-year, 20-year-, 30-year, 40-year and even 50-
year fixed-rate mortgages, all of which are completely amortized.
Advertisement• FHA Loans
FHA mortgage loan types are insured by the government
through mortgage insurance that is funded into the loan. First-
time home buyers are ideal candidates for an FHA loan because
the down payment requirements are minimal and FICO scores
do not matter.
• VA Loans
This type of government loan is available to veterans who have
served in the U.S. Armed Services and, in certain cases, to
spouses of deceased veterans.
The requirements vary depending on the year of service and
whether the discharge was honorable or dishonorable. The
main benefit of a VA loan is the borrower does not need a down
payment.
The loan is guaranteed by the Department of Veterans Affairs
but funded by a conventional lender.
• Interest-only Mortgage Types
Calling a mortgage loan type an "interest-only mortgage" is a bit
misleading because these loans are not really interest-only,
meaning the borrower pays only interest on the loan. Interest-
only loans contain an option to make an interest-only payment.
The option is available only for a certain period of time.
However, some junior mortgages are indeed interest-only and
require a balloon payment, consisting of the original loan
balance at maturity.
Hybrid Types of Mortgage Loans
• Option ARM Mortgage Types
Option ARM loans are complicated. They are adjustable-rate
mortgages, meaning the interest rate fluctuates periodically.
Like the name implies, borrowers can choose from a variety of
payment options and index rates. But beware of the minimum
payment option, which can result in negative amortization.
Advertisement• Combo/Piggyback
Mortgage Loan Types
This type of mortgage financing consists of two loans: a first
mortgage and a second mortgage. The mortgages can be
adjustable-rate mortgages or fixed-rate or a combination of the
two. Borrowers take out two loans when the down payment is
less than 20% to avoid paying private mortgage insurance.
• Adjustable-rate Mortgage Types
Adjustable-rate mortgages (ARMs) come
in many flavors, colors, and sizes. The interest rate fluctuates. It
can move up or down monthly, semi-annually, annually, or
remain fixed for a period of time before it adjusts.
• Mortgage Buydowns
Borrowers who want to pay a lower interest rate initially often
opt for mortgage buydowns. The interest rate is reduced
because fees are paid to lower the rate, which is why it's called
a buydown. Buyers, sellers or lenders can buy down the
interest rate for the borrower.
Specialty Mortgage Loan Types
• Streamlined-K Mortgage Loans
Like the 203K loan program, FHA has another program that
provides funds to a borrower to fix up a home by rolling the
funds into one loan. The dollar limits for repair work are lower
on a Streamlined-K loan, but it requires less paperwork and is
easier to obtain than a 203K.
• Bridge/Swing Loans
These types of mortgage loans are used when a seller has put a
home on the market -- but it has not yet sold -- and the seller
wants to borrow equity to buy another home. The seller's
existing home is used as security for a bridge (also called
swing) loan.
• Equity Mortgage Loan Types
Equity loans are second in position and junior to the existing
first mortgage. Borrowers take out equity loans to receive cash.
The loans can be adjustable, fixed, or a line of credit from which
the borrower can draw funds as needed.
• Reverse Mortgages
Reverse mortgages are available to any person over the age of
62 who has enough equity. Instead of making monthly payments
to the lender, the lender makes monthly payments to the
borrower for as long as the borrower resides in the home. The
interest rate can be fixed or adjustable. Get independent
advice from a trusted advisor before taking out a reverse
mortgage.
Private Mortgage Insurance: What Is Mortgage
Insurance?
You Pay for Private Mortgage Insurance But it Doesn't Insure You..
There are several types of mortgage insurance, but the type that everybody
complains about is private mortgage insurance.
. Private mortgage insurance offers zero protection for the borrower.
. The type of mortgage insurance most people carry is the type that insures
the lender in the event the borrower stops paying the mortgage.
That's right, private mortgage insurance insures your lender.
===============
Why Do You Pay for Private Mortgage
Insurance?
Many borrowers take out private mortgage insurance (PMI)because their
lender requires it. The lender requires it because the borrower is putting
down less than 20% of the sales price as a down payment. The less a borrower
puts down, the higher the risk to the lender.
=============
How Do You Cancel Private Mortgage
Insurance?
Once your equity rises above 20%, either through paying down your mortgage
or appreciation, you might be eligible to stop paying PMI. The first step is to
call your lender and ask how you can cancel your private mortgage insurance.
The lender will want proof that your equity position is secure and exceeds
20%. It will get that proof by requiring you to pay for an independent appraisal.
Insurance?
You Pay for Private Mortgage Insurance But it Doesn't Insure You..
There are several types of mortgage insurance, but the type that everybody
complains about is private mortgage insurance.
. Private mortgage insurance offers zero protection for the borrower.
. The type of mortgage insurance most people carry is the type that insures
the lender in the event the borrower stops paying the mortgage.
That's right, private mortgage insurance insures your lender.
===============
Why Do You Pay for Private Mortgage
Insurance?
Many borrowers take out private mortgage insurance (PMI)because their
lender requires it. The lender requires it because the borrower is putting
down less than 20% of the sales price as a down payment. The less a borrower
puts down, the higher the risk to the lender.
=============
How Do You Cancel Private Mortgage
Insurance?
Once your equity rises above 20%, either through paying down your mortgage
or appreciation, you might be eligible to stop paying PMI. The first step is to
call your lender and ask how you can cancel your private mortgage insurance.
The lender will want proof that your equity position is secure and exceeds
20%. It will get that proof by requiring you to pay for an independent appraisal.
Hard Money Loan'
A loan of "last resort" or a short-term bridge
loan. Hard money loans are backed by the value of the property, not by the
credit worthiness of the borrower.
Since the property itself is used as the only protection against default by the
borrower, hard money loans have lower loan-to-value (LTV) ratios than
traditional loans.
============
Hard Money Loan..
Hard money loans carry interest rates even higher than traditional subprime
loans.
Since traditional lenders, such as banks, do not make hard money loans, hard
loan lenders are sometimes private individuals that see value in this type of
potentially risky venture.
Hard money loans are used in turnaround situations, short-term financing, and
by borrowers with poor credit but substantial equity in their property
A loan of "last resort" or a short-term bridge
loan. Hard money loans are backed by the value of the property, not by the
credit worthiness of the borrower.
Since the property itself is used as the only protection against default by the
borrower, hard money loans have lower loan-to-value (LTV) ratios than
traditional loans.
============
Hard Money Loan..
Hard money loans carry interest rates even higher than traditional subprime
loans.
Since traditional lenders, such as banks, do not make hard money loans, hard
loan lenders are sometimes private individuals that see value in this type of
potentially risky venture.
Hard money loans are used in turnaround situations, short-term financing, and
by borrowers with poor credit but substantial equity in their property
Hard Money Loans for Real Estate Investments
Investing in real estate can be a lucrative avenue for building wealth, and it’s
also an effective way to inject some diversity into your portfolio. While real
estate investment trusts (REITs) and real estate crowdfunding allow you to
invest passively, some investors may prefer to own property directly.
===============
How Hard Money Loans Work
Hard money loans, sometimes referred to as bridge loans, are short-term
lending instruments that real estate investors can use to finance an
investment project.
This type of loan is often a tool for house flippers or real estate developers
whose goal is to renovate or develop a property, then sell it for a profit. Hard
money loans are issued by private lenders.
===============
Unlike traditional bank loans, the ability to obtain hard money financing isn’t
determined by the borrower's creditworthiness. Instead, hard money lenders
use the value of the property itself in determining whether to make the loan.
Specifically, lenders focus on the “after repair value,” or ARV, which is an
estimate of what the property will be worth once the renovation or
development phase is complete.
============ Hard Money Loans for Real
Estate Investments..
Shorter repayment period – The purpose of a hard money loan is to
allow an investor to get a property ready to go on the market as quickly
as possible. As a result, these loans feature much shorter repayment
terms than traditional mortgage loans.
Investing in real estate can be a lucrative avenue for building wealth, and it’s
also an effective way to inject some diversity into your portfolio. While real
estate investment trusts (REITs) and real estate crowdfunding allow you to
invest passively, some investors may prefer to own property directly.
===============
How Hard Money Loans Work
Hard money loans, sometimes referred to as bridge loans, are short-term
lending instruments that real estate investors can use to finance an
investment project.
This type of loan is often a tool for house flippers or real estate developers
whose goal is to renovate or develop a property, then sell it for a profit. Hard
money loans are issued by private lenders.
===============
Unlike traditional bank loans, the ability to obtain hard money financing isn’t
determined by the borrower's creditworthiness. Instead, hard money lenders
use the value of the property itself in determining whether to make the loan.
Specifically, lenders focus on the “after repair value,” or ARV, which is an
estimate of what the property will be worth once the renovation or
development phase is complete.
============ Hard Money Loans for Real
Estate Investments..
Shorter repayment period – The purpose of a hard money loan is to
allow an investor to get a property ready to go on the market as quickly
as possible. As a result, these loans feature much shorter repayment
terms than traditional mortgage loans.
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