Loan Fraud
Loan Fraud
Each year uninformed homebuyers, usually first time purchasers or seniors fall victim to predatory lending known as loan fraud. True, there are many lenders, appraisers, brokers and other real estate professional that legit ably want to assist you in obtaining a nice comfortable home with a great loan but always remember that trite phrase buyer beware. Buying or refinancing a home is one of the most important financial decisions that we make, it is vital to learn as much as we can about the home loan process. That is why I decided to list the most important steps you can take so you won’t become the next victim of loan fraud. Step one is to Beware of false appraisals. You should have a good idea of what houses appraise for. Step two is to take your time and shop around. Competition is great for consumers. If you don’t appreciate one lender’s offer, there is always another one waiting. Step three is be certain that the costs and loan terms at closing are what you originally agreed to. Step four is do not be talked into lying about lie about your income, expenses, or cash available for downpayments in order to get a loan. Step five is get several quotes from multiple brokers or lenders so you know you’re being charged a fair interest rate based on your credit history, not your race or national origin. Step six is watch out for higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties. Step seven is be careful about disclosing things like your need of cash due to medical, unemployment or debt problems. You are very vulnerable in these cases. Step eight is do not sign a sales contract or loan documents that are blank or that contain information which is not true. Step nine is don’t strip your home’s equity by refinancing again and again when there is no benefit to you. The Final step is do not let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property. <A HREF="http://www.cerebrine.com">Loan Fraud Home</a>
Source: www.ArticlePros.com
How You Can Use Rehab, Refinance and Cash Out as Long-Term Wealth Building Real Estate Investing
Today we are discussing a somewhat advanced strategy for you to use after you have been in the creative real estate investing business for a while. I call this Rehab, Refinance, and Cash Out . This strategy can lead to true long term wealth and financial independence. This works very well in a buyers market like Memphis where prices have been quite flat for some time. You need to use this to augment your wholesaling for immediate income and retailing for bigger short term profits. Rehab, Refinance and Cash Out is a long term wealth building strategy and will be something you will be glad you did as it is a long term buy and hold strategy, and those are the strategies that lead to true wealth accumulation and financial independence. Let me explain how this works. You find a good middle to low end 3 bedroom home that you are able to buy from an out of state owner or other motivated seller that needs a little work and you buy at 60% of after repaired value. You buy the house using a hard money lender like http://www.pleaseclose.com/memphistrading and do your fix up and have a property management firm manage the property and put a renter in the house. The hard money lender will typically loan you up to 65% of the after repaired value to purchase the house which you use to buy the house and then repair it. Now that the home is repaired you obtain an investor friendly mortgage and cash out by refinancing at 80-90% of after repaired retail value and you should be doing this with properties where this strategy gives you back at least $10,000 at the refinance that you can use in your business any way you need. Do not use this money to live on, use it solely to grow your real estate business. Once you have done this strategy on 10 homes you should be able to keep finding better and better deals because you can close quickly as you have cash in hand to make things happen. More cash equals better deals and more opportunities. By the time you repeat this strategy 20 times you should have at least $200,000 cash plus about $200,000 equity and 20 homes giving you at least $2000 per month positive cash flow whether you decide to work this month or not since you have a property management company handling things for you. With average annual rent increases, within five years that $2,000 a month should grow to $4,000 a month. In 30 years you should have $2 to 3 million plus in paid off real estate. It s a good solid long term strategy to add to your immediate selling from wholesaling, retailing and lease options that the extra $200,000 in cash will help grow tremendously. The rent minus the management fees and all loan and other costs must leave you with positive cash flow or this strategy should be avoided. If you cannot cash out on the property I don t recommend holding it long term as you want to be able to use your best mortgages to cash out. You can purchase using http://www.pleaseclose.com/memphistrading if your Equifax credit score is above 550(which is bad credit) or you have a co-borrower who has an Equifax score over 550. A good investor friendly mortgage company will give you good rates if you are at 660 middle score or above and the very best rates if your middle score is 720 or above. Your first 10 investor mortgages in your name and 10 in your spouses name are the easiest to qualify and get the best deals. After those you really need a good investor mortgage company to work with. Take the time to find the real investor friendly mortgage companies that can help you get loans for 100 properties and not just the first ten and let them have the easy ones and the tougher ones. I do recommend having more than one good lender available though, but stick to the ones that specialize in investor loans. Find out from other investors who the most investor friendly mortgage companies are to use to refinance the repaired home. I do not advocate becoming a landlord as I do not believe this is a valuable usage of your time and energy. I highly recommend asking around and finding a good property management company that will charge you 10% or less to start out with and gradually lower that % as you add more and more properties. I feel this is an advanced strategy as you won t see any cash in your pocket from this strategy for 4-6 months after you find the deal which is a long time to work and not see any pay. If you are wholesaling and making consistent money each month then it shouldn t matter. This strategy will magnify the profits you make in your investing business in ways you might not have imagined. This strategy is a natural progression from wholesaling as you are already helping others find these kinds of deals, now you will be able to get the cash out typical of probably 2 wholesale deals, just paid slower, and at the same time building a nice future nest egg.David offers a free E-course on quick start strategies for getting started in real estate investing that is delivered free via email and tele-clinic at: http://www.FreeRealEstateInvestingCourses.com
Source: www.ArticlePros.com
