Draw Me Self

In the recent times the Real Estate industry has been on a boom in all its five sectors, i.e. Residential, Commercial, Industrial, Retail and Investment. Though there were many reports and rumors of crashing of mortgage and real estate market, its growth was rather steady in the first half and will grow further during the second half of the year 2007. This is apparent through economic indicators like steady rates, falling dollar, changing demographic tends, growing stock market and few other things.

The number of immigrants shifting to U.S.A is rising at a quick pace. It is estimated that by 2010, the number of immigrants will raise around 12 million. The demand for home ownership among this section will build up for almost 30% of the U.S market share by 2010. The US real estate industry is going nowhere, but to the top.

The mortgage market is on the rise as well. According to the Mortgage Originations Survey, fixed-rate loans made up 46.2% of dollar volume for first mortgage in the second half of the year. In the first half, fixed-rate loans made up 43.3% of those loan dollars. In terms of number of loans that originated during the time period, 60.5% were fixed-rate in the second half of the year, up from 54% in the first.

The total mortgage origination volume increased in the second half of the year up 11% in dollar amount compared with the first half and up 19.4% based on loan count, according to the group. The Mortgage Bankers Association said that the increase in originations was due to a rise in home-purchase volume and an increase in refinance volume.

With two of the major industries on boom, the stock market is also on a high. Though the financial markets have been unstable in recent weeks, credit situation has become tighter for some households and businesses, and the housing correction is ongoing, the economy seems likely to continue to get bigger at a moderate pace over coming time, supported by solid growth in employment and incomes and a healthy global economy.

Given the importance of well-functioning financial markets, surprisingly little attention has been paid to Mexico's recent progress in laying the foundation for a world-class financial system. A series of quiet reforms-many enacted in just the past few years-points to a financial big bang in the making. This rapidly growing market for mortgage-backed securities is a prime example of Mexico's success in financial development. Not long ago, financing for home purchases was scarce, and obtaining it typically required a down payment of 50 percent or more for a relatively costly adjustable-rate loan. Today, a rapidly growing number of people have access to competitively priced, fixed-rate mortgages.

All the above-mentioned facts tell the success story of the role played by the mortgage and real estate industry in economy's progress.

Overview

A home mortgage is the largest single investment that most people make during their lifetime. Using the equity that develops after regular mortgage payments and appreciation of the value on your home is an excellent way to access cash without taking out a high interest rate loan on a credit card or finance company. This revised mortgage loan is known as a home mortgage refinance. Structured correctly, the loan can provide cash for paying debts, making purchases, remodeling your home or almost any other large project you deem necessary. Depending upon the original interest rate you paid and the amount of equity you have built up over the years, you can even refinance and pay less money each month in repayment.

Paying cash for purchases

If you have large amounts of cash available and some significant purchases that are coming due, you can make use of a home mortgage refinance in order to cover the cost of the purchase so that you are not forced to charge an item to a credit card or access other high interest rate loans. You may have a medical bill that needs to be paid. You may want to purchase a swimming pool for your back yard or a grand piano. While not every purchase is a wise use of home equity money, you can make significant savings over the cost of credit card debt by using an equity loan.

Paying cash for debt reduction

When your debts get out of hand, particularly if they are high interest rate credit card debts, sometimes a home mortgage refinance is a good solution. By trading the equity in your home, you pay off the debts that are costing you high interest amounts so that your only debt is your home mortgage with an interest rate that is generally much lower than credit card interest rates. Having a single payment is usually less stressful than multiple payments and is easier to keep track of.

Paying cash for investments

Occasionally homeowners decide to use the equity in their home to pay for other investment vehicles that have a solid rate of return. This is a more risky approach to investment in some cases, but may pay off quite well. An example would be if there is an opportunity to purchase a fixer-upper property or other low cost real estate that could provide additional household income through rental or reselling. Using a home mortgage refinance is a generally straightforward way to access cash at good interest rates.

Paying cash for financial stability

A home mortgage refinance can be a useful way to increase your level of financial stability. With only one outstanding debt--your mortgage--you can easily prepare a budget that stays within the available income level of your household. The amount generally doesn't fluctuate and the due date is always the same, allowing for better planning on your part. This type of attention to income and outgo improves your credit history which makes your options in the event of a future emergency more available.

Gone are the days when money could be fetched either by mere mortgaging or financing something. Now it is time to get money via an amalgam of the two; i.e. Mortgage Refinance. Mortgage refinance is a smart idea to have a good credit sum and repay it in an easy fashion. In simple terms a refinanced mortgage is one where a borrower repays a previous loan by taking a new one. The main motive behind refinance mortgage is to get a lower interest rate, lowering their payments, or to take cash out of their home equity. So basically a mortgage refinance refers to taking a secured loan to replace the existing loan that is secured via some assets of yours.

Let us first delve into the factors that instigate a refinanced mortgage.
There are several reasons that instigate people to opt for refinance. For instance

(a) Mortgage refinance reduces the interest rate on your mortgage. It not only minimizes your EMIs or monthly installments but also brings down the total amount that you need to repay.

(b) Another wonderful feature of mortgage refinance is the reduction in the tenure of the loan, which is immensely effective in saving lot many bucks.

(c) Mortgage refinance is a smart idea to consolidate or fuse the amount you need to repay.

(d) Mortgages refinance serves you with the most essential thing i.e. cash in hand. You can draw on an equity built up in the house to acquire cash amount for several purposes such as your daughter's marriage, child education etc.

(e) If you want to have an adjustable-rate mortgage i.e. ARM and a fixed-rate loan in order to ensure you regarding the mortgage payment, mortgage refinance is a brilliant idea.

However there are other things to be taken into consideration. First and foremost mortgage refinancing can be recommended if the present rate on your mortgage is at least 2 percentage points higher than the existing market rate. Second you need to know that for how long you propose to stay in the house. Third you need to know that according to many sources given the costs of refinancing, it takes at least three years to realize completely the savings made from a relatively lower interest rate. Finally in order to go for mortgage refinance is to enlist complete expenditure of refinance and calculate your monthly installments. Knowing this will enable you to decide whether you should opt for refinance or not.

Well before going for a mortgage refinance you can also ask yourself questions ponder over questions such as- by how much will your existing monthly installment be lowered, what will be the financing cost that you will have to pay, how much will you owe in the house and for how much was the initial payment for the house made etc. Once after going through the various factors and conditions you feel it is appropriate to go for a mortgage refinance (which is true with most of the cases) then the first step is to consult a good real estate agent, mortgage lender as well as an attorney and other legal practitioners. Searching online is even an excellent option.

Real estate investing is an essential aspect. It is a wealth maker, and the question is could refinancing your home take you a step to success?

Real Estate - who doesn't love it? Owning a home is great, but there is an even greater aspect. That is being able to invest in property, and start to earn money from renting out the property.

The result is wealth building, and when you consider that refinancing your home could make this a reality, makes it an interesting point, and one to consider strongly.

The first step is to actually look through and find how much equity you have on the real estate. This will allow you to actually go through and find what you want.

The next step is to find a good piece of property. Then you will need the mortgage and this is likely better at producing good results.

There is a point to remember and that is credit rating, and credit rating is essential in this process. Income is another aspect. You need a balance, because the process of investing in real estate is a process which is dependent on lenders.

Lenders take a look at the different aspects of your credit rating. So getting refinance may actually need looking into to make sure that refinancing doesn't actually stop you getting a mortgage.

There are many lenders out there, so take a look. Great sources are banks, your existing mortgage lender, advertisements in tabloids, radio, and even the Internet.

About one third of all homes in the United States are owned free and clear.  Said another way, nearly two thirds of homes have one or more mortgages against them.  If you are, or will be, in the mortgaged category, there are a few things you should know

The core conditions for any real estate loan are:

• That it will be secured by your real property,
• It usually requires monthly payments,
• It will have a definite, or at least a calculable, interest rate, and
• It will have a specific term for full repayment to the lender.

People finance real estate, whether personal or investment property, to take advantage of the leverage available.  You invest just 10% or less of the purchase price from your personal resources and then borrow the rest from your lender. When the market is good to you, this magnifies your return on investment.  For example, if you put 10% down and the value of your property increases by 10%, you made 100% on your investment.  But, when the market moves against you, the flip side of appreciation is brutal.  Suppose you put that 10% down and the property value drops by just 10%.  Now you have no remaining equity at all.  A 100% paper loss of your money.  Of course, if you do not have to sell during the downturn, you don't have a real loss.  And, if you wait, appreciation will return.  The average rate in the US for the past 100 years or so has been about 3.5% per year.

If you want to use real estate financing on your home, there are two broad options.  There are Fixed interest rate loans and Variable or Adjustable interest rate loans. 

Fixed Rate Loans:

Fixed rate loans feature a constant interest rate and a constant payment.  The rate is a market question and varies hour by hour until you select the loan you want and "lock" the rate when you are ready to borrow the money.  The payment results from a formula that considers the amount borrower, the interest rate selected, and the number of months or years payments will be required to reduce the loan to zero.

Fixed rate loan terms are most commonly 15 years and 30 years.  However, they are available for 10 years, 20 years, 25 years, and 40 years as well.  Generally, the longer the payment period, the lower the monthly payment will be for the same loan.  However, as the term selected increases, so does the interest rate charged for the loan.  More importantly, the total amount of interest paid will greatly increase the longer term you select.

Fixed rate loans are generally thought of as safe and secure from the viewpoint of the borrower.  But, they may not always be the best choice if by best choice one means lowest total cost for the loan over the holding period.

Total cost for any loan over time is equal to the initial cost to borrow the money, the sum of the periodic payments made, and the amount needed to pay off the loan balance, including any prepayment fees.

Variable Rate Loans:

While a fixed rate loan offers a stable payment, regardless of what happens to the mortgage market after the loan is in place, there are some situations where another plan may be beneficial.  For example:

• Many adjustable loans have a lower initial interest rate than a fixed rate loan will have on the same day.  That means you can obtain a larger loan for the same payment, or the same loan amount for a lower initial payment.  The initial period can be selected by the borrower within limits offered by the lender.  The initial payment often remains the same for 6 months to one year from the loan funding date, but can run for longer terms such as 3 years, 5 years, or even 10 years.
• Some adjustable loans limit the interest rate change to specific intervals.  When the rate changes, the payment also changes to continue to pay off the remaining loan balance over the initial term, commonly 30 years.  These changes can be up or down and will follow the reference index for the loan with a fixed spread known as the "margin" established at the origination of the loan.
• Some adjustable loans limit the payment change to a maximum percentage of the prior payment, typically 7.5% of the prior year payment each year.  With this type of loan the interest rate can change as often as daily, but monthly and quarterly changes are more common.  This type of adjustable loan does include a negative amortization possibility.  This means that the amount you owe can increase, depending upon how you manage your loan payment choices.
• Last one to cover here are interest only loans.  These can be fixed or adjustable loans.  The key consideration is that each payment only covers the interest due since the last payment.  Eventually you will need to repay the principle in one large payment, called a balloon payment.

Each of these loans can be a best choice for a borrower, depending upon the borrower's needs and objectives.  Only careful analysis of the reasons for the loan and the purpose for the property will provide the best answer for each situation.

The collapse of the economy began with a reality wind blowing against the sub-prime mortgage house of cards. We are all living with the results of over aggressive lending practices and over active government intervention. With all these friends who needs any enemies?

As the market realigns, property valuations have plummeted. Some of you may even be "upside down" on your mortgages. Do you buy? Do you sell? Do you ride out the tsunami? This series will go through all the major questions that we normally encounter in determining the value of a property. What are the drivers? What are the inhibitors? What you need to know to get the best value.

What is Property valuation/real estate appraisal?

The purpose of property valuation is to provide a current market based value for a property in comparison to others in its immediate vicinity. So an appraisal is time, location and geography specific. It is a comparative value - not an absolute. Second, real estate appraisals are broken into two broad categories - residential and commercial. For the purposes of these papers we will be discussing strictly residential appraisals. Residential real estate appraisers are licensed by their respective states and have different levels of license levels based on the value of loan for the property. They have to take classes and pass certification tests to gain and maintain their license status. They are also usually bounded by county because of the way Multiple Listing Services (MLS) keep and sell their records. So a good appraiser really knows their geography and what to look for.

Why does it cost so much?

Real estate appraisers are traditionally independent contractors/business people - no appraisals = no money. So while you are paying a relatively standard one time fee (e.g., $400) they have to make sure they get as many appraisals in as they can to make any profit at all. How's that? After all they've got your $400. An appraiser has to cover all out of pocket expenses the same as any business person (education, health insurance, MLS fees, liability fees, business insurance, state fees - the list goes on). In addition a good appraiser may spend anywhere from 3 to 6 hours in preparation (looking for comparables, etc.), have a 45 minute or more drive time to location, 2 hours driving comparables and taking pictures and then another 1 -3 hours writing the report and then if the bank wants more info or kicks anything back they have to invest the time to answer questions, etc.

Also, is they get your request from another appraiser or from one of these new rip off government created middlemen called AMCs - they may have to split the fee. These are all just the costs of doing business. So when someone stops by for 30 to 60 minutes with a tape measure know that it's the tip of the iceberg and you're getting a good deal.

Do I own the appraisal?

The person/company who owns the appraisal is the person who commissioned it. So if you are looking for a house loan, your loan company "owns" the appraisal, not you because they are the commissioning agent. Even if you pay the appraiser, it makes no difference - you did not set up the transaction. Why is this important? The appraiser can't legally give you a copy of "your" appraisal - it's not yours. If you request an appraisal for loan purposes you may find that it's not accepted by the bank because they didn't request it or they don't know the appraiser. Catch 22 - yes but not made by the appraiser so don't shoot the messenger. There are all different kinds of appraisals (home, land, cost based, estate, chronological, etc.) and they are not interchangeable. Make sure if you are going to personally request an appraisal you know what it can be used for.

Why do I need a new Appraisal?

The market is so volatile that you may require a new appraisal every 6 -8 weeks for some lenders. In the last eight months housing values have dropped up to 40% in some areas. This means a $1 million house could be going for $600k now. This has made lenders very uneasy and they require more documentation and proof of values than before. Of course they were also the companies that caused the problem - Catch 22 for us. Refinancing has become more challenging as appraised values have gone done so rapidly that people who can manage the monthly payments are penalized because the "value" puts them underwater. For sellers it's even more emotionally challenging as they believe their homes have a higher value in the market than they do and they get upset, the real estate agents get upset because the deal doesn't close and the bank says the appraised value I what it is. The appraiser gets attacked for the state of the market instead the banks who created the issue.

How to determine value?

Value is determined the recent sales of similar homes within a given geographic radius. This means sales, not pending sales; people can ask what they want but banks want to know what other similar homes sold for - don't let your real estate agent mislead you. While the process is meant to be precise, "similar" is a very ambiguous term. Are we talking square footage, age, upgrades, tile vs. marble, pool vs yard, the variables can seem limitless. This is why online value services are worthless and if you pay for them you are wasting your money. Only a live onsite inspection can see and assess value properly. Lenders understand this. Geographic area is also becoming looser. Neighborhoods can change in character so rapidly that the normal radius for a comparable is 3 miles. However because sales have been so slow, comparables are fewer and fewer. Because the lenders require 3 -5 or more valuations per property, sometimes more; appraisers are searching outside the 3 mile radius for comparables. Bottom line - if you're looking to sell in the next 12 - 18 months don't do any major upgrades because you probably won't get your money back. Do what you need to please yourself and that's it.

Who's on First in this process?

People who refinance a lot or were thinking about a refinance in the last 6 months often ask this. Remember in the whole real estate process - the bank has the power - no one else. The recent complaints by others and finger pointing at appraised property values is really a distraction as banks with their loan programs and compensation systems drive everything. Because the banks lent money so freely and caused the crash - they have swung 1800 away and are now hoarding cash. To justify this approach they are squeezing loan agents and appraisers for more and more documentation of value. This is especially ironic for refis - people who are already good customers but just want to take advantage of some good rates. Bear in mind that banks don't have customers they care about for repeat business - you are a commodity. This squeeze play in the name of "making sure it doesn't happen again" drives up appraiser and loan agent costs which cannot be flowed through to the borrower. If you're a banker - no big deal - you're going to get a federal bailout bonus or in the government where it's basically "who cares it's not my money" - these things are not important because you don't really care about impact. BUT if you're working for a living on $400 increments with no guarantees of where your next job is coming from - it means a lot. The other guy in the process, who used to be a silent partner is the government. They have enacted new legislation to "clean up" the valuation process when it was never broken to begin with. This has backfired into more regulation raising lending costs in the process - some of which has been passed on to the borrower. It has also stifled loan creation - so while still have money they can't borrow because of government pressures. The psychology is beyond the normal mind to fathom. Everybody that is supposed to help likes to put more rocks in our backpacks as we go up the hill and tells us it's for our own good.

It also produces lower quality valuations and appraisals. Example, Fannie Mae requires that all appraisals they get be from "certified" appraisers. Because the government requires banks follow suit. Now the difference between a regular appraiser and a certified appraiser is a couple of classes and taking a test. So let's say you been an appraiser for 20 years, done thousands of honest appraisals, have an MBA and have an excellent reputation - guess what - thanks to the government your out of business until you get spend hundred to thousands more and take a test. But it's the same job you did before. So now you get a valuation done by someone with little practical experience who happened to take a test but gets the work. That's the answer to some of the basic questions you want to know in this market. If you're in the middle of this process and frustrated take it out at the ballot box but don't kick your appraiser - they're just the messenger.

An exit strategy is a means of escaping one's current unfavourable situation, or the company would be in a serious condition, leading to collapse of real estate market. A good and a practical exit strategy would automatically lead high success for the real estate investor. There are basically 4 types of exit strategies, namely,

Refinancing

Staging

Real Estate Appraisal/Getting Above the Market Price

Refinancing - It is the smart strategy to get rid of your existing mortgage through the proceeds of a new mortgage. In this manner you can very easily manage mortgage payments plus helps you in fetching the equity build up on the property that you have purchased until recently. Refinancing works really well if the interest rates have gone down, and you would therefore have greater debt ensuring high mortgage and eventually low interest rate per month. Moreover, Refinancing is used in most cases to improve overall cash flow.

Two Types of Refinancing:

No-Closing Cost

Borrowers with this type of refinancing typically pay few upfront fees to get the new mortgage loan. In fact, as long as the prevailing market rate is lower than your existing rate by 1.5-percentage point or more, it is financially beneficial to refinance because there is little or no cost in doing so.

Cash-Out

This type of refinance may not help lower the monthly payment or shorter mortgage periods. It can be used for home improvement, credit card and other debt consolidation if the borrower qualifies with their current home equity; they can refinance with a loan amount larger than their current mortgage and keep the cash difference.

Home Staging

Home staging is decorating your home with all the necessary things so that it looks look bigger, brighter, cleaner, warmer, more loving and, and above all it attracts the buyer's attention who can purchase it for good price. You can employ skilled craftsmen for home staging. These are called as Home Stagers. They can simply change the complete room interiors of your house to give a splendid feeling altogether.

Real Estate Appraisal/Getting Above the Market Price

Through this process, you develop a positive opinion of the value of your real estate property. It is based on the facts that all properties are heterogeneous in nature, as, no two properties are identical, and all properties differ from each other in their location, amongst other things. The positive opinion developed as the result will fetch you above the market price on your property, when you go for selling the property.

With the new standards of terms of credits lenders are performing a lot more due diligence on the borrowers than they were a year ago.

In residential loans, the loan information is focused on creditworthiness of the borrower.

On larger loans, loan officers are practicing due diligence in knowing what is happening with the paperwork and knowing what is in the file.

In previous years, if a credit score was high, lenders did not give the credit report much attention. A good broker will, regardless of a high score, give attention to the report regardless of a high score or not.

The broker needs to be able to create a package and submit it to appropriate lenders. In order to do this, the broker needs to understand what is important to the buyer.

A valuable broker is someone who can effectively showcase a loan while maintaining their client's best interest. They retain open communication to the client giving information such as who they have submitted the loan to and to feedback that may help the client. If the loan has options, they explain the options, give pros and cons and then help the client understand what is in their best interest.

When the real estate market crashed, the entire industry was affected. Now, everyone from loan officers, underwriters, processor, etc. are getting back to basics.

A knowledgeable loan officer is contacting lenders and understanding what the underwriting criteria is. It serves them to know how that lender treats stated self-employed borrowers and borrowers who have special circumstances. The officer needs to know what the lenders are looking for.

The new set of requirements now mean loan officers are required to reevaluate their pipe line, meaning reevaluate the types of borrowers they are working with.

If a borrower is wishing to refinance, a good loan officer will be proactive with their client. A restructure of assets may be in order to qualify to get out of an ARM. In some cases this can take up to a year to do.

A potential home buyer would greatly benefit from understanding what they can easily afford and to educate themselves on the fluctuations of the market.

Referrals are the best way to find a loan officer. Ask your broker, family, and friends if they know someone who is knowledgeable in the field. Getting a good loan officer can help save you money as well as, help in getting the property at the right price.

Mortgage brokers do a lot of business. The have relationships with lending sources, loan officers, and other people in the field. Their expertise is what the buyer is purchasing along with their opinion, which in a good broker, is not biased.

As circumstances change a broker can give advice as to what the options are. They can advise alternatives, explain costs among other types of information.

Twenty minutes spent talking with a great mortgage broker can reveal options worth looking into.

Based on excerpts from the commercial real estate investment talk show Capital Synergies. This episode's contributing guest speaker was Mr. Britt Miller, Vice President of Steelhead Capital. By Senior Staff Writer, William K. Matthews.

It is definitely a great investment to purchase a piece of real estate. However, this is definitely a costly decision until you are able to finally pay off this real estate. The good news is, if you'd like to pay off this real estate early, there are some ways that you can do so and it can definitely save you a lot of money if you choose this option. In most cases, you won't even have to see a banker since you can control the payments that you make. Of course, remember that the loan amount probably is not going to change, but if you deal with the interest in another way, in the long run you can end up saving quite a bit of money, which will really pay off.

One great way that you can work to pay off real estate early is to work on making sure you pay more money towards the principle of the loan that you have on a monthly basis. Just paying a little extra each month can make a big difference. When you are making your payment, there should be a place that you can choose to pay some extra money towards the principle amount of the loan. When you do this each month, you'll begin to lower the amount of the loan, which will save you quite a bit on interest over time.

Another option that you can use to pay off your real estate earlier than you would have is to put some money towards the mortgage as an extra payment. If you have a large amount of money come in, such as a bonus at work or a tax refund check come through, you can put it towards the mortgage to pay some of it off. This isn't as fun as spending the money, but over time you will save a lot of money, making it worth it. Even if you don't have enough to pay more each month, putting a large chunk towards the mortgage once or twice a year can have the same effects.

There are some people that have found that paying on the mortgage on real estate twice each month is a great idea. You may think you can't afford this, but really you only make half the payment, but you do it twice each month. This means you'll be paying the same amount. However, since you pay every two weeks, you'll pay less over time because interest can only build up every two weeks instead of for a whole month. This can make quite a difference over the long term and can save you money in the end.

The best methods of paying off real estate faster involve you working to pay the principle down so you don't have to pay as much money in interest over time. If you have the credit and your house will qualify, you may want to speak with a lender to see if it is possible for you to refinance the home. Whether you decide to refinance the mortgage or you try one of the other ways that have been mentioned, after you realize the reasoning behind paying off as much as you can, you'll find that in the long run, you save a lot of money doing this.

Today's real estate market is a mess. That is why you need to clean up your personal situation as soon as possible. If you are currently paying skyrocketing mortgage rates, you may want to consider a mortgage refinance. Unaffordable payments may likely make your situation worse than it already is. You need to consider likely options that are specific to your needs. These include trying to lower your rate, getting cash out for home improvements, consolidating debt, or simply switching to a fixed rate on your mortgage.

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When interest rates are continually increasing, people with an adjustable rate mortgage are advised to switch over to a fixed rate refinance. This will ensure a regular, low-level, monthly payment instead of a figure that climbs steadily every time the bill arrives. You can also use the equity in your home to acquire cash for funding purposes. This includes refinancing the property to fund home improvements. If in debt, a common strategy is to consolidate. Refinancing your home is a way to do this.

Straight Up

Then of the course, there is the straight mortgage refinance. The mortgage refinance is perhaps the easiest and most practical way to prevent foreclosure on your property. With all the sub-prime lending market problems going on, thousands of people are searching for a solution to escalating mortgage payments.

Keep in mind that you should be working with someone who will formulate a solution to your particular circumstance. That is the benefit of working with a refinance specialist. His experience with mortgage refinance will eliminate the possibility of bad advice making the situation even worse. You are not bound to work with one, but like most things in life, professionals know a lot better. They can answer any questions that might come up.

Get Help Now

If you are considering a mortgage refinance, you probably need to get one immediately. Again, make sure to consult the professionals as they can help the process to go smoothly for you. Make sure that the professional is experienced. Someone who is not as knowledgeable may make the situation worse than you ever could.

If you can still hold off on the mortgage refinance, you may have the advantage of a potentially lower rate. You should get pre-qualified right away so you can lock down that low rate when it is offered to you. If the rates change and you are not pre-qualified, you will have greater difficulty in securing an optimal rate.

Rates are very volatile, so predicting their direction is a Sisyphean task. However, an experienced professional can show you the historical data and help you interpret it. This will help you consider all the options and make an informed decision. You can even opt for an adjustable rate if you feel that rates will decline. Refinancing professionals will be able to clarify all those scenarios for you. They will help you get pre-qualified and help you attain peace of mind when it comes to your mortgage refinance.

A no cost mortgage refinance has came into common use over the recent times owing to swelling property costs which proportionately means a growth in loan prices!

What is a No Cost Mortgage Refinance?

A no cost refinance is basically a remortgage where the consumer is looking for a fresh mortgage deal which includes no initial costs involved that many normal mortgages may have. These costs include but are not limited to assessment fees, escrow costs, lenders "trash fees" (meaning things for instance document preparing, admin fees, processing fees - fundamentally made-up fees that bump up the lenders' earnings), broker fees, title fees, etc.

This type of a no cost mortgage refinance appears good, nonetheless, the downside is that you'll be paying out a higher interest rate than you should be if you were looking for the best deal using a normal mortgage where you must pay points and settlement costs. This shouldn't put you off conditional upon your circumstances, because it could take you approximately 4-6 years to break even with the interest savings you'll make using a regular mortgage:

Who're No Cost Mortgage Refinances For?

While anybody may benefit from such remortgages, the two main different kinds of people or buyers who benefit are:

People who are not planning on keeping their house for more than around 5 more years - If you're planning on giving your property on within the near future to get a profit, then you will probably save by taking a no cost mortgage refinance! This is because of the fact that you have sold your property well before you start start seeing a saving using a regular mortgage.

The second type of buyers are people who don't quite hold the extra obtainable cash to pay for the first costs of a mortgage! These costs can often add a lot more money on top than the buyer bargained or organized for, therefore a no costs mortgage refinance is definitely the way to go in order to close the deal without having the funds for initial fee's! This sort of consumer can always remortgage in another 5 years anyhow before the mortgage begins to show bad value - which is a standard thing to do amongst house owners.

Would They Be Of Great Benefit?

As discussed above, a lot of the time this sort of refinancing is worth it because most property owners shall be remortgaging an average of every 5 years (subject to rates). However, if for any reason you wish to keep your mortgage for a lengthier time frame, then a no cost mortgage refinance results in being pretty bad value following around the 5 year mark.

It's definitely worth comparing and calculating the length of time it'll take you to break even and spending extra with each mortgages individual rates of interest. With this in mind, you are able to make the needed mortgage choice for your circumstance. The following is an example of 2 mortgages:

No Cost Mortgage Refinance

Mortgage: 300k

Interest: 6.25%

Initial Costs:

Monthly Payment: Approx 1,847

Standard Mortgage Refinance

Mortgage: 300k

Interest: 5.75%

Initial Costs: Approx 5.5-6k

Monthly Payment: 1,750 (saving 97 per month)

Approximate time required to break even if you went for the standard mortgage: roughly 5 years. Anything beyond this point makes the average mortgage less expensive than a no cost mortgage refinance. Anything shorter and the no cost mortgage wins.

More Interesting Facts about This Kind of Refinance

These types of no cost mortgages came into being at the start of the of the 1990's and were being frequently supplied then. They have recently been thought to be somewhat of a rarity and hard to get however, this really is untrue if you seek information it is possible to still find a good amount of lenders who offer a no cost refinance. They became popular as a result of inflated real estate prices which also pushed up the price and sum of loans.

A good practice with any mortgage and in particular the no cost mortgage refinance brokers, is to make certain you read every little bit of small print to ascertain that this is the correct mortgage for you and your situation. Loan companies have recently caught a bad reputation due mainly to bad lending practices from the sub-prime division of mortgage lending.

This makes buyers extremely cautious with lenders but that is a positive thing when looking for an investment as vital like a mortgage! As long as you are thorough in your research, you will be fine in the no cost mortgage refinance sector.

There are pros and cons to obtaining a conventional, VA or FHA mortgage loans. The guidelines for these home loans change on a regular basis, therefore it can be very difficult to keep up with all of the new revisions. There are certain things that will determine which type of loan will be best of you. Some of these include your credit score, income, loan to value of your house or how much money you have to put down if you are purchasing a home.

Conventional Mortgage Refinance
A conventional mortgage refinance used to be one of the most popular loans to obtain since you could split it up into an 80/20 and not have to pay mortgage insurance. Conventional appraisals are also not as strict on their guidelines as FHA. With the economy being very slow and people not having a lot of money to put down on their homes, conventional loans have started to slowly diminish over the years. Many lenders have also tightened up their guidelines for credit scores which has stopped many people from being able to obtain a conventional mortgage. If somebody cannot put down 20 percent on a home, the monthly mortgage insurance on a conventional loan is very high. The monthly insurance premium can range from 1 percent to 2.5 percent of the monthly payment. This huge cost can really impact whether somebody can qualify for the loan based on their debt to income ratio. People that are able to put down 20 percent on a home or mortgage refinance and have at least 20 percent in equity, a conventional loan is their best option to chose from. Some lenders offer a 40 year term on these or an interest only option which allows for the homeowner to better afford their monthly mortgage payment.

FHA Mortgage Refinance
FHA mortgage refinance started to become very popular in the 1990's. The real estate market started to take a huge turn and the prices of homes started to sky rocket. Many people were then unable to afford a home and needed mortgage refinance where they did not have to make a large down payment. FHA loans are also great for a young person who is just starting out and does not have a lot of money saved to put down on a home or if they want to receive a gift from somebody as part of their down payment. A person purchasing a home with an FHA loan can also have the seller pay up to 6% of their closing costs. This can save the home buyer thousands of money or help them to qualify if they don't have the money for the closing costs. The down payment on an FHA loan is 3.5 percent and the up front mortgage insurance premium is 1.75 percent. The monthly mortgage insurance cost is.55 percent. An FHA loan is still a great option for a first time homebuyer and the guidelines on credit are not as strict as a conventional loan. The majority of lenders now are requiring at least a 620 or higher credit score to qualify. FHA also offers a program called an FHA streamline, where a homeowner can refinance their mortgage into a lower interest rate without paying the high cost of a regular refinance. Most lenders also don't require another appraisal to be done on the property when a homeowner does an FHA streamline. The homeowner must have at least 12 months of on time mortgage payments to qualify for this type of refinance.

VA Mortgage Refinance
A VA mortgage is a great way for a Veteran to obtain a home loan without much out of pocket expense. A person obtaining a VA loan does have to have excellent credit, but many lenders are requiring at least a 600 credit score. There is no monthly mortgage insurance premium on a VA loan, which really saves the homeowner a lot of money on their home loan payment. The VA does require a funding fee be paid on the loan at settlement. For a purchase this funding fee is 3 percent and for a refinance the funding fee is 1.5 percent. The Veteran is exempt for these funding fees if they are considered disabled by the VA. The funding fee can be rolled into the loan unlike an FHA loan. That saves the Veteran up front money if they don't have it saved to put down on the home. The seller of the home can also pay this funding fee for the Veteran if they chose to.

If you want to make the most of your personal or investment real estate, you should consider a negative amortization loan. Mortgage amortization is basically mortgage balance reduction. Consequently, when a mortgage has negative amortization, the loan balance not only is not reduced, it actually grows. So, why should you consider this? Simple. It is a great way to invest money from real estate someplace else.

This is a very aggressive and fairly unknown approach to real estate investment. In fact, it is a method of investing that does not have to involve real estate, in usual way we consider real estate investing. In other words, a negative amortization loan can give you money to invest in areas other than real estate, and this is how many people use this type of loan.

Let's assume your mortgage has a conventional loan that calls for a monthly payment of $800. If you refinance to a negative amortization loan, your payment may go down to $400 or less, leaving you $400 or more each month to invest. Now, keep in mind, your mortgage balance is actually increasing with this loan, because you are not paying the required interest, and it is being added to your principal balance.

However, imagine having an extra $5,000 to $6,000 each year to put into a high-yield stock or mutual fund. After five to ten years, this could turn into a very lucrative strategy.

Remember, it is important to consult with a financial advisor, before attempting this loan and this strategy. You might also consult with the wealth-building system, Winning the Mortgage Game.

As the nation's real estate market continues to grow and new technology gains more ground, many widely accepted beliefs that were true just a few years ago may not be true today. Before you go after a home mortgage or home loan or any real estate financing, if you have a lot of bad credit because of consumer debt such as credit card or personal loans, try to eliminate or reduce this debt as soon as possible because it'll affect your ability to qualify for a home mortgage and the estimated monthly payment.

Some tips to know: whether you're financing or refinancing. most people move or refinance within a seven year period. And loan programs for down payments of 20% or less require you to purchase Private Mortgage Insurance (PMI).

If you're going to buy a second home or second property, you'll need to identify the source or sources of your down payment, since you won't be selling your current house and using the proceeds, and you'll need to expect a larger monthly payment for housing and other related expenses too.

If you have a problem getting a home mortgage and the seller still owes money on the home you can check with your lender and see if you can get a wraparound mortgage. Although it's not legal in all states, it will allow you to pay the monthly payment on the existing mortgage and an additional payment to pay the difference; make sure that a wraparound mortgage will not trigger a due-on-sale clause ask the lender in advance.

Many people are not aware that they may be able to customize the length of their loans. Ask the mortgage broker or lender you're working with. Although lenders usually advertise 15-year loans and 30-year fixed rate mortgages, applicants can ask for 20 years, 25 years or any other number of years that would work better. This may allow borrowers to build up their equity faster and keep their monthly payments in a range they can afford. Some lenders may impose strict limits on how much of the down payment can come from borrowing from other sources.

Some of the advantages of adjustable rate mortgages that are touted include: lower costs - because they are usually priced lower than fixed-rate mortgages so you can increase your buying power and lower your initial monthly payments then if the interest rates go down, you'll have lower payments. However in all the years I was in the real estate business I never advised anyone to get this type of loan. With the changing market trends one can find themselves in a heap of trouble just like that. This would be a last resort loan and one would have to be sure they were not going to be unemployed in the next few years.

If you're working with a local builder within a sub-division or housing development and you're just making carpeting, lighting and appliance selections for a brand new home, you'll likely be able to get a standard mortgage loan. But if you're planning to hire the contractors, electricians, plumbers, and painters, you'll probably need a construction loan, which provides the funds to pay the subcontractors as the work goes along.

You will want to work with your mortgage broker or lender closely to develop an individual home loan or home mortgage program based on your credit worthiness. If you have or think you have a less-than-perfect or 'bad credit' credit report don't worry too much about it. When financing real estate it's important to know that a low FICO credit score doesn't mean you won't qualify for a home loan or home mortgage. There is much ado about the FICO score these days but there are many instances in which it isn't going to interfere with getting a home loan or mortgage. If you do borrow money for a down payment it must be disclosed to the lender or if any of the money for your down payment was a gift, be ready to provide proof of it.

The 20-year fixed-rate mortgages allow you to make a consistent higher monthly payment throughout all of the 20 years you have the mortgage; the shorter term means you pay the loan off quicker and therefore pay less interest and importantly, build equity faster than you would with a 30 year loan. You'll also need to take into consideration what the closing costs will be. Ask about the escrow account for taxes and insurance.

Make sure to ask other homeowners how they're doing and what real estate financing and home mortgage or loan pitfalls to avoid. And whatever you do don't get yourself into a situation where you are unable to make the mortgage payments; make sure to think far ahead. Try not to get too overwhelmed with all the different home loan and mortgage choices available.

Make a list of questions and get the answers from any real estate agents, real estate brokers, mortgage lenders and any other real estate professionals you know or meet. Ask them about real estate financing, home mortgages, home loans, refinancing and current mortgage rates. Go online and get home mortgage quotes. Online quotes can often be cheaper because of the elimination of middlemen for example. And compare the quotes with other quotes you get locally to find the best rates for you.

Mortgage brokers are agents who seek out the best possible deal for you in terms of a mortgage. Mortgage brokers who are good at what they do should be able to assess your specific mortgage needs and have a large number of potential lenders at their fingertips. They should also be able to find you a good deal by inquiring with the potential lenders who are the best fit for you. Finding a good mortgage broker can be tricky.

Where to find mortgage brokers

First, you should talk with people you know who have used mortgage brokers in the past. Find out what their experiences have been with these brokers. Ask your friends whether these mortgage brokers truly found them the best possible deals and whether they would use that broker again. Some people are proud that they went through a broker but then later are upset about the deal they were found through that broker. One common thing in the mortgage broker community is for brokers to establish kickbacks or close relationships with specific brokers and therefore aren't necessarily working with the best interest of you, the client, in mind.

Mortgage brokers can also be found by talking with title agencies and finding out which brokers they might recommend. You can also of course go through the phone book to find mortgage brokers. You should make a list of several brokers that you'll contact before deciding whether to go with a particular broker. You'll want to interview a number of brokers and get a good feel for whether those brokers are truly on your side.

Shopping for your mortgage broker

When you have a list of several mortgage brokers, you want to take the time to do at least a phone interview with these brokers. Call them and ask them some specific questions to help you determine whether you will want to use them as your broker. Ask them how long they've been in business, whether they think they can help you, what kinds of deals they have been able to get those with your type of situation, what their fees are and when those fees are due. Good mortgage brokers will only expect you to pay at the completion of their jobs or at the closing of the home.

How to check out your mortgage broker

When you think you've found one or two brokers that you want to decide against, do some research on these brokers. Ask these brokers for some references and call those people. Ask those references whether they truly think the broker got them the best possible deal. Many people who use brokers discover later that they probably could have gotten a better deal on their mortgage if they had shopped around for the mortgage themselves. Make sure your broker is licensed to do business. Find out which lenders your broker typically uses and find out what deals those lenders are known to give to people in your specific financial situation.

One of the most common challenges for new—and sometimes even for experienced—real estate investors is getting deals funded. When you’ve got a great deal and you’re having trouble finding the money you need to close it, you may be tempted to take a loan with terms and conditions that will work against you. There may be times when this is an acceptable strategy—and times when you should walk away from the loan, even if it means walking away from the deal.

When you see one or more of the following red flags, think carefully and explore all your options before you accept the loan.

Higher than normal fees. There are fees and costs associated with originating loans that are an acceptable part of the borrowing process. Watch for fees that are excessive or hidden. Do the arithmetic yourself to be sure everything adds up correctly.

Higher than normal interest rate. If you have less-than-perfect credit, you can expect to pay a slightly higher rate than someone with a top-notch credit rating—but it shouldn’t be exorbitant. Know what the going rates are; if the lender is asking for more than six percent above prime for a first mortgage loan, look elsewhere.

Prepayment penalties. Don’t put yourself in a position of losing a substantial amount of your profit through prepayment penalties if you want to refinance in a year or two or if you sell the property.

Extra services you don’t want or need. Some lenders will bundle things like life or disability insurance into your loan. Not only is this the most expensive way to get such coverage, if you don’t want or need it, you shouldn’t be forced to buy it.

The contract includes a binding mandatory arbitration clause. This means that you give up your rights to sue for any reason and instead agree to binding arbitration—which means you could lose your right to due process if a dispute arises.

Upfront fees. If the lender wants any money upfront, especially before you’ve been approved for the loan, be very cautious. Legitimate lenders make money by making loans—not by soliciting applications and collecting upfront fees.

Anything you don’t understand. Mortgage loans can be complicated, especially if you’re considering products such as an adjustable rate or interest-only loan, or one that might result in negative amortization. Be sure you’re clear on all the terms and that you know what the payment will be, how often it might change, how high it can possibly go, and what will happen if your payments are capped but the interest rate is not.

There may be times when it’s worth less-than-desirable loan terms to get your deal done. For example, you may be willing to pay a higher interest rate because you know the property will generate enough cash flow to cover the debt service. The key is to understand the terms of the loan along with the advantages and disadvantages, and make a decision that will allow you to build wealth and achieve financial success.

A few years ago, the real estate bubble had not yet emerged. Instead, there was a more flat, tempered housing market where home values were not rising at the pace experienced after the boom and subsequent bubble. That was then.

This is now.

Unlike the trend home buyers and sellers observed associated with an economy propped up by quickly increasing home equity values, the opposite is now the case. In fact, some might argue that the downhill ride back to more stable home values has been, and will continue to be, a steeper more painful slope than the angle at which the economy first rose. According to an article written by Michael Carliner at Bloomberg.com, homeowners might end up having homes underwater for a number of years:

"Rebounds in housing have typically been driven by declines in mortgage rates. Not this time. Rates on a 30-year mortgage have dropped to about 4.5 percent - the lowest since the early 1950s - with little effect. Tax credits and other programs to encourage buyers have provided only a modest, temporary boost."

It's difficult to determine the bottom of this particular downward housing economy, but it's safe to say that sellers with homes for sale might benefit by sitting through the continuing drop. While speculative property investors may not enjoy this option, primary residence homes can take advantage of an eventual pricing rebound once the economic bottom is finally reached. And while you're waiting, there has simply been no better time than now to take advantage of the lowest prime lending rates ever. Here's a breakdown of the latest loan rates indicated by the Mortgage Bankers Association as mentioned at MarketWatch:

"The refinance share of mortgage activity increased to 81.4% of total applications from 78.1% the previous week," the group said, which is the highest refinance share observed since January 2009.

The group also said that the average contract interest rate for 30-year fixed-rate mortgages increased to 4.60% from 4.57%, with points increasing to 0.92 from 0.89 for 80 percent loan-to-value ratio loans. The effective rate also increased from last week."

Apparently, it also appears that the MBA (Mortgage Bankers Association) is appreciative of the U.S. Senate's efforts to stabilize FHA multifamily and single family loans. However, the core overlying challenge facing the overall economy is that it is 1) artificially propped up by real estate prices; and 2) struggling to offset the naturally declining real market values with bonified, long-term service sector and manufacturing jobs.

Now that we're facing a very possible, very real double-dip recession, homes for sale will do nothing but make the downhill ride much, much faster. Imagine a bicycle without brakes.

If you want to make money investing in real estate, you have to begin with a plan. Here are some ways to get started investing in real estate. Choose a plan that works for you.

If you don't currently own your own home, that's the best place to start. Many people never buy a home because they think they have to have perfect credit or a lot of money down. Talk to a mortgage loan officer. You may be surprised that you can buy a home with little money down.

Homeowners Are Real Estate Investors

Any home owner in reality becomes a real estate investor. Whether home owners want to stay in their home for life or just a few years, their home should make them money. Many families only own one home at a time, but they keep moving up. Some of these families have made money from their homes by taking out the equity to pay bills. Other families bought more expensive homes, which went up in value more than the first home. For instance, a family bought a home for $105,000, sold the home for $230,000 and then bought a home for $300,000. The more expensive home went up in value the next year more than the first home. You can build your real estate wealth just by owning one home.

However, if you split your mortgage payments with other people, you don't have to pay for all this equity on your own. Your tenants will help you make the payments and over time can actually buy the property for you!

How to Begin Real Estate Investing

Many investors start with a home to live in and then save money for a down payment for their first investment property. Here are some ways to skip the savings years, which most people never accomplish:

1. Refinance. If your home has gone up in value, refinance your home and use the equity for a down payment on an investment house. You must have sufficient monthly income to pay any negative between the rental income and the new mortgage payment. Some home owners have been able to purchase more than one investment house from one refinance transaction.

2. Move. Another way beginning real estate investors get their first investment is to buy a new home and rent out their first home. If you have great credit, you don't need to put a down payment into a new home to live in.

3. Sell and Move. You can sell your home and buy two houses. Use your equity to put more down on the investment house than your personal home.

4. Buy a vacation or second home. Our cabin tripled in value in three years. We refinanced the cabin to buy more houses and also kept funds to pay for the mortgage, twice. The cabin pays us to enjoy it!

You can make money investing in real estate. Make a plan of action and get started real estate investing.

Copyright © Jeanette J. Fisher

Berkeley, California, is located in Alameda County, 11
miles NE of San Francisco, California.

Berkeley is a vibrant, intellectually-energetic city
with a population of 102,743. At its center is the
world-renowned University of California at Berkeley,
home to current and would-be Nobel prize winners,
several cultural and art museums, performing arts, and
the Golden Bears football team. Home to 'California
Cuisine' - a neoclassical style of cooking that
incorporates fresh, seasonal ingredients--a term
invented at Chez Panisse, the legendary restaurant in
North Berkeley founded by famed chef Alice Waters.

Berkeley Homes

Homes in Berkeley reflect the eclectic and diverse
style of its residents, from popular Arts and Crafts
era bungalows nestled in the Berkeley Hills to newly
restored Victorians that surround the university and
downtown areas. Designer of the Hearst Castle in San
Simeon and California's first female architect Julia
Morgan firmly set her roots here, and you can still
see her historic buildings--designated as
landmarks--throughout Berkeley, including the Berkeley
City Club and the Julia Morgan Theatre--a small arts
production company.

Berkeley properties pool is 44,955 residential
properties which include newly built properties. The
median age of real estate in Berkeley is 1941, with an
average Household size of 2.84 people. 8% are one
bedroom homes, 31% are 2 bedroom homes, 36% are 3
bedroom homes, 18% are 4 bedroom homes, and 7% are 5+
bedroom homes.

Berkeley Mortgage Statistics

Homes With No Mortgage - 29%

Homes With Mortgage - 71%

First Mortgage Only - 54%

First & Second Mortgage or HELOC - 18%

Berkeley Area Real Estate Tax

Berkeley Real estate Tax: Median Real Estate Taxes
(2000) were $3,004 comparing to 1999 Median Family
income $ 70,434. Compare to USA median yearly Real
Estate Tax $1,300 and USA median Family Income $42,000
(1999).

Berkeley School District: Berkeley has a wide range of
private and public schools that boast one of the
nation's highest test scores and attrition rates.
Among them is the unique Ecole Bilingue which
specializes in a French immersion program for children
up to age 14. Children make up 14.1% of Berkeley's
population and a dizzying number of cultural and
extra-curricular programs are available to them
year-round. Berkeley has 14,513 of under 18 years old
residents, or 0.27 kids per one worker, or 0.32 kids
per one household.

Berkeley Real Estate & Berkeley Homeownership

There are 17082.9 or 38% one person households,
15284.7 or 34% two person households, and 6293.7 or
14% three person households in Berkeley, California.
Median residents age is 32.5, Senior citizens (65+)
make up 10,484 or 10.2%% of Berkeley population.

Large employees abound in Berkeley, including the
University of California, the Bayer Corporation, and
the Power Bar company to name a few. There are 54,674
workers (over 16 years of age) in Berkeley. Of these,
52.83% drive to work. Approximately 18.58% of workers
in Berkeley take public transportation. An estimated
14.9% walk to work, taking advantage of beautiful and
much-needed civic improvements such as the new
pedestrian bridge that links the Berkeley Marina and
the shoreline to the city. Berkeley--with its proximity
to San Francisco--and a year-round temperate climate
makes it a popular place in which to live, work, and
thrive.

Median Berkeley homeowner's housing expenses are 20.8%

Crime in Berkeley (2003), crimes per 10,000 residents
per year

Violent Crimes - 90.13

Robberies - 39.13

Aggravated Assaults - 48.86

Property Crimes - 846.29

Burglaries - 121.18

Larceny-Thefts - 605.1

Motor Vehicle Thefts - 120.01

Invest in Berkeley Properties

When making a decision about buying real estate in
Berkeley California area, you should consider the
city's vast ethnic diversity. These statistics
indicate a high level of multiculturalism and
tolerance. Events that celebrate the city's many
different ethnic communities include the now
institutional"How Berkeley Can You Be" and an annual
Native American Pow Wow.

Near Medium City -
Near Large City - San Francisco,
California

Berkeley Zip Codes - 94702, 94703, 94704,
94705, 94706, 94707, 94708, 94709, 94710

Berkeley Area Codes - 510

White population - 59.17%

African-American population - 13.63%

Asian - 16.39%

American Indian & Alaskan - {-}%

Hispanic (of any race) - 9.73%

Median Family Income (1999) - $ 70,434%

Population Below Poverty Level - 18.97%

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.

The All-Money-Down Technique

So how does the all-money-down technique work by purchasing a home with cash? First of all, let me repeat that I really didn't have any cash, but I had a significant amount of equity from Terry's home and several homes that I owned put together to give me a substantial cash down payment. Banks and mortgage companies alike will accept money from a home-equity line of credit as cash to purchase a home. At least they did in 1997 under the financial guidelines of the day. What you must remember about mortgages and lending is that the guidelines change constantly, so this technique I used in 1997 may or may not be able to be used in the future. Whether it is or isn't able to be used again doesn't really matter to me as I believe that there will always be a way to buy real estate with limited money down sooner or later. There will always be a technique to acquire real estate but exactly how that will be done in the future I'm not completely sure.

I began purchasing homes in the Mayfair section of Philadelphia with the prices in the $30,000 to $40,000 per home price range. I would purchase a home with three bedrooms and one bathroom on the second floor with a kitchen, dining room, and living room on the first floor and a basement. What we call a row home in Philadelphia would consist of a porch out front and a backyard the width of the home. Most row homes in Philadelphia are less than twenty-two feet wide. For those of you who are not from Philadelphia and can't picture what a Philadelphia row home looks like, I suggest you watch the movie Rocky. Twenty-two homes on each side of every block will really test your ability to be a neighbor. Things that will usually cause an argument with your Philadelphia neighbors often stem from parking, noise your children make, where you leave your trash cans, parties, and the appearance of your home.

In 1998 my girlfriend and I moved in together and to the suburbs of Philadelphia called Warminster. After living on a street in Tacony, much like Rocky did, I really looked forward to having space between my home and my next-door neighbor. I told Terry not to even think about talking with the people who lived next door to us. I told her if one of them comes over with a fruitcake I am going to take it and punt it like a football right into their backyard. I believe I was suffering from Philadelphia row home syndrome. My new neighbors in Warminster turned out to be wonderful people, but it took me eighteen months before I was willing to learn that.

So you just bought your row home for $35,000 in Mayfair, and after $2000 in closing costs and $5000 in repair costs, you find yourself a good tenant who wants to rent the home. After renting the home with a positive cash flow of $200 a month, you now have an outstanding debt of $42,000 on your home equity line of credit that will have to be paid off. When purchasing the home, I did not get a mortgage as I just purchased a home for cash as it is said in the business. All monies I spent on this house were spent from the home-equity line of credit.

The move now is to pay off your home-equity line of credit so you can go do it again. We now go to a bank with your fixed-up property and tell the mortgage department that you want to do a cash-out refinancing of your real estate investment. It helps to explain that the neighborhood you purchase your property in should have a wider range of pricing as the neighborhood of Mayfair did in the mid-90s. The pricing of homes in Mayfair is quite unusual as you would see a $3000 difference in home values from one block to the next. This was important when doing a cash-out refinancing because it's pretty easy for the bank to see that I just bought my property for $35,000 regardless of the fact that I did many repairs. I could justify the fact that I've spent more money on my home to fix it up, and by putting a tenant in, it was now a profitable piece of real estate from an investment standpoint.

If I was lucky like I was many times over doing this system of purchasing homes in Mayfair and the appraiser would use homes a block or two away and come back with an appraisal of $45,000. Back then there were programs allowing an investor to purchase a home for 10 percent down or left in as equity doing a 90 percent cash out refinance giving me back roughly $40,500. Utilizing this technique allowed me to get back most of the money I put down on the property. I basically paid just $1,500 down for this new home. Why did the mortgage companies and the appraisers keep giving me the numbers I wanted? I assume because they wanted the business. I would only tell the bank I need this to come in at $45,000 or I am just keeping it financed as is. They always seemed to give me what I wanted within reason.

This whole process took three to four months during which time I may have saved a few thousand dollars. Between the money I saved from my job and my investments and cash out refinancing, I had replenished most or all of my funds from my home-equity line of credit that was now almost back to zero to begin the process again. And that is exactly what I intended to do. I used this system to purchase four to six homes a year utilizing the same money to purchase home after home after home over and over again. In reality, the technique is a no-money down or little money down technique. At the time maybe I had $60,000 in available funds to use to buy homes off of my HELOC, so I would buy a home and then replenish the money. It was a terrific technique that was legal, and I could see my dream of being a real estate investor full-time coming to an eventual reality even though I wasn't there yet.

During the years from 1995 to 2002, the real estate market in Philadelphia made gradual increases of maybe 6 percent as each year went on. I began to track my net worth that was 100 percent equity, meaning I had no other forms of investments to look at when calculating my net worth. Generally speaking, the first five years of my real estate career did not go well because of the bad decisions I made purchasing buildings and the decline in the market. Furthermore, my lack of knowledge and experience in repairs made it a rough. The second five years of my real estate career that I just finished explaining didn't make much money either. I supported myself primarily through my career as a salesman, but I could definitely see the writing on the wall that down the road real estate was going to be my full-time gig.

Realty Professionals of America

I own an office building that has a real estate company as a tenant called Realty Professionals of America. The company has a terrific plan where a new agent receives 75 percent of the commission and the broker gets only 25 percent. If you don't know it, this is a pretty good deal, especially for a new real estate agent. The company also offers a 5 percent sponsorship fee to the agent who sponsors them on every deal they do. If you bring an individual who is a realtor in to the company that you have sponsored, the broker will pay you a 5 percent sponsorship out of the broker's end so that the new realtor you sponsored can still earn 75 percent commissions. In addition to the above, Realty Professionals of America offers to increase the realtor's commission by 5 percent after achieving cumulative commission benchmarks, up to a maximum of 90 percent. Once a commission benchmark is reached, an agent's commission rate is only decreased if commissions in the following year do not reach a lower baseline amount. I currently keep 85 percent of all my deals' commissions; plus I receive sponsorship checks of 5 percent from the commissions that the agents I sponsored earn. If you'd like to learn more about being sponsored into Realty Professionals of America's wonderful plan, please call me directly at 267-988-2000.

Getting My Real Estate License

One of the things that I did in the summer of 2005 after leaving my full-time job was to make plans to get my real estate license. Getting my real estate license was something I always wanted to do but never seemed to have the time to do it. I'm sure you've heard that excuse a thousand times. People always say that they're going to do something soon as they find the time to do it, but they never seem to find the time, do they? I try not to let myself make excuses for anything. So I've made up my mind before I ever left my full-time job that one of the first things I would do was to get my real estate license. I enrolled in a school called the American Real Estate Institute for a two-week full-time program to obtain my license to sell real estate in the state of Pennsylvania. Two terrific guys with a world of experience taught the class, and I enjoyed the time I spent there. Immediately after completing the course at the American Real Estate Institute, I booked the next available day offered by the state to take the state exam. My teachers' advice to take the exam immediately after the class turned out to be an excellent suggestion. I passed the exam with flying colors and have used my license many times since to buy real estate and reduce the expenses. If you are going to be a full-time real estate investor or a commercial real estate investor, then you almost have to get a license. While I know a few people who don't believe this, I'm convinced it's the only way.

I worked on one deal at $3 million where the commission to the buyer's real estate agent was $75,000. By the time my broker took a share, I walked with $63,000 commission on that deal alone. With the average cost per year of being a realtor running about $1200 per year, this one deal alone would've paid for my real estate license for fifty-three years. Not to mention all the other fringe benefits like having access to the multiple listing service offered too many realtors in this country. While there are other ways to get access to the multiple listing services or another program similar to it, a real estate license is a great way to go.

Some of the negatives I hear over and over again about having your real estate license is the fact that you have to disclose that you are realtor when buying a home if you're representing yourself. Maybe I'm missing something, but I don't see this as a negative at all. If you're skilled in the art of negotiation, it's just another hurdle that you have to deal with. I suppose you could end up in a lawsuit where a court of law could assume because you are realtor you should know all these things. I don't spend my life worrying about the million ways I can be sued any more than I worry about getting hit by a car every time I cross the street.

There is a lot to learn about when it comes to the topic of equity loan mortgages, and to be exact you should realize the benefits that you could possibly gain from refinancing your home. In particular since over the past few years the mortgage rates have hit all time lows, by refinancing your home you are able to get hold of the opportunity to benefit from this.

Equity loan mortgages are fundamentally second loans that are used to pay off your mortgage so that you can gain from lower interest rates. By taking out an equity loan mortgage, a homeowner is able to lower their existing monthly mortgage payments, and it is also a enormous way for a home owner to combine their debt and therefore they can save a great deal of money in the long term.

There are different reasons a homeowner would consider about a refinance home equity loan and depending on the worth of the property and the amount of equity offered, it could be a good financial move. If circumstances are right that consent to the owner to refinance their home at a lower interest rate, they could end up saving thousands of dollars in interest charges over the life of the loan.

Let's take for instance, if a person owes $100,000 on their home and it is esteemed to $200,000 they have $100,000 in equity. Nearly all lenders will limit a refinance home equity loan to 80 percent of the home's equity, significance this person may be qualified for an $80,000 refinance home equity loan. They could utilize this money for improvements to enhance the home's value or as a down payment on a second home, education funds or to take an extended vacation to an exotic location.

A lot of people make use of the equity in the home for foremost purchases that may add nothing to the value of their property, or lower their accountability to the original lender. In some case, they are going to end up with two mortgage payments due each and every month. With enough income to cover both payments, there usually are no problems. Conversely, if anything happens that diminishes the available income, there are now two possibilities for a foreclosure.

Lists Of Refinance Home Equity Companies

If you are looking to refinance your mortgage and want to make out which companies are existing to help you do so, then you should know that there are quite a few. There are some in particular which are especially notable, of which will be discussed in more detail here.

The Countrywide Financial

When it comes to refinance home equity companies, this is certainly one of the very best. The Countrywide Financial is a diversified financial services company that is focused on real estate finance and related matters, and their task is to help individuals and families to realize the dream of home ownership.

They are an incredible refinance home equity company, and should definitely be one of your top choices. They have been known as one of the best performing financial services companies in the past quarter century, are recognized as being the #1 lender in America to minorities, and as well #1 lender in general.

The Quicken Loans

This is one greater refinance home equity company, one that has been in the business for a number of decades now and which is known as being one of the largest loan lenders worldwide. They have over 5,000 talented and experienced home loan experts that are equipped and willing to help you at all times.

They also are well thought-out as being the preferred mortgage lender for several of America's top-rated companies; these include AT&T, Google, Compuware, and EDS. They close loans in all of the 50 states, they are capable to process your loan in as little as 15 days, and they offer more than 150 different loan programs, which makes it easier for you to choose the right fit for your needs.

You can submit an application right online with this refinance home equity company, and you will get answers back on average within 24 hours. They always have a qualified and knowledgeable customer sales staff available to respond to any questions that you may have.

The Fannie Mae

This is however another great option that you have when it comes to refinance home equity companies. They are a shareholder-owned company with an open mission, one that has a goal, which is to develop affordable housing and help consumers with their financial issues.

There are many additional options that you have here as well, and whichever you are more concerned in, you just want to make sure that you take your time and actually check the history of the company out as well as the services that they offer, so that you can make the most intelligent decision in terms of which company to go with.

It probably takes weeks or even months to select your dream home.

Choosing a lender will take much less time, but should be handled carefully as well. There is a difference between mortgage brokers and lending companies: A mortgage broker interacts between the consumer and a lender & may offer services for different lenders. A mortgage lender is a financial company that provides a loan directly to you. A broker many times charges an upfront fee for services provided. Therefore always ask about the fee structure!

If you are buying a home or refinancing, keep following tips in mind when you shop for a mortgage lender:

- Try to learn about the different types of mortgages out there, such as a 30 year or a 15 year fixed rate, adjustable rate mortgage (ARM), balloon, etc. So when you discuss options with the mortgage lender, you will be more likely to pick the best deal!

- Get quotes from several lending institutions or mortgage brokers before choosing one. Get referrals from your friends, family members, realtor who have recently bought (new) homes. Besides that you might want to check the Yellow Pages, newspapers or web search engines.

- Ask for an itemization of closing charges from each mortgage lender before submitting an application form. Inquire about costs on one mortgage lender's list that are not on others (this may prevent undisclosed costs from surprising you at settlement).

- Choose a mortgage lender who is willing to answer all your questions. Expect the lender to ask questions. Your replies can give important signals about the best mortgage program to suggest.

- Be aware of predatory lending practices like steering customers towards higher interest rates, charging unnecessary fees or adding points without reducing the interest rate of the loan. If you think that you are a target, ask an official at a non-profit agency or legal-aid organization to have a look at the proposed mortgage offer free of charge!

LendAdvisors.com - Blog that helps you with Real Estate, Mortgages & Refinance.

The Key to Real Estate is finding motivated sellers. We I look for Real Estate, I look for DON'T WANTER CONDITIONS. These are conditions that create motivated sellers...

D - Divorce

O - Obsolescence of property - needs major fix up

N - Negative cash flow

T - Transfer from job

W - Wrong management approach

A - Arrears in payments

N - Negative location

T - Taxes

E - Estate situations (death)

R - Retirement

C - Competition with neighboring properties

O - Out-of-area owners

N - Neurotic fears

D - Debts

I - Ignorance of investment principals and market conditions

T - Time constraints

I - Investment capital - needs capital for another investment

O - Ornery partner(s)

N - Need for status symbols

S - Sickness

These are the majority of the reasons for motivation and your goal is to find properties with sellers in these unfortunate situations. You now become a problem solver as you attempt to solve these personal problems. Keeping in mind you are trying to offer a solution that will require little to no money down.

There are several nothing down solutions. Here are 50 of them.

Technique No. I The Ultimate Paper Out

Technique No. 2 The Blanket Mortgage

Technique No. 3 Life Insurance Policy

Technique No. 4 Contract or Wrap-Around Mortgage

Technique No. 5 Raise the Price, Lower the Terms

Technique No. 6 The Balloon Down Payment

Technique No. 7 High Monthly Down Payments

Technique No. 8 Defer the Down Payment with No Mortgage Payment

Technique No. 9 The Buyer

Technique No. 10 Supply the Seller What He Needs

Technique No. 11 Assume Seller's Obligations

Technique No. 12 Using Talents, Not Money

Technique No. 13 Borrow Against Life Insurance Policy

Technique No. 14 Anything Goes

Technique No. 15 Creation of Paper

Technique No. 16 The Two-Way Exchange

Technique No. 17 The Three-Way Exchange

Technique No. 18 Lemonading

Technique No. 19 Borrowing the Realtor's Commission

Technique No. 20 Rents

Technique No. 21 Deposits

Technique No. 22 Splitting Off Furniture and Other Items

Technique No. 23 Splitting Off Part of the real estate property

Technique No. 24 Small Amounts of Money From Different Banks

Technique No. 25 Cash-By-Mail Companies

Technique No. 26 Credit Cards

Technique No. 27 Home Improvement Loans

Technique No. 28 Home Equity Loans

Technique No. 29 Refinance Boat, Car, Stereo, or Other Personal real estate property

Technique No. 30 VA Loans

Technique No. 31 FHA Loans

Technique No. 32 The Second Mortgage Crank

Technique No. 33 Variation of the Crank: Seller Refinance

Technique No. 34 Buy Low, Refinance High

Technique No. 35 Use Discounts from Holders of Real Estate Mortgages

Technique No. 36 Moving the Real Estate Mortgage

Technique No. 37 Creative Refinance of Underlying Mortgage

Technique No. 38 Pulling Cash Out of Buildings You Own But Don't Want To Sell

Technique No. 39 Making A Partner of the Holder of an Underlying Mortgage

Technique No. 40 Selling of Second Trust Notes

Technique No. 41 Borrow Partner's Financial Statement

Technique No. 42 Borrow Partner's Money for Down Payment

Technique No. 43 Borrow Partners Money for down Payment Until Your Money Comes

Technique No. 44 Your Cash Flow/My Equity Or Some Combination

Technique No. 45 You Put Up the Cash; I Put Up the Time and Expertise

Technique No. 46 The Rolling Option

Technique No. 47 Equity for Options

Technique No. 48 Sale Option Back

Technique No. 49 The Earnest Money Option

Technique No. 50 Lease With An Option To Purchase

You can visit my website to learn more in depth how each of these techniques work.

Real Estate, What is the first thing that comes in to your mind? Basing on the current economic predicament we are in, the first few words would be Mortgage, Debt, Homes, Refinance, and Investment. These would best describe the sentiments people have nowadays due to the heavy encumbrance of the recession. Here is a thought, why don't we all be optimistic and look at it on a different perspective? After all optimism definitely goes a long way which enables us to let our imagination run wild and be creative regardless of the negative stigma.

Before we delve deeper on key aspects that are of interest, let me give you a brief overview about me. Real estate business has been a lifeline for me and my family ever since, it's in the blood if I may say so myself. I have been around construction, home improvement business, mortgage assessment for most of my life. Being 54 has never been so gratifying and rewarding, all thanks to my Real Estate roots. I can attribute my Real Estate success mostly due to my mom and step-dad being contractors and developers, while I was growing up I was immersed in the industry in one way or another. My keen interest construction enabled me to build several log homes in Montana, Monterey and Salinas, CA. I was also able to build numerous homes in Texas; all in all I had the pleasure to live in nine states following construction, home refurbishing and real estate booms.

So where has my quest taken me as of this time? I am currently residing in Northern CA, although recently hit with a huge downturn in the real estate market and, giving credence to the global recession that has everyone slumped and penny pinching for quite sometime now. Do I still build? It's been a while, but my passion and enthusiasm for construction and real estate is undeterred. Is there still a market for real estate? You bet! Let me tell you about my latest business venture, buying bank owned homes....

FORECLOSURE: Defined as the removal of right to redeem mortgage, a legal process by which a mortgagees' right to redeem a mortgage is taken away, usually because of failing to make payments.

It might seem pretty dry but let me put it this way... Take for example someone finds an exquisite home for sale. Then they would assess their personal finance on whether it would be an excellent investment. They could either take a home equity loan through various loan modifications; then process the transaction with one of the creative types of financing. Then due to some unmitigated circumstances something changes. It could either be an economic recession, interest rates, a job or an illness. The payments would unfortunately be stopped and now the home owner would be in a rut and left upside down in the loan. This simply means that the loan is more than what the house is worth. What can they do? They can't sell it and they can't afford the payment. And guess what? Life happens. FORECLOSURE!!!

You have lost the right to your Mortgage and your Home! Your credit is shot, quite possibly for the next 10 years. This is foreclosure. This is officially a bank owned home. This is the cold downside of life.

You can either whine for a while or get your act together. If you are that steadfast you can take it like a real man should and walk it off. Nah I'm just kidding, then again... But seriously there's no need for a breakdown into depression. This is not a total failure, you can always start up again, although it is easier said than done but always keep in mind beneath every cloud is always a silver lining. Just hope for the best and prepare for the worst. Always keep an optimistic outlook in life and eventually things will turn out for the better.

Now eventually it will all come down to a Short Sale: This is when all the entities that a vested claim of interest in a property agree to take less than what it is worth, just for the sake of getting rid of it. You might be wondering why they would do this. Simply because they have so many mortgage homes on the books that a loss is better than one house for sale sitting around that has to be taken care of, taxes and insurance paid each month and a price that may take up eons to recover. So in short, (pun intended) Short Sales usually take longer than foreclosures (Ironic isn't it?) Since most of the time there are more people to deal with. There could be several persons involved; these could be the lenders, the owners that may still be in the house, the lenders committees, the lender for the buyer so on and so forth. Simply put, it is a mortgaged home or an REO (Real Estate Owned) OK let's get to what's keeping me busy right now.

So I went to Sacramento for a meeting with an esteemed real estate agent. I have already informed the agent regarding my preferences. To say that the list of exceptional selections is truly phenomenal would be an understatement. I ended up looking for about 4 hours to find two likely candidates that sparked my keen interest and made a reasonable offer. At the time of this writing I am in contract on one and waiting for the response from the other.

Here's a brief overview of what I deemed worthy to invest my hard earned money on. First off is a mortgaged house that has 1081 square feet, three bedrooms, a single bath with an attached garage. The walls and ceiling in the garage have been finished and the electrical is in excellent condition.

Here is the deal. As you might have perceived the home is in a foreclosure, the bank has it is being encumbered by all the houses they are repossessing. This nifty little piece of marvel was sold in 2005 for $315,000.00 when the bank got it back the previous owners had $207,000.00 in it.

They listed the house for $177,000.00 and we paid $117,000.00 for it, a $60,000.00 less than what the original list price was an almost half of the original price. Although the house is in need of some refurbishing and proper home improvement. You can't argue the fact that it was an excellent steal for the price. Some minor home furnishing here and there which I don't mind. A new roof, fixture upgrades, home appliances, paint jobs, carpet and wall decors.

Food for thought... When the real estate market is down, guess what, you would not know if the rental market goes up. Viola... caching!!! Instant income opportunity, as long as you play your cards right in this business, there is always money to be made.

This house will now be a rental, making a positive cash flow from day one. Once the market has recuperated and is back on track, imagine the income possibilities I would have.

I'll be frank with you in saying that I was not in financial abundance when I made this deal. In fact I was scrimping as much as I can but believe me when I say that the lenders are definitely willing to deal. They don't want all the houses they have and are willing to go low if you say "no go". Be assertive and keep in mind you are the customer and your offer will always be taken in to consideration regardless of the marketing acumen of the lender.

You don't necessarily need to have a business degree nor a marketing background. Just a keen eye, some intrepid curiosity, effort and a little bit of business aptitude and you're all set for real estate success!

Let's Go Make a Deal... but not just any deal let's make it an "Excellent Deal"!