Tag Archive for: real estate loan

 

 

Refinancing may have just become more expensive for both rate and lower LTVs.

 

Wow, what is this? The powers that be are still messing with our beautiful lending world. It’s not a shock that government officials seem more focused on getting votes at the cost of property owners and mortgage companies, encouraging tenants not to pay rents and not lending a hand with evictions.

 

What We Know:

Mortgage rates are so low right now (in the mid 2’s for owner-occupied, and low 3’s for investors) that still-employed buyers should be running out and buying homes left and right.  After all, the number one reason buyers purchase is that they can fit the payment into their monthly budget. We should be seeing mortgage companies throwing money out to everyone. We should see buyers buying and investors refinancing (increasing that cashflow without adding more properties.)

 

 

So why isn’t that happening?

 

In short- our government is hard at work wreaking havoc in the lending markets, making it harder for all of us to get a loan, especially refinances.

 

Sure, it sounds good in theory: Allow anyone who wants to defer a payment or 4 during an economic crisis to do so, without proving any reason based on financial hardship.

 

How does this impact us all?  Glad you asked.

 

If a lender helps someone out and refinances them and they decided to go directly into forbearance, (yes, people WERE doing cash-out refinances with the plan of deferring payments to take advantage of the government’s kindness,) that lender cannot sell or move that loan off of their books to those that service FHA, VA, Conventional loans, etc, unless they want to take pay a huge fee. So, they decide to hold the loans, thus filling up their lending bucket.

 

So what happens next?  The lenders don’t want to take a chance that a percentage of people are going to take advantage of this opportunity, so they raise the cost of refinancing for everyone.  On top of that, they will start lowering the LTVs (loan-to-value ratios,) making the box for traditional financing harder for all.

 

Yes, obviously those that need mortgage forbearance should be able to use it, but it’s the ones who are not in financial need that are making these numbers grow, creating more costly financing for us all.

 

Let’s look at the numbers from an article from MBA.com from the end of April:

 

Key findings of MBA’s Forbearance and Call Volume Survey – April 13-19, 2020

  • Total loans in forbearance grew relative to the previous week (from 5.95% to 6.99%.) In comparison, only 0.25% of all loans were in forbearance for the week of March 2.
    • By investor type, Ginnie Mae loans grew the most relative to the prior week: from 8.26% to 9.73%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 4.64% to 5.46%.
    • The share of other loans (e.g. private-label securities and portfolio loans) in forbearance increased relative to the prior week: from 6.43% to 7.52%.
  • Forbearance requests as a percent of servicing portfolio volume (#) dropped relative to the prior week: from 1.79% to 1.14%.

What You Can Do:

Keep up with your payments if you’re able. The more of us that are paying on time and in full, the quicker the lenders will start to relax and start loaning again. Everyone wins.

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Investor mortgage report

The going is still tough out there for real estate investors looking for traditional financing.

 

 

What We Know:

This week doesn’t bring much (if any) relief to the mortgage markets.  The Feds have slowed down buying mortgage back securities and closings are still tough.

 

We are seeing the majority of our payoffs being delayed 2-3 weeks as mortgage companies push loans through these uncertain times.

 

Unfortunately, this means–once again–the real estate investor doesn’t rank high on their list of loans to close (or close fast).

 

The good news? There are still lending options for Real Estate Investors.  You just need to know where to find them.

 

Even though most traditional lending options are currently off the table, there is still one source that is interested in lending to real estate investors (at least in some markets):

Credit unions.

 

 

According to our market research, there are still a couple of credit unions maintaining business as usual. Better yet, they are still lending with good terms on rental properties.

 

Why do they seem less impacted than the rest of the lending world?  The answer is heavily based on their loan mix. Unlike banks, credit unions do not have a heavy investment in all these small businesses that have closed down. (Remember, the closure of small businesses impacts banks via deposits and bad loans. Bad loans create a need for banks to slow down on all lending.) Secondly, a good deal of their mortgages are kept inside the credit union, and don’t rely on secondary markets to keep lending.

 

So, if they can make a good loan on a piece of real estate, they will.

 

What You Can Do:

Of course, not every credit union lends on rental properties. You will need to call around in your market to find out which ones offer this service.  

 

 

Also consider that the ones who are doing these loans will be BUSY, and you’ll need to be patient.  It took us 2 days just to get a call-back…that is just reality in the strange times we’re living in.

 

Want to stay on top of what’s happening in the market, as well as what you can do to help your investor business thrive in a post-pandemic lending world? Get signed up for our weekly webinar series and join our mailing list for info, insights, and action items geared toward helping you take the guesswork out of your funding.

 

Sign up here >>>>

 

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Now isn’t the time to improve anything. It’s time to change everything.

 

Are you aware that over the course of the past few weeks, almost all lending for the investment community has dried up? Not only that, but it’s uncertain how long it will be before these products become available again.

But this doesn’t mean the end of the road for investment-based businesses who rely on funding to complete their deals.

 

Why should banks control us and our financial future? If they choose to close their doors and refuse to lend money to investors, then so be it. It’s time to change how the lending world works. 

 

Just because the economy takes an unexpected nosedive doesn’t mean our investments need to. When the banks say no, we can remain in control of our financial futures by turning to personal funding partners. 

 

OPM- or, Other People’s Money – funding is one of the best ways to gain and keep control over your finances as an investor and gives you the freedom to continue your business, even as the banks batten down the hatches.

 

Want more info on how to make the switch to funding your deals using OPM? Join us for our next weekly webinar! Whether you’ve dabbled with this way of doing business before, or you’re on the fence about how and when to get started, we’ll make sure you’ve got the information YOU need to thrive during these uncertain times.

 

Get signed up here! >>>

 

Just remember: Keep it legal, keep it safe, keep it honest.

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How do you find good deals? Well, that’s what this video from Bigger Pockets discusses. In this video, you’ll learn about the top 10 strategies for finding great real estate investment deals, even in a competitive market.

What are you waiting for? Now’s the time to find a great deal and start investing. Need help? No worries. Our team is here and ready to coach you through the process.

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It’s a new year, so it’s time to set some new goals. What are yours? Do you want to buy your first rental property? Do you want to boost your cash flow? Do you want to evaluate your current portfolio and find ways to improve it without buying additional properties? The sky is the limit, but it all starts by setting goals, and setting them properly.

Motivational Monday – Setting Goals

Ready to set your investment goals for 2020? Our team is here and ready to help you create a personalized plan. Contact us to get started.

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Deals and Closings

One of the key factors to making more on your investments is working with a lender who can handle your short-term AND long-term loans. Or rather, being able to quickly buy and quickly refi a property.

Why find a 2-Step Loan Program?

Well, most investors don’t have the luxury of closing a deal in 30+ days. They need to close as fast as possible, especially if they’re buying from a wholesaler with a strict deadline.

However, many investors are nervous about using non-traditional funding to close a deal upfront. What if they get stuck in a hard money loan for months and months? What if they can’t get approved for a long-term loan and get stuck with an expensive loan?

That’s why it’s so important to work with a lender who can handle both sides of the coin. And not just any lender, but a lender who has experience with short and long-term loans.

When you work with an experienced lender who offers a 2-Step Loan Program, you’ll:

  • Be able to quickly buy and quickly refinance a property.
  • Maximize your return on credit.
  • Maximize your refinance.
  • Enjoy less confusion and stress.

Think of a 2-Step Loan Program like a one-stop-shop for all of your real estate loans.

Less work, less hassle, more money.

Ready to learn more? Contact us today to get the ball rolling.

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Quick to Buy, Quick to Refi, a new 2-step loan strategy, helps you maximize your loan amounts while limiting the amount of cash you put into a project. It also helps you rapidly finish your projects and buy again, and again, and again.

What does that all mean? It means you no longer need to worry about missing out on great deals and getting stuck in expensive hard money loans.

The Quick to Buy, Quick to Refi strategy all starts with properly setting up your short AND long-term loans.

Now, even though your short-term loan will come first (to quickly buy an under market property from a wholesaler), a key step is to FIRST get pre-qualified for the long-term loan. Why? To ensure you’re able to maximize both loan amounts. If you can qualify for a larger loan upfront, then it’s likely your short-term lender will match that amount.

It also means you’re already going through the process for securing a long-term loan as you begin renovating a property with a short-term loan. Think, “Two birds, one stone.” By the time you finish renovations, you’re ready to refinance into a long-term loan.

But, hold on. You also need to know about the types of refinances. There are two you need to know about: “rate and term” and “cash out”. And yes, it matters you know the differences.

Ready to find out what about those differences? Then check out the whole video here and start capturing free equity, boosting your cash flow, and investing in more properties.

Want more videos with more tips to maximize your cash flow? Then check out our new video page, or subscribe to our new YouTube channel! Be sure to also check out all of our invest tools.

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