Take Over Payments, No Qualifying For Loans To Buy Properties
One of the most powerful weapons of real estate investment is taking over payments of existing financing to purchase homes.
How many loans are really out there that you can take over payments on? Recently the American Bankers Association reported that in a single year there were close to one trillion dollars of new mortgages created from refinancing existing loans. Most of these loans were made at low 6%-8% fixed interest rates.
This indicates that there remains about a trillion dollars worth of real estate investment that is booked under homes owned by people around you. It would be of great profit if you were able to take over payments of these unpaid real estate loans from someone elses name to your own. You can do this by buying the real estate properties having such low interest rate mortgages attached to them.
You should be taking over payments instead of getting investor loans that are being given out mainly because investors are saddled with a high rate of interest on loans unlike home owners by mortgage lenders.
If you take over payments of an already existing real estate loan you are required to pay a lower interest rate than that by real estate investors. This obviously reduces your budget of loan payments considerably. You can resell the property later keeping the original loan as it is, the only difference being in such a case that you get a much more flexible choice of interest rate payment than what you had received while taking over from your buyer. This again enhances your monthly influx of cash.
Most of the money that you spend as loan payment expense will be for interest rate payment purpose. Only a fraction of this will be allotted to the principal reduction. Since the interest rate on the existing loan is lower, your interest payment will also be lower on the total real estate.
But that's just the beginning. If you're getting an investment property loan you'll be required to come up with a lot larger down payment amount than a home owner has to. You'll need to have at least 20% down while home owners often get away with as little as 3%-5% out of pocket.
As an investor you have to show around six months payments in advance unlike homeowners who show just 2 months payments in cash. Once you take over a property, you wont be required to put down a 20% down payment, and as an investor you can use that amount of money for other purposes.
But we're still not quite done yet. When you take over payments on an existing loan you benefit from all the loan payments previously made by the owner. Remember, the owner has originated the loan 2, 5 or even 10 years before you came along wanting to take over payments. The more payment the owner made on the loan you're taking over, the fewer months and years are left to pay on the loan until it is completely paid in full. So, taking over payments on existing loan speeds up the process and allows you to pay-off the loan balance and build up your equity a lot quicker.
This in turns means that you are free of handling any paperwork associated with taking the loan over, which has been taken care of by the homeowner.
This method of taking over payments is one of the most profitable means of sponsoring your real estate investment.
How many loans are really out there that you can take over payments on? Recently the American Bankers Association reported that in a single year there were close to one trillion dollars of new mortgages created from refinancing existing loans. Most of these loans were made at low 6%-8% fixed interest rates.
This indicates that there remains about a trillion dollars worth of real estate investment that is booked under homes owned by people around you. It would be of great profit if you were able to take over payments of these unpaid real estate loans from someone elses name to your own. You can do this by buying the real estate properties having such low interest rate mortgages attached to them.
You should be taking over payments instead of getting investor loans that are being given out mainly because investors are saddled with a high rate of interest on loans unlike home owners by mortgage lenders.
If you take over payments of an already existing real estate loan you are required to pay a lower interest rate than that by real estate investors. This obviously reduces your budget of loan payments considerably. You can resell the property later keeping the original loan as it is, the only difference being in such a case that you get a much more flexible choice of interest rate payment than what you had received while taking over from your buyer. This again enhances your monthly influx of cash.
Most of the money that you spend as loan payment expense will be for interest rate payment purpose. Only a fraction of this will be allotted to the principal reduction. Since the interest rate on the existing loan is lower, your interest payment will also be lower on the total real estate.
But that's just the beginning. If you're getting an investment property loan you'll be required to come up with a lot larger down payment amount than a home owner has to. You'll need to have at least 20% down while home owners often get away with as little as 3%-5% out of pocket.
As an investor you have to show around six months payments in advance unlike homeowners who show just 2 months payments in cash. Once you take over a property, you wont be required to put down a 20% down payment, and as an investor you can use that amount of money for other purposes.
But we're still not quite done yet. When you take over payments on an existing loan you benefit from all the loan payments previously made by the owner. Remember, the owner has originated the loan 2, 5 or even 10 years before you came along wanting to take over payments. The more payment the owner made on the loan you're taking over, the fewer months and years are left to pay on the loan until it is completely paid in full. So, taking over payments on existing loan speeds up the process and allows you to pay-off the loan balance and build up your equity a lot quicker.
This in turns means that you are free of handling any paperwork associated with taking the loan over, which has been taken care of by the homeowner.
This method of taking over payments is one of the most profitable means of sponsoring your real estate investment.
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After you master the strategy to take over payments on existing loans your real estate investing career will explode.
posted by Credit Counseling at
3:16 AM
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