Tuesday, September 29, 2009

How A Home Equity Loan Works

Home Equity Loan

Knowing how a home equity loan works will help you determine whether a fixed-rate loan or a home equity line of credit is the best for your financial situation. With a little research you can get the best type of loan available

Home equity loans are sometimes referred to as home improvement loans and equity loans. They are generally used for large purchased.

4 Important Aspects To Consider Before You Apply

When you apply for a home equity loan, it is wise to know how a home equity loan works in order for you not to put your home at risk. The difference will now be the amount of equity you have in your home, or the home equity. The lender will now use the value of your home equity to determine the potential amount you can borrow for a home equity loan.
Normally, a lender will base your allowable home equity loan on a percentage of your home’s equity. Traditional lenders will limit your home equity loan to 80 % of your home equity. However, more aggressive lenders allow borrowers a home equity loan which is more than the home’s appraised value.
If you are considering getting a home equity loan, you can either get a fixed rate loan or a home equity line of credit. Lenders usually base the rates on their home equity loans on their Prime Interest Rate, the interest rate they charge their most qualified clients or borrowers.
Lenders will then either subtract of add a percentage, usually 1-2 %, from their Prime Rate to determine the interest rate you will be charged. This percentage will, therefore, depend on your credit and the amount of money you wish to borrow.

Researching The Best Home Equity Loan Companies

The best way to get a good home equity loan deal is by choosing the right lender among lots and lots of home equity loan companies. There are lots of home equity loan companies to choose from.

Some home equity loan companies have variable interest rates. These interest rates are adjusted by the home equity loan companies depending on the interest rates changes in the market. Some home equity loan companies offers home equity loan deals that has flexible terms but always make sure that you understand fully what they are offering. Compare the rates of the home equity loan companies that have the same home equity loan terms.

Some home equity loan companies offer hybrid loans. A hybrid loan is another type of home equity loan that offers a fixed interest rate. Hybrid loans often have lower interest rates than most 15 to 30 year fixed rate loans. This type of home equity loan is ideal for a borrower who wants to have short term loans. These types of home equity loans have no prepayment fees.

Home equity loan companies are constantly looking for homeowners who want to refinance their home equity. The interest rates that these home equity loan companies offer are very low. If you want to shop for a home equity loan, there are lots of home equity loan companies found on the internet.

Several websites offer their services to homeowners who are looking for an ideal home equity loan deal. You can get many loan quotes within just a few hours in most cases.

Dean Shainin is a consultant specializing in home loans, strategies for loan financing, home equity loans, and consolidation loan information. To see a list of recommended loan companies, tools, resources, free quotes and articles, visit this site:Best Home Mortgage Loans

Get free valuable online tips for saving money from his: Best Home Equity Loans website.

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Sunday, September 27, 2009

Flipping Real Estate: What's it About & How can I Do It?

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Flipping Real Estate

By Heather Seitz

Flipping Property: What's it About & How can I Do It?

Your Quick Guide to Making Money Flipping Real Estate in 7 Simple Steps...

Every time you turn your head, someone else is talking about flipping property. What are they really talking about and is it something that YOU can do and
make money doing?

First, let's define the two types of "flipping real estate".

Assignment Of Contract: This is ofter referred to as Flipping The Contract. You find a property for "pennies on the dollar", put it under contract and then "flip" that contract to, most likely, someone that is going to do the rehab, or renovation on the property. Another term used to refer to this type of property transaction is wholesale real estate investing.
Flipping Real Estate: Buy a property, fix it up, and resell it to an "end buyer". This is known as "flipping real estate", "rehabbing", or "retailing" to name a few.

OK, now that we've gotten the terminology out of the way, I want to first start by telling you that real estate is simple, but not easy, so if you're looking for a get rich quick scheme, you're probably going to get yourself into trouble.

Now... on to how YOU can make money flipping real estate.

This article focuses on the second definition of flipping real estate: buying, fixing and reselling.

Step #1 - Find the Right Deal

If I made a dollar every time someone told me there were no more deals, I'd be a multi-zillionaire by now! Here's the thing and I want you to get it through your head! There are PLENTY of deals - even where you live! Make a consistent effort to really look for houses that are overgrown, in need of paint, possibly boarded up, etc.

These are going to be your best bet for flipping real estate.

Step #2 - Estimate the Repairs

You can either go ahead and bring a contractor or handyman with you or you can get a simple calculator that will figure out the "rough" numbers - like the one found at www.fixingandflipping.com or you can read more about the costs involved when making real estate flip at Calculating Profits when Flipping Real Estate

Understand, however, that more often than not - like 99.99% of the time - your budget will come in lower than your actual costs! You may also want to have a home inspection to check out the major items: foundation, roof, plumbing, electric, HVAC, etc.

For an example of what can go wrong when you are hoping to turn a quick profit see the risks involved in flipping real estate.

Step #3 - Negotiate the Contract

This is where many people run away from real estate. "Contract" is not a four letter word! In fact, it is your best ally when you are negotiating!

Use your contract negotiations to pay for the repairs by getting seller contributions and repair credits. This will keep you from having to dip into your own pockets for repairs!

Make sure that you have a way out in case the deal isn't going to work for you. Some "escape" clauses that you can handwrite in are: - "Subject to satisfactory appraisal" -"Subject to partner's approval" - "Subject to satisfactory inspection"

Step #4 - Find Your Money

Don't get caught up on this one! Finding money is really much more simple than you might imagine if you've followed steps #1 - #3! I know it sounds cliché, but it's true: Find the right deal and the money will come.

You can use private lenders or hard money lenders if your credit's a little shaky, or in some cases, you may even be able to use a regular mortgage company to get the deal done! Just make sure it all makes sense financially!

Step #5 - Get Your Contractors in Place

You should have your workers ready to go before you even close the property. Think about this: what if your monthly payment on the property is $1500/month? That's $50 each and every day out of your pocket while the property is just sitting there...

Be ready to start the moment you close!

Step #6 - Manage the Renovation

Unfortunately, you MUST stay on top of your workers! Use a solid contractor agreement that protects you and follow up on them daily. Stop by every couple days minimum and push, push, push until the job is done!

Step #7 - Market and Sell the Property

Put a For Sale By Owner sign in the front yard immediately to start building a buyers' list.

Once the job is complete, call all the interested parties back and invite them to an open house and accept offers! Make sure you've kept all of your receipts so you can prove any repairs to the buyer's mortgage person and/or the appraiser.

You can read more about house flipping, see the article

7 Simple Tips For Flipping Houses.

Sure, it's possible to go ahead and turn property over VERY quickly.

My record from closing table to closing table (the time I bought the property till the time I sold the property) was 53 days for a quick $10,000.

But, make NO mistake, those types of deals are few and far between, so be forewarned - Flipping real estate takes work... But the rewards can be HUGE!

Recommended Resources:
     Finding Deals: www.motivatedsellermarketing.com

     Estimating Repairs: www.fixingandflipping.com

     Finding Contractors: www.servicemagic.com

About the author: Heather Seitz

Heather is the co-creator of Fixing and Flipping software, takes the guesswork out of estimating repairs. Learn how to estimate repairs and calculate profits in seconds.

Go to: www.fixingandflipping.com for your free video and mini-course.

Freedom Steps With Property Investing

Flipping Real Estate | Make Money Flipping Property | Flipping the Contract | 7 Tips for Flipping Real Estate | Calculating Costs & Profits when Flipping Real Estate | The Risks Involved in Flipping Real Estate |
The Aftermath Of The Real Estate Bubble | Wholesale Real Estate Investing | The End Of The Real Estate Bubble - Is It As Bad As They Say?

Flipping - Make Money Fliping Property

Image by Getty Images via Daylife

Make Money Flipping Property

Would You Like to Make Money Flipping property?

Many beginning real estate investors get started by flipping real estate to make quick cash.

If you would like to make more money by investing in real estate, you need to know a few essentials.

A Simple Definition of Flipping: Buying property and reselling quickly, hopefully for a large profit. Usually, people think of flipping houses, or the buying and selling of a home fast, as the only way to make money flipping real estate. However, some investors specialize in other types of real estate such as land or strip centers.

Some confusion arises over the process of making money flipping property.

People who specialize in finding bargain real estate, obtain a purchase contract, and then sell the contract before taking title to the property are known as Bird Dogs.

These beginning real estate investors get started with no money down by:

Finding a seller under stress with a bargain property
Securing a sales contract
Selling their contract for roughly $500 to $5,000 to a seasoned real estate investor

Isn't real estate flipping illegal?

Flipping real estate isn't illegal. However, many unscrupulous investors committed mortgage fraud to make fast money.

Some of these investors, working with mortgage brokers and appraisers, resold houses to unqualified buyers inflating the property value and home buyer's qualifications. Often these home purchasers had no money or little money down.

When these new home owners defaulted on the mortgage payment, the mortgage lenders lost money because the house wasn't worth the inflated purchase price.

To avoid legal problems in real estate flipping, don't commit mortgage fraud.

To Make Money Real Estate Flipping

Prepare your financing so you can close on a deal quickly.
Learn your market so you know what makes a good deal.
Find a bargain property owned by a seller under stress to sell.
Secure a purchase contract in your favor.
During escrow, plan your selling actions.
Close on the property on time.
Immediately set your selling plan into action. If the property needs fixing, be prepared to get this done right away.
Market your property to your target market. Don't just list the property and hope for the best.
Find a qualified buyer. Have a loan officer check to make sure your buyer meets all the mortgage requirements.
Stay legal. Don't use an inflated appraisal. Don't help your buyer create false W2s, write phony credit letters, or prepare any false documents. You can pay many of your buyer's closing costs to make the purchase easier.

Buy low, sell for full-market value, avoid mortgage fraud, and enjoy your profits!

You can make money Flipping property.

Buy low, sell for full-market value, avoid mortgage fraud, and enjoy your profits! See the article on
Equity Discount Property Investing

-- to discover how you can increase your net worth by $20,000 to $100,000 on every deal that you do.

About the author: Jeanette J. Fisher

Jeanette teaches beginning real estate investors how to find, finance, fix, and sell houses for top dollar.

To find out how to make more money using interior design and get a free ebook on Flipping Houses, see: www.doghousetodollhousefordollars.com.

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Wednesday, September 23, 2009

Refinancing Real Estate Investment, Your First Step To Freedom

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Refinancing Real Estate Investment

MDC

This Simple Technique Can Help You Get Your First Investment Property

And Then The Next And The Next...

Refinancing Real Estate Investment is one of the best ways to begin real estate investing and keep progressing in your freedom steps with property investing.

If you are just starting out one of the best ways to get the money you need is to use the existing equity you have in your home. The best thing about refinancing real estate investment is that it allows you to get started without having to find out of pocket money for the property deposit and purchase costs.

You do this by first refinancing your home.

There are two ways you can go about refinancing real estate investment property:

Use your home or other property to secure a loan for the next property.
This is where you make a specific proposal to purchase a piece of real estate investment property using your home to secure the difference between the purchase price and the banks LVR (loan to value ratio) policy.

This will end up in your home being cross collateralized with the associated future difficulties that can lead to.

Request your bank of choice to set you up a home equity Line of Credit.
This is where the bank agrees to loan you any amount up to the limit determined by the available equity ou have in your home.

When refinancing real estate investment a cross colllateralized loan is the easiest to set up. It is probably the avenue that the bank or financial institution will assume you want to do it, but if you want to build a substantial real estate based portfolio, then request a line of credit be set up for you.

Then you will be able to access the money with ease and at your convenience.

For other advantages of a home equity line of credit or a line of credit generally refer to the HELOC page:

Lay the Foundations for Real Estate Investing Success

For the first investment property or maybe even the first two peices of investment real estate, a cross colllateralized loan is the easiest to set up. It is probably the avenue that the bank or financial institution will assume you want to do it, but if you want to build a substantial real estate based portfolio, then request a line of credit be set up for you.

Then you will be able to access the money with ease and at your convenience.

For other advantages of a home equity line of credit or a line of credit generally refer tothe HELOC page:
Home Equity Line Of Credit

A brief outline of the specific advantages when refinancing real estate investment are that you can start with little on no money of your own and as equity builds you can continue with your refinancing real estate investment properties and purchase more.

In this way Your asset base continues to grow, and it can all be funded by your growing equity base.

The way this works best is to always plan on holding your investment properties long term. If you adopt that attitude and ride out the occasional volatility of thte market then you are almost guaranteed success.

When refinancing real estate investment it is important that your first properties be new, so that you can claim maximum tax deductability for depreciation and expenses. You will need competent advice on this for your particular country and area.

See my other pages for tips on how to best set up your financing and reducing our tax burden in the asset building stage.

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Tuesday, September 22, 2009

Facilitate your property finance application with a Statement Of Financial Position

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Statement Of Financial Position

What Is It And How Do You Prepare One?

A statement of financial position will quickly give your bank a clear indication as to your credit-worthiness when you are applying for Real Estate Investment Financing.

It is a clear and simple outline detailing your financial details puts you in the best position and could be a strong influence towards you getting the best terms such as a good LOAN TO VALUE RATIO for your intended investment property and possible interest rate reductions.

This can be best achieved with a statement of financial position.

A Statement Of Financial Position will quickly give any bank or financial institution a firm basis on which to evaluate the strength of your loan application.

This is a simple statement that lists your assets and liabilities in addition to your income and expenditure details.

: This is where you list anything that has a resale value and then you list the value it could be sold for at that time.

List things like your home at it's current value, your car or cars at their insured value and an approximate value for your furniture.

I also list superannuationand insurance details although they don't actually have a resale value, but it gives a good impression to the evaluating loan officer. But I don't include these items in the subtotal here.
: Here list all outstanding loans. That is any loans against your home, car/s and also list credit cards.

With credit cards list them at their current outstanding balance and then the credit limit for that card. Most banks will automatically take any credit cards you have at the fully drawn value when assessing your loan application and so it is worthwhile minimising or eliminating unused credit limits on excess credit cards.
: This is where you list any income you are receiving including wages, share dividends, rent from other property and interest from money on deposit.
: This is less important to include because the bank's assessing officer will have their own method for assessing your ability to repay the loan based on the liability details you have given them above.

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Monday, September 21, 2009

Use Your Home Equity To Finance Your Real Estate Investments

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Using Your Home Equity

By Sergio Haros

If you have owned a home for some time, you probably have amassed a nice nest egg of equity, particularly if you owned it through the recent price run up. So, how do you use it for practical needs?

The equity in a home simply refers to the difference between the value of a home and the amount you owe on it. An example always helps, so let’s use a simple one. Assume you purchased a home for $150,000 in 1990 and put $15,000 on it. As the years passed, the home appreciated in value and you paid down the mortgage. Today, the home is worth $200,000 and you owe $100,000 on it. Your equity is $100,000, the value minus the remaining amount you owe.

Equity in a home is a beautiful thing.

Why? Well you can use it to fund those things in life that you just have to do. If you want to improve your home, you can use the equity to do it. Most people seem to want three types of improvements – a new kitchen, new bathrooms or a new bedroom or two. All of these can be paid for using your home equity. The real beauty of taking this step is the improvements also add to the value of your home.

How Can You Access Your Equity

So, how do you access the equity in a home? There are a number of ways, but many people choose to use a home equity line of credit. That is a mouthful, so most refer to it as a “HELOC”. As the name suggests, it is a line of credit based on the value in your home. Using our example above, a lender would verify you have $100,000 in equity and give you a credit line for a percentage of the equity.

The percentage of equity that can be used depends on the lender. It tends to be capped at 80 percent of the total value of your home. In the example above, the credit line would be for $60,000 since 80 percent of $200,000 is this amount. That being said, lenders have all types of programs.

You can expect to pay a bit more in interest on your credit line. The loan is a second on your home, meaning that it is more risky than the original loan. With risk comes increased borrowing costs, in this case a higher interest rate. You should expect rates to be a point or two higher than what first mortgages are going for.

Sergio Haros is with Great Western Mortgage - providing California second home mortgage loan solutions.

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