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4 Ways to Buy a Home

December 29, 2010 No Comments

 Newly Built Home – There are still newly built homes on the market.  In the Sunday section of the paper these are highlighted with a map.  Sometimes there is special financing available through the builder.

  1. Resale Home – These are homes for resale by the owner.  Sometimes the owner still lives in them and sometimes they are empty.  Financing is available through the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac.  All three agencies require proof of income, a down payment and will examine your credit.  30 year fixed mortgages are available.
  2. Short Sale – These are homes for sale that require homeowner/seller approval and lender approval.  The seller owes more than the property is now worth.  As an example, the mortgage owed is for $400,000, but the house is only worth $250,000 right now.  The seller and their mortgage holder have to approve the contract for sale.  The loan you get will be a typical FHA, Fannie Mae or Freddie Mac 30 year fixed.  But you might have to wait – even up to 6 months – for the mortgage holder to approve a lesser pay-off.
  3. Foreclosure – For some reason a lot of people think buying a foreclosure requires a strange and different loan.  It does not.  BUT FHA, Fannie Mae and Freddie Mac do require an appraisal.  The appraisal cannot say the house is an extreme “fixer” and needs lots of lots of work, or you won’t get a typical 30 year fixed rate loan. If the foreclosure you are looking to buy is tired and dirty – which a lot of them are – you generally can get a typical loan.  If the property is an extreme “fixer” and it is obvious, the appraiser will note this and the lender will not approve your loan.  Other than that, buying a foreclosure is like buying a regular resale.

Owner is a CA DRE Broker with over 20 years experience in real estate and lending.  His number is (707) 523-2099.  See website at: sunpacmortgage.com.

The Wave Is Coming

December 27, 2010 No Comments

We keep hearing reports that the foreclosure wave is coming. It’s on the news and in the paper. Maybe it is, maybe it isn’t. We have not seen much evidence of it in Sonoma County. Here’s what we know so far… Fannie Mae has been holding back flooding the market with foreclosures so prices stabilize. That is working well. The Medium Price has gone up from $305,000.00 to $320,000.00 since January 2009. Foreclosures for sale have gone down from 350+/- in December 2008 to 116 as of today.

IF the wave is coming you need to prepare now. All offers made on foreclosures require loan approval be attached to the offer. Sometimes 2 loan approvals are required. If you do not have loan approval they will not look at the offer. Get loan approval now!

There are 3 types of loan you can get right now. Fannie Mae and Freddie Mac (usually 30 year fixed, low interest rate loans) for as little as 5% down. FHA an easier standard for loan approval and only 3-1/2% down. And lastly, private money from private individuals. These private money loans are needed if the house (a wreak/dump) does not qualify for the government loans. Private money requires 20% to 25% down, but the private party lending the money does not care what shape the property is in.

The Federal Government is keeping rates low. Normally rates are dictated by the yield on Treasury Bonds. Yields are up and rates should be up, but they are not. The guys on Wall Street are befuddled because the normal measure of interest rates isn’t happening. The “wave is coming” is the “perfect storm” for buying. House prices are low and interest rates are low.

This perfect storm lasts for a brief time, so get approved now and be prepared. Owner is a CA DRE Broker with over 20 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

BUY DIRT, THEY AIN’T MAKING ANY MORE

December 20, 2010 No Comments

Will Rogers, world famous humorist in the twenties and thirties, said, “buy land, they ain’t making any more of it.” Land back then was dirt cheap, especially during the Great Depression. History repeats itself and now you have the opportunity to make it work for you.

The Median Price has gone from the bottom of $305,000.00 to $350,000.00 in February 2009 up to $350,000.00 by end of May 2009. The number of foreclosures on the market in Santa Rosa has gone down from 350+- in November and December 2008 to 101 as of last Thursday.

You know, A LOT of people made money during that Great Depression. How? They did not follow the pack. This is very hard to do. The best managers of money (Boone Pickens, Warren Buffet, and Bill Gates – for example) are a different breed of cat. They seem to operate opposite of the crowd. They buy when no one else is and they will freely tell you to do the same. It takes a brave soul to not follow the crowd.

There are statistics that show things are not as bad as they seem. In Sonoma County home sales are up – way up. First time buyers can finally afford to buy and they are. There are multiple offers on many homes. Homebuyer loans are getting approved and people are moving into these homes. There are not as many homes on the market as there were at the peak in November 2008, which will serve to drive the prices up.

The moral of the story is – “buy land, they ain’t making any more of it.”

Owner is a CA DRE Broker with over 20 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

Private Mortgage Investing is Ripe

December 15, 2010 No Comments
 Anyone with money can invest and become a Private Mortgage Investor.  It’s easier than you would think.  And with the Sonoma County percentile of houses being sold increasing over this past year, it’s a great time to get started!

 Becoming a Private Investor can earn you upwards of 10% in return by investing in mortgages.  And by investing in real estate mortgages your investment is secured.  Investing in mortgages isn’t only buying or selling of mortgages at a discount.  It includes directly lending your private money to individuals and securing that loan with a mortgage against their real estate.

As a Private Investor you can set the yield on the promissory note with the interest rate, points and prepayment penalties.   Many individuals have started or are continuing as a Private Mortgager Investor as they can secure a consistent monthly income from it.   It can be an excellent cash flow for someone retired. 

For example, a private investment recently done for an individual to buy a home came to $65,000 with a rate of 11.5% and the Investor gets a monthly return of $$$$.

A Private Mortgage Investor is also known as a Private Mortgage Lender, a Hard Money Investor, or a Hard Money Lender.  They are all private individuals lending their money directly to the borrower with a promissory note with interest rates, points and prepayment penalties the investor sets, and securing that promissory note with a real estate mortgage.  

Private Mortgage Investing is ripe.  Time to jump on the bandwagon and get a good taste!

 Owner is a CA DRE Broker with over 22 years experience in real estate and lending.  Contact him at (707) 523-2099. See more details at www.sunpacmortgage.com 

WHAT IS A “HARD” MONEY OR “PRIVATE” MONEY LOAN

December 15, 2010 No Comments

There are several types of loans you can use to purchase or refinance. This applies whether you are buying a home to live in; a home to rent out; or a commercial building. They include the standard 30 year fixed rate mortgage; the government FHA/VA loans; a commercial property SBA loan; or a private money loan.

Private money is money borrowed from private individuals. I bet you’ve borrowed money from a relative. That was a private money loan. It wasn’t from the bank or some other institution. Most private money lenders/investors lend money through a mortgage company (there are laws that require this).

Why would anyone borrow private money? There are some great advantages. The property you want to borrow against may not be something a bank will lend on. Banks require a property be in good shape. What if you are looking for speed? Hard money loans are generally much faster than a bank loan. What if your credit isn’t bank worthy? A private money lender will lend you money even with bad credit!

Private money loans are based largely on equity. The most you will get is 70% of the value of the property. If it’s worth $300,000.00 you will be able to get $210,000.00 If you want a 100% loan, hard money will not work.

An example of a hard money loan just happened. The borrower had almost all of the money to purchase a house. She needed only $75,000.00 more – but didn’t qualify for a bank loan. The purchase price was $231,000.00. She only wanted to borrower 32% of the value. That loan got done within 4 days for a quick close. She beat out other’s that put in offers for the house. She could and did quickly close and her house payment is the payment on $75,000.00.

Another example, a contractor wanted to buy a dump house. No bank would lend on it because it was so dilapidated. The contractor had enough for a decent down payment and proved he had enough to fix it up for resell. He got a hard money loan was able to fix up the house and pay off the loan within 4 months.

Maybe you need a hard money loan!

[youtube=http://www.youtube.com/watch?v=V2ebzlL4360]

Owner is a CA DRE Broker with over 22 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

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