Why Invest in Real Estate Now?

Now more than ever Residential real estate ownership is gaining ever-increasing interest from retail investors for many of the following reasons:

--The current market can provide incredible deals and even in a "bad market" Real estate provides more predictable returns than stocks and bonds.

--Real estate provides an inflation hedge because rental rates and investment cash flows usually rise by at least as much as the inflation rate.

--Real estate provides an excellent place for capital in times when investors are unsure of prospects in the stock and bond markets or when investors expect long-term returns in stocks and bonds to be inadequate.

-- Cash Flow, Cash Flow, Cash Flow

--The equity created in a real estate investment provides an excellent base for financing other investment opportunities. Instead of borrowing from a 401(k) or family member to get the capital, investors can borrow against their equity to finance other projects. The relative ease in borrowing against a real estate investment combined with the deductibility of the mortgage interest makes this option a less-expensive method for financing other opportunities for investors who are comfortable taking on the additional financial risk.


Feel free to contact me if you have any questions.



To your success,

Oliver Graf

Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360

New FICO 8 Mortgage Score Now Available on all Top Three U.S. Credit Reporting Agencies

FICO, the nations leading credit score provider announced some big news....

A brand new FICO® 8 Mortgage Score

This new credit scoring model is designed specifically for mortgage lenders and focuses on providing a more precise risk assessment for the real estate market.

FICO® claims that the new FICO 8 Mortgage Score will reduce borrower, lender, and investor risk, and help support market stability

The FICO® 8 Mortgage Score will analyze the full credit history for the borrower and aids mortgage professionals in better predicting a borrowers risk so they can mitigate the incidence and high cost of foreclosure.

Take a look at this Exerpt from the FICO.com website...

"MINNEAPOLIS—October 26, 2010—FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today announced that its latest credit scoring product, the FICO® 8 Mortgage Score, is now available from all three major U.S. credit reporting agencies. Mortgage lenders now have access to more precise risk assessment tailored for the real estate market, which can help support market stability and reduce borrower, lender and investor risk.

The FICO® 8 Mortgage Score was built specifically to help mortgage lenders better predict mortgage performance and improve credit decisions for both current and prospective homeowners. The score analyzes the full credit history on file to deliver significantly sharper assessment of mortgage repayment risk, and aids servicers in earlier identification of borrowers at risk so they can mitigate the incidence and high cost of foreclosure. Validation results have demonstrated an additional predictive value of up to 15 percent for mortgage servicing over the broad-based, all-industry FICO® Score used most widely today.

“The FICO 8 Mortgage Score’s broad availability means that all U.S. lenders and servicers can now easily access scores that are fine-tuned for mortgage performance,” said Jordan Graham, executive vice president of Scores and president of Consumer Services at FICO. “Moreover, by combining this superior predictive performance with the FICO Economic Impact Service, lenders are able to adjust policies and strategies quickly based upon forward-looking economic modeling. This is what we mean by the FICO analytic advantage: the ability to use the most advanced predictive analytics to compete and win in this highly challenging environment.”

“To do the best job of evaluating risk and increasing profits, lenders need updated credit scoring analytics that incorporate mortgage credit performance since the subprime mortgage meltdown,” said Craig Focardi, senior research director at TowerGroup. “The availability of mortgage credit scores across all three credit reporting agencies will enable lenders to upgrade their loan underwriting and account management practices.”

The FICO® 8 Mortgage Score retains the same 300-850® scoring range, minimum scoring criteria, authorized user and inquiry treatment as the general-risk FICO® 8 Score. To achieve its significant increase in predictive strength, FICO Mortgage Score assesses several additional data variables from consumer credit files to specifically predict mortgage repayment risk. Accordingly, FICO Mortgage Score includes additional score reason codes compliant with the Fair Credit Reporting Act that help lenders understand and explain the scores to applicants."

Full Post here: http://www.fico.com/en/Company/News/Pages/10-26-2010.aspx

How do you think this new scoring system will affect the Lending Industry?

To your success,

Oliver Graf

Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360



*** Make sure you sign up for our FREE mailing list today! ***

The price of a “no-cost” loan

Some home buyers who may be concerned about paying high closing costs might be tempted by a “zero-cost” or “no-cost” loan option, which requires no cash outlay, but typically adds a half percentage point to the rate.

However, some financial consultants say these loans tend to be most beneficial to buyers planning to have the loan for less than five years.

KEEP THIS IN MIND

• One of the primary differences between a no-cost loan and similar loans is that no-cost loans do not tack on closing costs to the balance, but instead increase the rate.

• With no-cost loans, third-party fees including the appraisal, credit report, title insurance, recording, and the use of a mortgage broker are paid by the lender. The fees, including the amount the broker is being paid, are disclosed on the closing statement.

• Home buyers who bypass a broker and work directly with a lender may encounter less transparency, as loan officers are not required to disclose the amount the bank is making on the loan.

• Borrowers weighing their loan options are advised to use a mortgage amortization calculator to compare the costs for a conventional loan compared with a no-cost loan. The Federal Reserve provides an amortization calculator on its Web site at www.federalreserve.gov.

Read the full story:
http://www.nytimes.com/2010/10/24/realestate/24mort.html?ref=realestate


What are your thoughts on "No-cost" Loans?



To your success,

Oliver Graf

Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360



*** Make sure you sign up for our FREE mailing list today! ***



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Tips on loans and financing for Mobile and Manufactured Homes

What are mobile home loans?

Mobile homes are actually manufactured homes which are normally found in campsites or mobile home parks. They are transported by tractor-trailers over public roads to sites. Sometimes they are used as temporary accommodation on campsites. These houses can be placed in one location permanently as well as can be moved to other areas. If you want to buy this kind of homes, then you can take the help of mobile home loans from FHA (Federal Housing Administration) approved lenders. FHA approved lenders generally give loans from their own funds to eligible borrowers to finance the purchase of mobile home. FHA insures the lender against loss if the borrower can't make the payments.

Objective of the loan
The mobile home loan is used to purchase a manufactured home, a lot on which a manufactured home is to be placed.

How to qualify for mobile home loans?
The eligibility criteria for the mobile home loans are as follows:
• Borrower should have sufficient income to make the minimum required down payment.
• Borrower must be able to prove that they can make the payments on the loan and cover their other expenses.
• Borrower primarily intends to occupy the manufactured home as his principal residence.
• Borrower must have a suitable site to place the manufactured home. It can be a rental site in Manufactured Home Park or can be a home site. The site should have adequate water supply and garbage disposal facilities.
• The borrower should have an average credit score.

Loan term
The maximum term for a manufactured home or a single-section manufactured home is twenty years. However, for a multi-section manufactured home and lot, the term is for 25 years. For a manufactured home and lot, the term is for 15 years.

How can you find the dealer who gives mobile home loans?
You can get the contact details of the lenders in your area who give mobile home loans from the local retailers. Contact us if you need help of have any questions.

However, it should be noted that one of the basic criteria for getting mobile home loans is that manufactured homes must be according to the Model manufactured home installation standards.


Investing
Mobile home parks can be a great investment for the short and long term. If your interested in comercial real estate, especially mobile home parks, I recommend you take a look at this system, they give you everything you need to succeed. Click Here to find out how to make money with mobile homes!








Guest Post by:
Sabrina Gomez
http://www.mortgagefit.com/mobile-homeloan.html


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How is my credit affected: Short Sale vs Foreclosure

Credit Impact: Foreclosure vs Short Sale

How is my credit affected: Short Sale vs Foreclosure

In today's market, many homeowners are faced with the decision to try a short sale or just let the property go to foreclosure. Below are some points to think about / share with your clients.
If you have questions on whether missing mortgage payments and selling your property for less than the full amount you owe on it(short sale) will hurt your credit score, the answer is yes. HOWEVER, the credit damage done by a short sale is significantly better than a Foreclosure or Deed in Lieu, the short sale does not show up as long nor is the impact as severe as a property foreclosure.
Take a look at some of the most common questions….


1) When will I be able to purchase another house? (Primary Residence)

Foreclosure: Homeowner is eligible for re-purchasing a primary residence in 5 years

Short Sale: Homeowner is eligible for re-purchasing in 2 years


2) When will I be able to purchase another property? (Investment Property)

Foreclosure: Homeowner is eligible to purchase an investment property after 7 years

Short Sale: Homeowner is eligible to purchase an investment property after 2 years


3) Future loan disclosure: Will I have to disclose what happened with my house?

Foreclosure: On any future 1003(mortgage) loan applications when they ask, “have you ever had a property foreclosed upon…” you will have to mark YES, affecting what programs will be available to you and interest rate that you would qualify for.

Short Sale: There is no similar disclosure required for a short sale


4) How will my Credit Score be affected?

Foreclosure: The credit impact of a foreclosure is MAJOR and can reduce your credit score anywhere from 250-300 points.

Short Sale: Only late/missed payments on the mortgage will show up as derogatory items on the credit report. After the sale is completed the mortgage will be reported as paid or settled. Short Sales can affect your score differently depending on how many payments are missed, sometimes as little as 50 points. A short sale will have an affect on your score for approximately 18-24 months.


5) How will my Credit History be affected?

Foreclosure: A foreclosure will remain as public record on a homeowner’s credit history for 10 years, sometimes even longer.

Short Sale: Short sales are currently NOT reported in the credit history of a credit report. The loan is generally reported as “paid off, settled”




For all the information on Fannie Mae's guidelines, go to...https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf


If you would like Free information on Short Sales, please contact me anytime.

What are you noticing in today's short sale / foreclosure market?


To your success,

Oliver Graf
Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360



*** Make sure you sign up for our FREE mailing list today! ***



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Tips for purchasing a home with FHA or VA financing

Tips for purchasing with FHA or VA Financing.

If you are planning on purchasing a home soon and will be using a VA or FHA loan in order to finance your purchase, you must include that information in your offer since government loans place additional financial and performance obligations on the seller know as Non-Allowable Fees

Non Allowable Fees
For starters, FHA and VA loans prohibit buyers from paying certain fees that are often charged by lenders, escrow companies, settlement agents, and title companies. They are known as "non-allowable" fees. These fees still get charged, but as the buyer of the property, you are "not allowed" to pay them. The result is that the seller will have to end up paying them instead of you.

Most of these "non-allowable" fees come from your lender. By the time you are ready to make an offer you should have already been pre-qualified by a loan officer, so you will want to ask how much the lender’s non-allowable fees will be. You might also want to get an idea of what non-allowable fees will be charged by the escrow company and the title insurance company.

Since these are fees the seller would not pay on an offer with conventional financing, this information must be included in your offer. You should also realize that since the seller will be paying these additional fees, they may not be as willing to go down on their price. If not, you as the buyer could also offer over asking price and ask the seller to credit that overage towards those fees.

VA and FHA Appraisals

Home appraisals and inspections on FHA and VA loans are stricter than on conventional loans and generally more expensive. These appraisers are required to perform a certain minimum number of inspections as well as evaluate the current market value of the property. These inspections are generally not as detailed as a professional home inspection and should not be considered a substitute, but sometimes they require repairs which you might want to negotiate with the seller.

If there is significant repair work required, add a clause to your offer that goes something like this. "If required repairs cost less than the maximum amount allowed, the excess will be credited toward buyer’s closing costs."


What have you noticed about FHA offers?

To your success,

Oliver Graf
Real Estate Expert


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