FHA Loans -Helping Americans Live The Dream
What is a FHA loan? FHA stands for Federal Housing Authority which is a national government organization that helps make it possible for American's to live the dream and buy their own home. Owning homes is good for society and the economy; it's good for individuals and families so the FHA's goal is to help everyone be able to achieve owning their own home.
FHA can help many people to be in a position to buy the home of their dreams. The common term used by realtors for a FHA loan can be a bit confusing and even a little misleading and as such many people just have no idea how a FHA loan can benefit them.
The FHA doesn't actually lend money to home buyers but instead a FHA loan is a type of mortgage protection or mortgage insurance. The mortgage protection is given on a mortgage so that there is less risk for the lender.
Zero Down Lease to own Home Mortgage
More Zero Lease to own Home Mortgage Down Ideas
Zero down Lease to own Home Mortgage doesn't really mean no down payment.
Most sellers need something as a down payment if they are providing financing. Most banks won't do 100% financing on real estate that is purchased as an investment. Zero Lease to own Home Mortgage down just means that the down payment won't come from your money. So where will you get it? Can you really profit from real estate without having money to start?
The answer is clearly yes. At our local investor's meeting the other night, one investor told me that he recently found a fixer upper, but couldn't arrange financing. What did he do? He assigned the contract to another investor for $6,000. In other words, all he ever had into the deal was a $500 "good faith" deposit, and his time, and he made a $6,000 profit. This is called "flipping."
Not only did he not need a down payment, but he didn't even have to buy the property to make money. There was enough potential profit in fixing up and selling the house, that other investors were happy to pay to take his place. The key here was that he knew how to find a good deal, and his offer included the right to assign the contract to another investor if he wanted to.
Now, if he had put the $500 deposit on a credit card, it truly would have involved none of his own money, except enough for gas to drive around looking at houses. Of course, he would have paid a 3% cash-advance fee and 18% annual interest for a month. This would have reduced his profit by $22.50. Yes, zero down is possible and profitable.
What if you want to actually complete the purchase, renovation and sale with zero down Lease to own Home Mortgage, and none of your own money invested at any point? There are dozens of ways to do it. One way is too find a partner. In fact, tomorrow I'll be talking to an investor who wants to use my money to complete the profitable renovation of a property. I want a share of those profits. Believe me, if the deal is good, there are people who want to bring their money into it.
Here is one example of how you might combine a couple investing techniques to keep your investment to zero. Let's assume you find an owner who is tired of being a landlord. He has a run-down house that he wants $80,000 for. You look at it and see that with $4,000 worth of clean-up and repair it could sell for $116,000. All the costs totaled will add up to around $9,000, leaving $27,000 potential profit in the deal. You have no money.
How about offering the seller more than he wants? Offer him $85,000, using a $500 credit card cash advance for a good faith deposit. The offer, however, is for $5,000 down, no payments, but the entire remaining balance to be paid within one year, with 7% interest. Why should he say yes?
You explain that he will get more than he wanted - maybe even a few thousand in interest too. His collateral will be safe, because unlike his renters who ran the place down, you'll be pouring money into fixing it up. He will have a first mortgage on a home that will soon be worth much more than what he is owed.
If he agrees, you find an investor who has about $15,000 to put into the deal. This will cover the down payment, repairs and other expenses, with a little left over for any unexpected costs. In return, he'll get his investment back and half the profits. If you complete the house quickly and on budget, this means over $10,000 for each of you.
The seller gets more than he is asking. The other investor gets a great return on his investment. You make $10,000 or more without investing a penny. Making sure that everyone wins is the surest way to make a deal work with zero down.
When you find a home that you want to purchase you will need money to purchase it so usually you would go to a bank to see if you could get a mortgage. When you find a bank with a good mortgage deal you will fill out an application and then the lender will look over your details and decide whether to loan you the money or not. If the lender decides that they will lend you the money they will transfer the money to the seller of the home. You will sign a contract with the lender in which you will agree to pay a monthly payment until the entire loan is paid in full.
That is a fairly basic outline of what is involved when purchasing a home. However it doesn't always run that smoothly and a lender doesn't always agree to lend money, particularly if the borrower is high risk. This is when a FHA loan can help. The FHA will provide mortgage insurance on the mortgage to protect the lender if a situation arises and you cannot repay the loan. When the FHA provides mortgage insurance the lenders are much more willing to loan money. So with this mortgage protection, this is how the FHA can help people to live their dream and own their own home.
If you have had some credit problems and don't have a very good credit history, but you would like to buy your own home then you may qualify for a FHA loan. Not all lenders will work with the FHA so if you are considering a FHA loan then you need to find a lender that will cooperate with the FHA. Your real estate agent should be able to help you to find a FHA preferred lender or you could check the FHA website. If you fill out a request online the FHA will respond with a list of lenders that you could use. If you are approved for a FHA loan you can receive lower interest rates and a smaller down payment. If you don't have the best credit score and are looking at purchasing a home then you should consider applying for a FHA loan.
Most sellers need something as a down payment if they are providing financing. Most banks won't do 100% financing on real estate that is purchased as an investment. Zero Lease to own Home Mortgage down just means that the down payment won't come from your money. So where will you get it? Can you really profit from real estate without having money to start?
The answer is clearly yes. At our local investor's meeting the other night, one investor told me that he recently found a fixer upper, but couldn't arrange financing. What did he do? He assigned the contract to another investor for $6,000. In other words, all he ever had into the deal was a $500 "good faith" deposit, and his time, and he made a $6,000 profit. This is called "flipping."
Not only did he not need a down payment, but he didn't even have to buy the property to make money. There was enough potential profit in fixing up and selling the house, that other investors were happy to pay to take his place. The key here was that he knew how to find a good deal, and his offer included the right to assign the contract to another investor if he wanted to.
Now, if he had put the $500 deposit on a credit card, it truly would have involved none of his own money, except enough for gas to drive around looking at houses. Of course, he would have paid a 3% cash-advance fee and 18% annual interest for a month. This would have reduced his profit by $22.50. Yes, zero down is possible and profitable.
What if you want to actually complete the purchase, renovation and sale with zero down Lease to own Home Mortgage, and none of your own money invested at any point? There are dozens of ways to do it. One way is too find a partner. In fact, tomorrow I'll be talking to an investor who wants to use my money to complete the profitable renovation of a property. I want a share of those profits. Believe me, if the deal is good, there are people who want to bring their money into it.
Here is one example of how you might combine a couple investing techniques to keep your investment to zero. Let's assume you find an owner who is tired of being a landlord. He has a run-down house that he wants $80,000 for. You look at it and see that with $4,000 worth of clean-up and repair it could sell for $116,000. All the costs totaled will add up to around $9,000, leaving $27,000 potential profit in the deal. You have no money.
How about offering the seller more than he wants? Offer him $85,000, using a $500 credit card cash advance for a good faith deposit. The offer, however, is for $5,000 down, no payments, but the entire remaining balance to be paid within one year, with 7% interest. Why should he say yes?
You explain that he will get more than he wanted - maybe even a few thousand in interest too. His collateral will be safe, because unlike his renters who ran the place down, you'll be pouring money into fixing it up. He will have a first mortgage on a home that will soon be worth much more than what he is owed.
If he agrees, you find an investor who has about $15,000 to put into the deal. This will cover the down payment, repairs and other expenses, with a little left over for any unexpected costs. In return, he'll get his investment back and half the profits. If you complete the house quickly and on budget, this means over $10,000 for each of you.
The seller gets more than he is asking. The other investor gets a great return on his investment. You make $10,000 or more without investing a penny. Making sure that everyone wins is the surest way to make a deal work with zero down.
No comments:
Post a Comment