Comments on: Real Estate Financing – What You Should Know About Home Mortgages

By: Lemiercat

Lemiercat — Tue, 03 Nov 2009 19:43:36 +0000

Talk to your bank, and talk to a loan broker. I have used both with good results. Your real estate agent should be able to suggest a good loan broker; that's how I found mine. He put together a reasonable package (it wasn't cheap), and two years later we refinanced into a much more reasonable mortgage.

By: Mark M

Mark M — Tue, 03 Nov 2009 00:29:03 +0000

You are being TOO generous. The realtors make up to 6% on their transactions.. industry standard for financing cheaply is 1 to 1.5% total between origination and ysp….. Industry standard for financing fees that are moderate but still fair is 2 to 2.5% between origination and ysp… Anything after that is pretty much not being so fair.. Unless of course you have jumped through a thousand hoops trying to get their loan done. Like driving to the courthouse because they dont have their old bankruptcy papers because they have lost them.. Having to repair their credit etc etc. In this case it is fair.. YOU are your KNOWLEDGE is worth money too. Your time is worth money. Please don't sell yourself short! There is no way you should be only bringing home 1500 a month if you are closing 6 untils per month…

By: Love Doctor

Love Doctor — Mon, 02 Nov 2009 16:25:17 +0000

Are you ranting or asking?

Any explanation that boils down to "they were greedy" doesn't help. That's what capitalism is all about.

The question is why did their greed cause the problems now and not twenty years ago. What changed?

- One thing that changed is Residential Mortgage Backed Securities. This is a relatively new financial instrument that let the banks giving out mortgages pass all the risk on to other people.

The more mortgages the banks made, the more money they made, and the risk of the mortgage didn't matter, so the banks made many very risky mortgages.

- Another factor that changed were low interest rates. The Federal reserve kept interest rates low even though they knew the dot-com market and then the real estate market were heating up.

As long as interest rates stay low, lots of people can afford mortgages. So two things happened:

A. Many more people tried to buy homes. Greater demand and a fixed supply meant rising prices.

B. Because of the higher prices, many people ended up paying what they could barely afford even with the low interest rates.

So when the Federal Reserve raised the interest rates, many people found their monthly mortgage bill going up by hundreds of dollars, all of a sudden. Hence the defaults.

Certainly one could have a cash economy – where no one buys a house until they can pay for it in cash. But:

- An economy like that doesn't grow very fast. Credit lubricates the economy and makes faster economic growth possible. Of course, it also means that the crashes are deeper.

- The U.S. Congress deliberately decided to promote mortgages. For example, it gives tax breaks on interest payments.

For a long time, people would put down 20% down, banks would only lend to people who they felt could keep up the payments, etc.

It is the changes that have caused the problems, or at very least, exacerbated them greatly.

By: covenantglobal

covenantglobal — Sun, 01 Nov 2009 13:53:53 +0000

What most people do is to transfer the properties into a trust. Have the trust make the payments. Then send proof to the credit bureaus (spelling?) that the trust is making the payments and have them remove the mortgage information from your credit report. Now when you go to qualify for a loan, the mortgages do not show up and there are no issues. The best part is that the lenders cannot call the loan and you look like a renter.

You might want to consider creating some type of entity, such as an LLC, to manage the trust. Hell, some people even create a S-corp to manage the LLC. It all depends on your investing goals. You should talk to a CPA and a lawyer who specializes in real estate investing foradvice.

Regards

By: jkiebrown

jkiebrown — Sun, 01 Nov 2009 07:33:07 +0000

I'm in another state but don't get an agent look for a realtor they don't get their commission from you they get it from the seller. Thats what we did… and she happened to be a broker so we killed 2 birds with one stone…

By: justintime

justintime — Sat, 31 Oct 2009 22:36:19 +0000

Skip the realtor, talk to your lender!!! My understanding was that almost every mortgage written since the Carter administration required that the mortgage be paid off if the property was sold. If yours has this clause, and you sell it, you may suddenly be required to come up with $80,000. Can you do that? If not, you can't carry the paper on this deal.

By: Blogger

Blogger — Sat, 31 Oct 2009 15:49:05 +0000

Credit is a load of crap!!! It should be done away with. It’s part of an ungodly, satanic system to destroy people’s lives and ruin them. We need sound money as mandated by the Bible and the Constitution.

By: frostytink

frostytink — Sat, 31 Oct 2009 15:22:11 +0000

There is no difference in the financing – unless the appraisal shows significant damage and the lender chooses to not lend on the property because of that.

By: WPMixer

WPMixer — Sat, 31 Oct 2009 11:20:55 +0000

checking account instead of the savings account. She said it was nothing that they did, but I and my employer think she was lying.

By: sanjay_makhijani1976_29

sanjay_makhijani1976_29 — Sat, 31 Oct 2009 10:48:07 +0000

I am with weichert realtors and can help. the first thing any first time homebuyer should do is talk to a qualified realtor in their area. interview several, choose the one you feel most comfortable with. i can refer you to a good agent in your area. please email me