The first question is probably “Why do we invest our money at all? Why not hid it under the mattress?” The answer is that we invest in order to have enough money to live on when we are no longer capable of or want to work. These funds must be sufficient to overcome the effects of taxes and inflation that eat into our savings each and every year.
Assume you put all of your savings in a bank savings account or any other type of “fixed” investment. (They are fixed investments because you are paid a “fixed” return on your investment, regardless of how much the institution is able to earn on your money). If you receive 5% interest and inflation runs 5% per year, all of your profit is used up. Not only that, you are paying income tax on that 5% interest you earned. You are losing money each year. At the same time, each year it will cost you more to do the same thing you did the year before because inflation is now working against you.
Stocks and real estate are the two primary ways of beating the odds. Assuming the market goes up, stocks give you two ways of earning money…the dividends you are paid plus a chance for appreciation. In recent months, many stock investors have been flocking into real estate investments.
Even in a bad economic market, real estate will usually fare better than stocks. God quit making land many years ago. What we have now is all we are going to get. Every year more and more people need a place to live, work, shop and play. They all want a piece of the fixed amount that is available. It’s the law of supply and demand. It’s easy to see why land…real estate will continue to appreciate in spite of some slow-downs in the economy.
Real Estate offers you four ways of making a profit and staying ahead of taxes and inflation:
1. The cash flow from the property (The profit after operating expenses and mortgage payments are paid). In other words, the money left over from receiving rental income after all expenses have been paid.
2. Mortgage principal reduction. Each month your tenants pay down a portion of your mortgage for you through their rent. This essentially equates to money in the bank.
3. Appreciation. The same factor that erodes your savings, inflation, helps your real estate investment. Real estate prices in today’s very hot market continue to increase, in spite of occasional economic market slowdowns.
4. Leverage. No other form of investing, of comparable risk, allows you to make as much use of leverage (other people’s money) to make money yourself. If, for example, you purchase a $100,000 investment property and only invest $25,000 of your own money and finance the remaining $75,000 you are earning appreciation on $100,000 worth of real estate with only $25,000 of your own money invested. If your property appreciates only 4% next year, you will have made a paper profit of $4,000 ($100,000 X .04) Since you only invested $25,000, your return is 16% on $25,000 ($4,000 / $25,000)…and that’s just the “appreciation” part of your profit.
Real Estate has proven to be the finest way to create wealth…and you don’t have to be a genius to learn how. That is the purpose of our web site…to show you how easy and profitable it is to become a real estate investor.
We have shown close to a quarter of a million people how to create wealth through real estate investing. Many report back with amazing results. Will you be next?LEARN MORE
It’s a dream we all have-to own our own home and stop paying rent. But if you’re like most renters, you feel trapped within the walls of a house or apartment that doesn’t feel like yours. How could it when you’re not even permitted to bang a nail or two without a hassle. You feel like you’re stuck in the renter’s rut with no way of rising up out of it and owning your own home.
Don’t Feel Trapped Anymore
It doesn’t matter how long you’ve been renting, or how insurmountable your financial situation may seem. The truth is, there are some little known facts that can help you get over the hump, and transfer your status from renter to homeowner. With this information you will begin to see how you really can:
• Save for a downpayment
• Stop lining your landlord’s pockets, and
• Stop wasting thousands of dollars on rent.
6 Little Known Facts That Can Help You Buy Your First Home
The problem that most renters face isn’t your ability to meet a monthly payment. Goodness knows that you must meet this monthly obligation every 30 days already. The problem is accumulating enough capital to make a down-payment on something more permanent.
But saving for this lump sum doesn’t have to be as difficult as you might think. Consider the following 6 important points:
There are some local or federal government programs (such as first time buyer programs) to help people get into the housing market. There are several programs that allow for no down payment, or will match a homebuyer dollar for dollar. Finding a qualified mortgage professional that is aware of such programs will give you a good idea of how much money you will need to have.
If you have the money for a down payment, but not closing costs, your lender may be able to give you a credit to help cover these fees. If you have good credit and income, but seem to be a bit short on cash, this is a viable option.
Some sellers may be willing to hold a second mortgage for you as a “seller take-back”. In this case, the seller becomes your lending institution. Instead of paying this seller a lump-sum full amount for his or her home, you would pay monthly mortgage installments. In addition, a seller can contribute to your closing costs through the proceeds they receive from the sale of their home. Having your own expert Real Estate agent negotiate this for you is very wise, and could mean the difference between a sale or not.
By borrowing money for certain investments to a specified level, you may be able to generate a significant tax refund for yourself that you can use as a down-payment. While the money borrowed for these investments is technically a loan, the monthly amount paid can be small, and the money invested in both home and investment will be yours in the end. Many companies 401K accounts will allow their employees to borrow money solely for the purpose of purchasing a home with no penalties. Check with your companies HR Representative to see if your company offers such a program.
If you can come up with more than the minimum down-payment, or can secure the loan with other equity, many lending institutions will consider you for a mortgage. Alternatively, a seller take-back mortgage could also help you in this situation. In recent years, several products have opened up to allow credit challenged home buyers the opportunity to purchase a home a re-establish their credit. Finding a qualified mortgage professional that is aware of such programs is of great benefit.
Preapproval is easy, and can give you complete peace-of-mind when shopping for your home. Mortgage experts can obtain written preapproval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for.
Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make the difference between obtaining a mortgage, and being stuck in the renter’s rut forever. Typically there is no cost or obligation to inquire.
There are many important issues you should be aware of that affect you as a renter. Why on earth would you continue to lose thousands by throwing it away on rent when with your agent you could take a few minutes to discuss your specific needs so that you can stop renting and start owning.
This conversation costs you nothing. And, of course, you shouldn’t have to feel obligated to buy a home at the time you review this. But by taking the time to explore your options, and learn about the ways you can afford to buy a home, think how prepared and relaxed you’ll be when you are ready to make this important step.LEARN MORE
While some people can purchase a home now or in a few months with little help, most people are terrified of talking to a real estate agent or mortgage loan officer. This report is for people who want a home, that have good income, and would like to retire debt free and wealthy someday. This report is a compilation of over 30 years of experience in the real estate and real estate finance industries. We have helped many people just like yourself purchase the home of their dreams, reduce their monthly costs, and restructure the way they pay their bills and spend their hard earned dollars.
We believe in educating a client about all of their choices. That means the positive and possible negative aspects of each loan. The reason we are in this business is to help people achieve their dreams of owning a home. We think you should ask as many questions as you want and we encourage you to request all the information we offer as a service to our clients. If you contact a real estate agent or mortgage loan officer who is unwilling to answer your questions, continue to look for the person who will help you.
Did You Know That You Could Buy A $100,000 Home For The Equivalent Of Spending $350 A Month On Rent?
Yes, this is possible. Homeownership has tremendous tax advantages and your home will most likely go up in value. So a home you purchase today for $100,000 and sell for $120,000 in 5 years may cost you as little as $350.00 per month.
You will have the ability to write off the mortgage interest and the property taxes on your annual income tax. Also, because the house increases in value you will earn money simply by being a homeowner. Over the years, we have heard many buyers say their accountant suggested they buy a house. After owning a home for a year or two they realize why. Owning a home provides you with one of the best tax advantages available.
Before we tell you the many ways we can help you buy a home with little or no money down, it has been our experience that many banks, mortgage companies, credit unions, real estate agents, and builders will avoid the topics below.
Our goal is to educate you as much as possible. We originate mortgages by educating the buyer an allowing them to make an educated decision on what loan fits their needs.
1 Point = 1% of the loan amount $800 paid at closing
2 Points = 2% of the loan amount $1,600 paid at closing
Often the difference in monthly payment from a slightly higher interest rate takes the equivalent of 10 years to equal these upfront costs. Many people will have refinanced or purchased another home before this occurs.
Beware of Adjustable Rate Mortgages (ARMs) and Balloon Mortgages. ARM rates will adjust depending on the loan. The ARM rates may adjust as often as every 6 months but in most case they adjust after 1,2,3, and 5 years. Those rates are far more likely to go up when they adjust. The Balloon Mortgage requires the borrower to pay the loan off when it matures, usually between 2 – 7 years.
There are many lending tactics to sell the borrower on a low rate and then charge outrageous fees and costs. Don’t fall into the “bait and switch” lending ploy.
However many VA, FHA, and IRS repossessed homes are sold with virtually no warranty. Also, the borrower may be limited on how much they can inspect the property prior to purchasing it. Often times these houses are in need of repair and need work. Not being able to thoroughly inspect the property puts the purchaser in a risky position.
There are some bargain properties but for the most part investors who have the “know how” purchase them. Loans with zero or little down payment typically will have higher property standards.
Keep in mind that purchasing this type of property requires bidding for it. The people you would be bidding against rehab houses for a living, so you may be at a disadvantage from an experience stand point. In addition, most homes that are for sale under these conditions require a substantial up front deposit that may not be refundable should your loan not close within a specific period of time. Also, once the seller of the home accepts your offer on these properties, the bank who owns the current mortgage generally has to agree to everything as well. This can sometimes be a lengthy process that many homebuyers are not aware of. It is always important to set realistic time expectations for yourself.
The problem comes when counseling companies do not meet the client’s monthly obligations with their creditors. As a result, they begin to have late payments on their credit report. In other words, they may not meet the creditor’s minimum monthly payment requirements because the budget calls for a lesser payment.
Overall, credit counseling is an effective tool to reduce debt as long as they meet the client’s due dates and the minimum monthly payment.
Typically local companies will be more concerned about their reputation and doing a good job for their customer. We operate from referrals so it is very important that we meet our customer’s expectations. Getting a loan online can also take longer because they will not have service companies (title companies, appraisers and others) to do the job in a timely manner.
Mortgage loans are complex and may not make sense to purchase online. This is especially true if the borrower is looking for maximum service and care.
Most lenders only have one source of funds. This type of lender is forced to “fit” the customer into a prefabricated loan program. They only have one or two different ways to handle the many different loan situations that occur.
It is important that you research your lender and try and get everything in writing. Also, it is easy for the wrong lender to take advantage of the borrower because of the borrowers vulnerable position. Most first time homebuyers need to be educated on the process of purchasing a home. We feel an educated borrower has the ability to make their own decision, a decision that is best for them. Often times a lender will make a decision for you based on the loan that will put the most money in their pocket.
We do not charge our customers anything during the initial loan process. They will pay for the services of the vendors we use throughout the process.
For example, if three buyers are looking at the same house, the seller will probably look closer at the buyer who has been pre-approved. Also, getting pre-approved may allow the borrower to get a better price for the property.
Get pre-approved. It could save you a lot of time and money.
You Might Have Some Questions. Here are some of the most common questions asked by first time homebuyers.
How Do I Qualify? The first thing you do is fill out the short loan application. The more information you give us in the beginning, the more accurate our response will be. Without question, the first step is to get pre-qualified.
How Long Does It Take? We can have your qualification completed in 24 hours. In most cases we will know where you stand and what it will take to get you where you want to be. The biggest delay in most cases is usually the applicant: procrastination, laziness, failing to get the necessary documentation together…these are the biggest delays in the process.
How Much Does It Cost? Zero. The pre-qualification is a free service we offer to anyone interested in purchasing or refinancing a home.
What are the Interest Rates? Interest rates change on a daily basis. Our goal is to get you the cheapest mortgage loan possible, a loan that will save you monthly as well as having low costs to close.
Once you become a homeowner, we can help you lower your rate in the future if interest rates drop. In many cases, we are able to get lower rates for those borrowers who can barely qualify. In ALL cases, we will work to get you the absolute best possible program that comfortably fits YOUR needs.
There will never be any upfront fee until you agree to the terms of the loan and you’ll never pay us a dime if we can’t get you a loan. We only get paid if we produce. That’s why we’re on your side. All our charges are shown on the Good Faith Estimate you will receive after we receive your application. Once we have the facts surrounding your situation, we’ll know the costs and so will you. There are never any surprises!!! We guarantee it.LEARN MORE
So many Americans want to age in place, remain in a home they love, and avoid all the trouble of relocating. It may make sense to do some prep work for this commitment. Below are some things to consider for retirement.
Having an easily accessible home can be very important when aging. This may include a single-story layout or relocating rooms to the main floor. Installing chair lifts in stairways, widening doorways, mounting grab bars, or putting non-slip flooring to accommodate lifestyle changes.
A recent study from the Center for Retirement Research at Boston College found that home equity is the largest source of wealth for seniors over the age of 65. Luckily you are able to access the equity in your home using A Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage. This mortgage allows seniors to access a portion of their home’s equity to receive funds without having to make monthly mortgage payments. You can use the loan to fund home repairs, pay for medical expenses, supplement retirement income or just to live out your retirement dreams.
Cost of In Home Care
Many seniors prefer to stay in their homes while they age. While this is the ideal situation, home care can be costly and is not always covered by Medicare. On average, the cost for in home care is around $3,900 a month. It is a good idea to have a backup plan if home care is not in your budget.
Home Maintenance Costs
As you age, maintaining your home may become a little more difficult. Hiring someone to help and do repairs here and there can really add up. It will be helpful to budget for these extra costs ahead of time.
Access to Health Care and Transportation
When you plan for aging in place, you want to ensure you have a good system in place to be near quality health care. Also, you want to budget for transportation alternatives; this may include Ubers/ Lyft services for times that it may be needed.
It is time to clear up the dark cloud around reverse mortgages. There have been many safeguards and regulations put around this kind of loan to ensure it a safe financial tool you can trust:
Federal Insurance: The Federal Administration authorized federal insurance for reverse mortgages with the housing and community development act. For the borrower, this guarantees the availability of funds. For the lender, this assures compensation if the loan balance exceeded the home’s value.
Non- Recourse Provisions: HUD makes the reverse mortgage a non-recourse loan. This means that the property is the only collateral the loan and that there is no personal liability on the borrowers part. This protects the borrower from owing more on a loan if it turns out that it costs more than the house is worth when the house is sold.
Required Counseling: Federal law requires the candidate to receive counseling by a HUD approved counselor. This ensures that the senior receives unbiased advice.
Lifetime Reverse Mortgage: The other great thing that HUD has done for reverse mortgages is make reverse mortgage insurance available to all FHA lenders. Lenders then developed the first “lifetime” reverse mortgage program where monthly mortgage payments are taken care of for life. The borrower must also maintain the home as a permanent residence, continue to pay property taxes and insurance, and maintain the home. The lender will set aside a specific amount of money for a line of credit for any amount over the mortgage due that the borrower can access at any time.
Limits on Rates and Fees: AARP and NRMLA extended support for limits on origination fees charged by the lender. With HUD orders and federal laws firmly in place, reverse mortgage rates and fees charged to the consumer are regulated and controlled. This guarantees that there are no “excessive fees” in a reverse mortgage. The Federal Truth in Lending Act requires lenders to disclose the terms and costs of the loan, such as the APR (annual percentage rate), payment terms, and any line of credit charges.
Reverse Mortgage Purchase: This program was created by Congress to help seniors transition into a home that better suits their changing needs. This process cuts costs and makes everything more simple by combining it into one transaction.
Non-Borrowing Spouse Rights: HUD announced new rules for non-borrowing spouses to allow a non-borrowing spouse to remain in the home even after their borrowing spouse has passed.
New Rules: These changes to the Reverse Mortgage are meant to encourage seniors to tap into their equity intentionally, and use the reverse mortgage as a financial planning tool rather than a crisis management tool.
The reverse mortgage industry has been working hard to build a product worthy of our nation’s growing senior population. With these safeguards in place, a consumer can feel safe taking a reverse mortgage loan and borrowing with confidence.LEARN MORE
A NEW ALTERNATIVE TO THE OPTIONS YOU KNOW
Many Americans spend much of their working lives saving for retirement. Everyone knows the significance of funding their 401k, stashing some money away in securities, and investing in real estate. The question is: how do you use those investments once you retire to supplement your income?
There are many ways to tap into your assets, but you need to be careful how you go about it especially for your retirement. Some options may have downfalls, for example:
• Cashing out your 401k too quickly may trigger a large tax burden.
• Accessing your home equity can lead to high interest expenses and could turn out to be costly.
• Taking out a line of credit can involve making monthly payments that decrease your retirement income.
• Selling your home may be an option but what if you want to stay in it? And your other options come with large expenses.
None of those options really serves to increase your retirement cash flow. An alternative way for seniors 62 and older to access their home equity after retirement, is through a reverse mortgage.
• A reverse mortgage will eliminate your monthly mortgage payments.
• You may also be able to receive payments that come from your home equity or a line of credit that grow.
• These funds can be set aside and used when needed.
• Most importantly, you retain ownership and title to your home.
There are interest and fees associated with this type of financing, but it’s likely that the interest is lower or comparable to other financing.
You’ve been paying for your home for much of your life. Isn’t it time you let your hard work pay you back?LEARN MORE
Real Estate market is booming right now. With the amount of jobs that are being created, now is a great time to get into the Real Estate Investing business! But many first time investors often wonder
“How do I get started? And where does the money come from?”
The secret the most successful Real Estate Investors know is that the smartest way to optimize your own money is to use someone else’s. Why would you want to invest all of your own money on one project, when you can borrow from someone else and work on three at the same time? This is where an Investment Real Estate Lender comes into the picture! By borrowing the funds needed to purchase and renovate a property, an investor can minimize their personal financial risk and maximize their profit. Instead of investing all $100,000 of your own funds into a Real Estate “Flip”, by borrowing money from an investment lending company such as Zeus Hard Money, a Real Estate Investor can turn a $10,000 investment into a $50,000 return!
So how does one get started in Real Estate Investing? Well the first thing to do is to call us here at Zeus Hard Money. We are a Lender that specializes in working with Investors and we love scenarios! We can show our clients just how much risk comes with their reward!LEARN MORE
One of the oldest adages in investing goes something like, “Land is always a good investment because we can’t make more of it.” This still rings true today and is a great way for someone to diversify their portfolio without having to worry about the volatility of the stock market.
But how does one invest? The most successful Real Estate Investors will all tell you that utilizing financing as a means to optimize your own funds is the best way to go when it comes to purchasing a real estate investment property. But with so many options out there, how does an investor know which one is best?
1. Conventional Loan
A Conventional Loan is best for someone purchasing a home that is “turn-key” and does not need repairs. When qualifying for a Conventional Loan, the following are taken into account:
• Credit Score
Depending on the occupancy of the home, a buyer will need 3-25% as a down payment. These loans are regulated through Fannie Mae and Freddie Mac.
2. Portfolio Loan
Portfolio loans are typically niche products that allow people who do not qualify for Conventional Financing to obtain a loan. They tend to be balloon notes that are due within 5 to 15 years. They are a good option for some looking for longer term financing.
3. Hard Money Loan
Hard Money Loans are typically used by Real Estate Investors purchasing a distressed property in need of repair. By obtaining a loan off of the expected After Repair Value of the property, an investor can minimize the funds they would need to invest in the property. These loans are short term and can be refinanced into a Conventional Loan or a Portfolio Loan after the property has been repaired, or can be sold for immediate profit.
So how do you know which financing option works best for you? Contact the Real Estate Investment Specialist at Zeus Hard Money. We can analyze your scenario and find the right loan to fit your investment needs. We work with investors looking for both a quick “flip” and a long-term rental property, and we love scenarios!LEARN MORE
Many of the most successful real estate investors use “other people’s money” (short-term interest-only loans) to purchase and rehab their projects. Then they pay back the loan when the sell the property, or refinance rental property into a conventional mortgage. This strategy gives them the ability to go about their business with less of their own money out of pocket.
Following are tips for being a strong borrower with Houston Real Estate Lenders.
Know the Property : Location, location, location. Is the property in an area that’s appreciating? How long are the homes in the area typically on the market? Was it a foreclosure that sat vacant for an extended time? Has it been vandalized? Is the plumbing and wiring present and in good shape. What about the roof? Is their moisture and mold? All these factors can impact the After Repair Value (ARV). The ARV will be an important component with Houston Real Estate Lenders. Have a Handle on Repair/Rehab : Some investors do their own repairs, but many use contractors. Be sure you’ve selected contractors with good references and good credit references. Don’t go too far. Stay within the norm for the neighborhood. Get bids and then anticipate running over budget by about 10%-15%. If you don’t run over, all the more profit for you! Your repair estimate will be an important factor to Houston Real Estate Lenders when calculating your loan.
Be a Strong Borrower : While the value of the real estate asset is key to qualifying, other factors strongly influence the terms offered by Real Estate Lenders. To receive the very best terms, you need to show enough liquid cash reserves to repair the property and pay for your personal and investment-related expenses for 6 months. Your credit score is taken into account. The higher the credit score, the better your terms will be. In addition, if you are acquiring rental property, you will want to ensure that you can qualify to refinance into a long-term mortgage once the purchase and rehab are complete.
Documentation : Get your documents together in advance. Houston Real Estate Lenders will be interested in recent bank statements, pay stubs, tax returns, and ID. The more you show, the faster the process will be and the better your terms will be.
More questions about Zeus Hard Money and what Houston Real Estate Lenders are looking for? Give the experts at Zeus Hard Money a call. We Love Scenarios!LEARN MORE
What do Top Producers have that the average realtor does not? Is it better marketing or better clients? No…Top Producers have a tool in their toolbox that others do not: Zeus Hard Money. So why use hard money lenders?
Keep More Cash
• The difference between the purchase price and appraised value is considered part of the down payment, so your buyer can bring little or no money to closing
Non-Traditional Income, Assets, or Credit
• Self-employed buyers with little taxable income, but large assets and great credit
• Retired buyers with little taxable income, but large assets and great credit
• Waiting on a new pension, insurance proceeds, or probate
• Credit challenged buyers with large assets
• Property that doesn’t qualify for traditional financing because it needs flooring, HVAC, toilet, inside doors, or appliances
• Real estate investors who want ugly houses to remodel and sell for a profit
Time Sensitive/Contingency closings
• Contingency sale fell through? Don’t let that kill your deal!
• Need quick pre-approval and funding to impress a seller?
• The average turn-time for traditional loans is 45 days. The average turn-time for Zeus Hard Money, Houston’s premier hard money Lender, is 7-10 days…but can be completed in as little as 4 days.