Hard Money Loans & Why You Should Work with a Hard Money Lender

/in , /by

Photo from Pixabay

By Michael Mikhail, CEO & Founder, Stratton Equities

Are you looking to finance a real estate investment but cannot get conventional financing due to a recent foreclosure or short sale? A Hard Money Loan might be the right option for you. Working with a Hard Money Lender will allow you to have your loan approved in half the time a traditional bank loan takes, giving you the opportunity to quickly purchase high in demand properties.

What is a Hard Money Loan?

A Hard Money Loan is ideal for the real estate investor who might have issues obtaining a traditional bank loan or a loan with full underwriting, such as a Fix and Flip Loan.
loan-4385136_1280

Photo from Pixabay

A Hard Money Loan is an asset-based loan: the financing is based on the Loan to Value (LTV) of the Asset. There are less restrictions than for other types of loans, so full underwriting and no minimum FICO score are required for the borrower, meaning you don’t have to worry about bankruptcies, foreclosures, collections, etc. They are usually capped at 65% LTV or less. Because of high cost regulations and predatory lending, Hard Money Loans are for investment properties only – so if you’re looking for an owner-occupied property, this is not the loan for you. Some states have non-judicial foreclosure laws, which protect lenders and make them more comfortable doing these high-risk loans, as the money is not sold on the secondary market and the lender holds the note.

How can I acquire a Hard Money Loan?

Applying for a Hard Money Loan is a fast and easy process. First, find an investment property and reach out to a direct private money lender to assess your loan scenario. Direct private money lenders, such as the Nationwide Lender Stratton Equities, can provide a Hard Money Loan for the following property types:
  • Single-Family
  • Mixed-Use
  • Multi-Family
  • Commercial
After applying for a loan, the prospective borrower will work directly with a loan officers to discuss their real estate investment dreams and how a Hard Money Loan can help them achieve their goals. Apply today and close in two weeks or less!

Why should I work with a Hard Money Lender?

Working with a Hard Money Lender gives you the security needed to take on a high-risk loan. With companies like, Stratton Equities, they have years of experience in working with real estate investors to achieve their goals. Direct Private Money Lenders provide loan programs with less underwriting and less guidelines that close within 14 – 25 days.
stratton_sm_aapl-610x610
Stratton Equities is the leading Nationwide Direct Hard Money and NON-QM Lender that specializes in fast and flexible lending processes. The team is owned and operated by experienced Real Estate Investors providing a reliable and knowledgeable team to help all Real Estate investors succeed. For more information, call Stratton Equities at 800-962-6613, email us, or apply for loan pre-qualification today.

A Successful Hard Money Loan Depends on These 4 Things

/in , /by

Image by Gerd Altmann from Pixabay

By Victoria Kennedy

Making money from real estate investing and becoming financially independent are goals for many people. There are always profitable opportunities – like fixing and flipping a property – that could generate considerable profit for an investor within a relatively short period of time, if executed quickly and effectively. When there’s a money-making real estate opportunity in front of you and you need some additional funds to make it happen, a hard money lender is the best place to turn.

These lenders are where seasoned real estate investors turn when they want to invest in multiple properties at once. They know that if they have 20% of the money required, the lender can provide the additional 80%. When those properties are successfully turned around, the investor reaps significant financial benefit. While many lenders promise the advantages of a hard money loan – a flexible process with quick approvals and closings as well as customized loan terms – not all lenders have the borrower’s best interests in mind or the ability to fulfill their promises. Going with the wrong lender could lead to an investor being unable to repay a loan and a seizure of collateral. That’s the last thing you want, and that’s the last thing a legitimate lender should want. Before securing a hard money loan for a real estate investment, you should follow these tips to find a lender whose goals are aligned with yours and will deliver what they say they will.

1. Know where the lender’s money comes from

dollar-sign-2198767_1280

Image by Manish Dhawan from Pixabay

A direct hard money lender will be invested in your success. The lender uses their own funds and balance sheet to make loans. If a borrower defaults on a loan, it adversely affects the direct lender. Because their money is on the line, a direct lender will make sure to write loans on projects that make sense and that they believe the borrower is capable of executing. Other types of lenders, the ones that sell all of their loans to larger hedge funds or institutions, don’t keep any of the risk. Lenders who sell a loan also have less flexibility since they must underwrite to the end-buyers’ guidelines to ensure the loan is sellable. The underwriting process usually takes longer and depends on a third-party willing to buy the loan to close the deal. Most investors prefer using a direct balance-sheet lender because they feel they’re working with a real partner, one who can get their loan closed quickly.

2. Research the lender’s track record

laptop-2567809_1280

Image by StockSnap from Pixabay

Anyone can write unsubstantiated glowing reviews about a business. It’s not uncommon for reviews on a company’s website to be forged, written by someone who has not used their service but still says positive things about the business. Look for legitimate direct testimonials on a company’s website that are verified. Verification is done by a third party – by companies such as YotPo or TurnTo – that ensure authenticity in the written review. You’ll get a good idea of a lender’s strengths and weaknesses if you read through the verified reviews – every one of them. After investigating online, ask other investors and service providers in the area if they’ve had experience with the lender.

3. Look for flexibility

yes-3664112_1280

Image by Gerd Altmann from Pixabay

Experienced real estate investors know that flexibility in hard money loans is most common with a direct lender who isn’t restricted by someone else’s guidelines. The direct lender can look at the unique conditions of each project and write loans accordingly. Flexibility particularly comes from a lender who is structured so that investors are dealing directly with decision makers. Find out who in the organization will be underwriting your loan. Will you be dealing with a junior underwriting analyst who isn’t capable of making changes without going to management for permission? Or, will you be dealing with an underwriter who is a partner in the firm who has the power to make changes and exceptions?

4. Deal with someone familiar with your market

google-maps-3337030_1280

Image by Tumisu from Pixabay

Real estate investing is a “block by block” business. Depending on the city, the value of similar houses can vary as much as 20% in just a few blocks. You need to find a lender that’s an expert in your region’s market. Experts in the market will know if an investment has the potential to be successful. Take the time to ask the lender about similar projects in the area they’ve funded. Without revealing another investor’s private details, they should be able to tell you where they’ve seen projects like yours thrive. They may also be able to offer you tips on what not to do, based on their experiences with other clients. Doing the proper research can ensure you find a legitimate hard money lender and lead you to real estate investing success. Our direct hard money business is proud to do all we can to ensure the success of our borrowers. Asset Based Lending, LLC (ABL) is a private hard money lender that has been featured in the Scotsman Guide and Inc. magazine. Their mission is to help real estate investors to quickly and efficiently finance their business activities. They have funded over 3,000 loans for $650 million worth of volume for residential and mixed-use investment properties. Click here to find out more: https://www.abl1.net/
Atlas-Victoria_Kennedy-small-199x300

Victoria Kennedy [email protected] atmanrealestate.com

Nominated as a 2020 Brand Ambassador for Inman, Victoria Kennedy is a well-respected authority in Real Estate marketing and branding. She is the CEO of Atman Real Estate, a marketing & branding agency that is committed to helping top producing Real Estate professionals become the #1 Agents in their area. She is a highly in demand speaker on all things digital marketing, and has helped many clients boost their visibility and revenue. Because of her expertise in real estate, she has been a trusted speaker and contributor to such organizations as the National Association of Real Estate Brokers, Inman News, and Yahoo Finance. In addition to running a successful marketing agency, she also has given talks, workshops, and has worked as a trusted consultant for Realties, Title Companies, Investors, and top producing agents. She has been featured in over 175 publications and podcasts both nationally and internationally. In addition to her marketing expertise, Victoria is a #1 selling classical-crossover singer and has sung with the likes of Andrea Bocelli, as well as toured all over Europe with her music. She is excited to share with you the power of her Closing Maximization Method and how it can exponentially grow your business. Find out more here: atmanrealestate.com

Why the Most Important Partner in Your Real Estate Career Should Be Your Lender

/in , /by

By Victoria Kennedy

As a real estate agent, you are only as good as the team that surrounds you. Whether it’s your attorney, broker, or title agent, one needs an entire group of experts right at their fingertips. However, if you are not already working with a private money lender, then you are missing out on a chance to greatly expand your client base to include real estate investors. By having a connection to a direct hard money lender that funds real estate investments, you can tap into an active market of home buyers and grow your real estate business further.

A dynamic real estate agent and private lender partnership provides a constant source of new business and referrals. It is a long line of endless possibilities for expanding both your careers.
hand-895588_1280

Image by Gerd Altmann from Pixabay

Another advantage to a strong partnership is the marketing support. Finding a lending partner who is willing to connect on marketing saves both time and money while expanding your reach. Mention your lender in your email campaigns, social media marketing and direct mail, and ask your partner to do the same. By co-branding, it provides an opportunity to streamline your marketing efforts. Once clients are secured, your combined knowledge can be harnessed to best serve your clients’ needs and deliver a five-star experience. You might be surprised to find that the best lending partner might not necessarily be the lender with the most experience or even the lowest rates. It might be the lender who shares the same core values and business goals. What exactly should you look for in a mortgage lending partner?

Trust.

Trust is one of the most important assets of your business. It begins with you, but extends to everyone you interact with, including your clients and lending partner. When we founded Asset Based Lending, we did so with a foundation of trust in our founding partners. As our company grew across 10 states and began funding more than 3,000 loans and $640 million worth of volume for residential and mixed-use commercial properties, it became more important than ever that we not only trusted each other but the experts we brought in to help our clients.
Business can only flourish when your clients have trust in you and the service you provide, so finding a hard money lender with a proven track record of trust and transparency is a must.

Communication.

Building a relationship, as well as maintaining that relationship, is done through open and honest communication. You need to find a lender who calls you back and returns emails quickly. Think about your needs when you are searching for the right partner. Do you work a lot of weekends and need someone who is willing to pre-approve clients on a Saturday or Sunday?
communication-1809935_1280

Image by Katarzyna Tyl from Pixabay

Your clients also will feel more at ease with someone who is candid about the process and where they stand each step of the way. A hard money lender should be able to communicate with your clients about their loan requirements and needs. Agents and clients almost always come across a problem in a transaction, but expert communicators can mitigate any problems or fears to make for a smooth process. One thing we have learned during our years of business is no real estate loan is the same. Every single loan is different. You and your private lender must be able to listen to the client’s needs, understanding each of their stories to come up with a flexible solution.

Diversity.

There are several real estate loan options available, but not all lenders offer the type your clients might need. You need a hard money lender who offers the types of loans that match your client base.
They must be able to handle different and difficult loans to get your clients to the closing table. The type of lender who makes a good partner is willing to go above and beyond and has the resources to do so. Your clients will appreciate loan underwriting that matches their unique project and delivers financing quickly and efficiently.

Locality.

It can be very beneficial to partner with a local hard money lender. Not all real estate markets are the same and finding a lender who specializes in the local real estate that your client wants to invest in will pay dividends in the end. You want a private lender who knows the market because they differ drastically. For example, New York City has its own unique market regulations and requirements that private lenders need to be aware of to finalize a successful loan. Finding the right hard money lender is vital to the success of your career and properly serving your clients. You need to know your clients are in good hands with your lending partner for successful transactions and happy customers.
image001
Asset Based Lending, LLC (ABL) is a private commercial lender that has been featured in the Scotsman Guide, Inc. magazine, Yahoo Finance, NBC and FOX among other publications. Their mission is to help real estate investors, quickly and efficiently, finance their business activities. They have funded over 3,000 loans for $650 million worth of volume for residential and mixed-use commercial properties. Click here to find out more: https://www.abl1.net.
Atlas-Victoria_Kennedy-small-199x300

Victoria Kennedy [email protected] atmanrealestate.com

Nominated as a 2020 Brand Ambassador for Inman, Victoria Kennedy is a well-respected authority in Real Estate marketing and branding. She is the CEO of Atman Real Estate, a marketing & branding agency that is committed to helping top producing Real Estate professionals become the #1 Agents in their area. She is a highly in demand speaker on all things digital marketing, and has helped many clients boost their visibility and revenue. Because of her expertise in real estate, she has been a trusted speaker and contributor to such organizations as the National Association of Real Estate Brokers, Inman News, and Yahoo Finance. In addition to running a successful marketing agency, she also has given talks, workshops, and has worked as a trusted consultant for Realties, Title Companies, Investors, and top producing agents. She has been featured in over 175 publications and podcasts both nationally and internationally. In addition to her marketing expertise, Victoria is a #1 selling classical-crossover singer and has sung with the likes of Andrea Bocelli, as well as toured all over Europe with her music. She is excited to share with you the power of her Closing Maximization Method and how it can exponentially grow your business. Find out more here: atmanrealestate.com

3 Ways Mortgage Loan Officers Can Grow Leads Without Spending Money on Ads

/in , , /by

By Luke Shankula

The coronavirus pandemic has affected virtually every aspect of our daily lives, from schooling to socializing to business. Since lockdowns commenced nearly a year ago, I’ve had mortgage loan officers, long accustomed to building relationships and generating leads through in-person networking, asking me how they can generate new business.

Sure, spending money on advertising is one strategy. But in a brave new world where people are spending huge amounts of time online, my advice to loan officers is this: go social like you mean it. These are my top three ways that loan officers can grow leads organically—that is, without spending a dime.
  • Be strategic with social media engagement.
  • Create quality content that people want to consume.
  • Present yourself in a genuine manner—i.e., be the “real you.”

Choose your platforms strategically

social-media-488886_1280

Image by nominalize from Pixabay

Unless you’ve got a monstrous amount of time to devote to social media or the budget to pay someone else to do it for you, it’s difficult to have a huge presence across several different platforms. Instead, I tell my clients to choose one, two, maybe three social media platforms, and get really good at using those. This comes down to researching which audiences you’ll reach on different platforms and honing in on those that can be the most fruitful. Here are just two examples of how I tell clients to use the many platforms out there:
  • LinkedIn: While LinkedIn isn’t exclusively a B2B platform, it is the place where you’re more likely to network with referral partners, such as real estate agents and other loan officers. It’s a great place for work-related content, but posting links to shared content will actually reduce your engagement here, since LinkedIn (and Facebook) wants to keep people in the site. Instead, create short, original posts that talk about your business. This doesn’t have to be “hard sell” stuff. Try posting video or screenshot testimonials from happy clients, or you celebrating closing a loan in record time. This is called “social proof”—it’s what establishes you as a leader in your field and attracts potential colleagues and referral partners. Also, be sure to congratulate colleagues who post about promotions or job change. But go beyond a simple “Well done!” with substantive, sincere praise. “Congratulations Jan! I’ve been following your career since we worked together at ___, and it’s no surprise you’ve been so successful.”
  • Facebook: If LinkedIn is your office, Facebook is your living room. Use your personal Facebook page—yep, that’s right; your personal page, as it’s amazingly difficult to generate organic traffic on a business page—to share your original content on mortgage news, career wins and challenges. Intersperse these with normal Facebook stuff, whether it’s family photos or funny animal videos. When you sprinkle in the work-related posts, always think about engagement: “The Fed is threatening to raise interest rates again: do you think it’s too soon for another rate hike?” Make your non-personal posts public so that they can be shared with anyone. Accept friend requests that don’t seem sketchy or stalkerish. And engage, engage, engage.

Create quality content

control-3312776_1280

Image by Gerd Altmann from Pixabay

I say it all the time and I’ll never stop saying it. When it comes to growing organic leads, it’s about quality, not quantity. Posting 60 pieces of shared content a day, regardless of the platform, is going to turn people off and make them reach for the dreaded “mute” button—and it might also get you flagged as a spammer. Instead, post original, quality, shareable content that people can use. Here are just a few ideas:
  • A short video (60-120 seconds is ideal) of you explaining how the mortgage pre-approval process works, or telling folks how they can improve their credit score
  • An attractive infographic showing the steps from loan application to closing
Remember, most first-time buyers—and a lot of second- or third-time buyers—have no clue how this stuff works. By creating content that explains the process, you establish yourself as an expert. Just don’t forget to add links to your email address and business website!

Just do you

leadership-3648338_1280

Image by mohamed Hassan from Pixabay

They say that all business is personal, and that’s truer now than ever before. There might have been a time when prospective loan applicants could choose from just a handful of loan officers. Now, there are more than 300,000 loan officers in the US, most of them reachable with the click of a mouse. So how do you stand out in a crowded field? Just by being you—and social media is the place to do it.
  • Be genuine. Share your kid’s stellar report card and your spouse’s new promotion just as readily as you do mortgage industry news. You’re a lot more than just your job, and your clients want to know that.
  • Engage actively, but naturally. Make a concerted effort to share and comment more on social, but don’t fake it. If you’re interested in a topic, try to generate lively discussion around it. If you’re happy for a friend or colleague’s positive news—express it!
  • I tell my colleagues to be themselves online and in-person, with one caveat: stay as apolitical as possible. Mortgage loans aren’t red or blue!
Building a social media presence that generates organic leads won’t happen overnight. It takes months, if not years, to create and curate quality content, build your followings and raise your profile. But when it all starts to click, it’s some of the most rewarding business you can land—and not just because it’s free. For loan officers, marketing and lead generation through social media enables you to really create a trusted brand. And the satisfaction of knowing you did it yourself, using your own initiative, creativity, and industry knowledge? That’s priceless.

Behind the Scenes: What it Means to Service a Loan

/in , /by

Image by Mediamodifier from Pixabay

Here at Ignite Funding we offer passive real estate investments that earn investors a 10%-12% annualized fixed income. All you have to do is choose an investment, fill-out some paperwork and send in your funds. Now you can sit back and enjoy your returns, but for Ignite Funding, the work carries on. Today we are giving you a behind the scenes look with Pat Vassar, Director of Underwriting, to see some of what Ignite Funding does in its daily operations to keep these investments passive for its investors.

For construction/development loans, do you visit the properties to see the borrowers progress in-person? How often?

scaffold-1207389_1280

Image by Russell Holden from Pixabay

Carrie Cook (Ignite Funding’s President) and I visit each property on average once every four months. In a given year, we can service up to 100 projects, visiting each of those about four times (depends on the length of the loan) averages out to about 350 total site visits per year. At each site we are looking to make sure that the money is being used to enhance the value of the property, whether it’s for horizontal development, vertical construction, or both. We recently started sharing some of our videos* of these site visits with investors so they can see their funds in action and the value of their collateral increasing over time.

For acquisition projects and projects that do not involve physical/tangible changes to the property, how do you track that progress?

Just because you can’t physically see it, entitlement work and zoning permits add a tremendous amount of value to a property because they can sometimes take more time and effort than the actual development/construction of the project. We ask for updates on when the city or county planning commissions are scheduled, follow-up to see if plans were approved, and if so, what were the conditions. Usually when something is approved it is not unanimous. 99.9% of the time there are conditions, such as you have to add an offsite improvement like a traffic light or stop sign to a major intersection. We want to see what those conditions are because if they are onerous and cost a lot of money, it will devalue the site and we will need to pay attention to the viability of it in the future. With Ignite Funding’s strong development background, we can often help our borrowers troubleshoot these conditions to get the project back on good ground.
success-2917048_1280

Image by Gerd Altmann from Pixabay

Are you keeping track of the borrower’s financials even after their loans have been funded?

We receive quarterly financial updates from the borrower on both the special purpose LLCs that own the properties and the parent companies that run those LLCs. The funds provided for the projects flow in-and-out between both entities. Therefore, we keep close tabs on these reports to see if there is any instability happening internally with the borrower. If the borrower is working on a subdivision (property where they are selling multiple lots or homes), we also receive weekly reports on sales velocities to see how fast they are getting them under contract and ultimately closing. With this information we look to see how that corresponds with the underwriting we did before we originated the loan to see if we were on target and, more importantly, if the borrower is on target with their sales and traffic count predictions. We receive the borrower’s annual financial audits as well.

How often are you in communication with the borrowers?

contact-us-4193401_1280

Image by Tumisu from Pixabay

Every day, whether it is on current or upcoming projects we are always in communication with the borrowers. We also visit each borrower’s parent company once a year. This is important because then we can see if they are adding staff or cutting back, and if it’s the same faces as before or if they have cleaned house. What’s observed at the in-person visits and in the annual financial audits are more indicative of the overall health of the company. With quarterly financials it is very easy for people to move money around to make it look like everything is great or status quo. This blog barely scratches the surface of everything Ignite Funding does for its investors and how it provides solid Trust Deed investment opportunities. For more information about Trust Deed investments or if you wish to schedule a FREE consultation with an Investment Representative, please click here.

Ignite Funding, LLC | 2140 E. Pebble Road, Suite 160, Las Vegas, NV 89123 | P 702.739.9053 | T 877.739.9094 | F 702.922.6700 | NVMBL #311 | AZ CMB-0932150 | Money invested through a mortgage broker is not guaranteed to earn any interest and is not insured. Prior to investing, investors must be provided applicable disclosure documents.

Would you like to join our Broker Network?

/in , /by

UCC Broker Network

Join our Broker Network:

We got you covered! We’re here for you from start to finish. Real Estate financing is available nationwide! Join our network today and start closing on all your deals.

Universal Commercial Capital
☎️ 888-334-9039
[email protected]
www.universalcommercialcapital.com

SEND EMAIL NOW

How Deferment of Mortgage Payments May Affect Borrowers in the Long Run

/in , , , /by

By Edward Brown

When Congress passed Section 4021 of the CARES Act in response to the effects of COVID-19, their intent was to help borrowers who were having problems making their mortgage payments. Little did Congress realize that they were potentially setting up borrowers for trouble in the future when it comes to credit worthiness as assessed by the lending community.

hammer-1537123_1280

According to Mark Hanf, president of Pacific Private Money, “Section 4021 of the CARES Act contained a regulation that loan servicers “shall report the credit obligation or account for those participating in forbearance as current”. In other words, those participating in a forbearance program should not see their credit scores drop. However, there is a loophole that allows lenders to discover whether or not a borrower is actually making payments. It is the “comments” section of a credit report. The CARES Act does not mention the comments section of credit reports, and that’s where forbearance notations are going.” What borrowers are not being told is that any reference in a credit report to forbearance can be a Scarlet Letter for an applicant seeking a new mortgage, according to Kathleen Howley in an article she wrote in early May 2020.

According to Hanf, within a week of Howley’s article, his company received a loan request from a home buyer who was denied credit from a major bank for just this very situation. Although the bank sees the existing mortgage as “current” the forbearance has let the world know via the comment section that this borrower has requested a deferment. The major bank involved would most likely not deny the loan on its face due to the deferment, as this would violate the law; however, banks are notorious for coming up with a myriad of reasons for denying a loan and still stay within the guidelines set out for them.

crop-businesswoman-counting-money-while-sitting-at-desk-4475525 small

Conventional lenders desire to have plain vanilla borrowers who pay back loans in a timely manner. When a borrower changes terms of the loan by requesting principal forgiveness or other aspects of the loan, the lenders generally do not usually extend credit again to these borrowers and can negatively affect the borrower’s ability to borrow again from unrelated lenders. Such is the case back during the Great Recession wherein some borrowers took advantage of the economic climate by asking their lender to reduce the principal of their loan [total forgiveness rather than just a deferment]. The borrowers may have gotten a reprieve, but the long-term effects may have been more drastic. Similarly, to when a borrower files bankruptcy. The borrower may get out of paying creditors, but their ability to borrow in the future is usually severely hampered.

In one case, back in 2009, during the heart of the Great Recession, one banker tells a story of how a wealthy borrower first asked for a principal loan reduction of $500,000 because his collateralized real estate had decreased and his request was granted. But, when this borrower was faced with the prospects of having this reduction reported on his credit report or the fact that he would have to inform any new lender that he requested a principal reduction [as this question is usually on bank applications], he voluntarily requested that the $500,000 abatement be reinstated. He decided his ability to borrow in the future was worth more than the $500,000 principal reduction.

Borrowers will have to decide if requesting deferments is worth the risk of potential future lending restrictions based upon the lender desire to lend to borrowers who choose to defer mortgage payments when the opportunity arises. Whoever said, “there’s no free lunch” must have been talking about these very situations.

edward-photo-from-2006-2-200x300

Edward Brown

Edward Brown currently hosts two radio shows, The Best of Investing and Sports Econ 101. He is also in the Investor Relations department for Pacific Private Money, a private real estate lending company. Edward has published many articles in various financial magazines as well as been an expert on CNN, in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns.

4 Reasons You Should Always Repay Your Loans

/in , /by

By Gabby Darroch

If you’ve been with me for a while, you know you are not required to repay your policy loans. And if you’ve ever wondered, “If I don’t have to repay my loans, why should I?” let’s set the record straight.

The Caveat

In the initial stages of using your policy it’s important to note that we don’t recommend repaying your loan payments back into your actual policy. Instead, we encourage you to put those payments in a totally separate checking account. This is simply because why pay back money you’re just going to use again and again for things like paying off debt, financing a car, or buying a house. And a checking account is a bit easier to access than the money in your policy.

There may come a time in your life where most of your immediate financial needs are met (ie. debts are paid off). It is at this point that we encourage you to put all money stored in that separate checking account back into your policy to repay your outstanding loan balance. And here’s why:

Repaying your loan to your policy means:

growth-3078543_1280

  1. You’re rebuilding your available cash. You have a cash account for the purpose of financing your needs in life at any moment. But when you Repay your loan to get more moneytake loans from your policy, you deplete the amount you can take on a loan. So by rebuilding the cash value in your account, you’re allowing your future financial needs to be met with a loan later on. This keeps your money in motion and working hard for you.
  2. You’re replenishing your death benefit to the full amount. Remember, when you take a loan, your death benefit covers all your existing unpaid loan amounts and whatever is left goes to your beneficiary after you “graduate.” Repaying your loan means that you are replenishing the full amount of your death benefit that will be paid to your beneficiary.
  3. You will restore your full dividend earning potential (if your contract is with a direct company). Direct companies don’t always give you the full dividend depending on your outstanding loan balance. When you repay your loan, you’re able to collect the full dividend amount that is owed to you.
  4. You reduce the charge on your interest payment. If you recall, when you take a loan you are actually being loaned the insurance company’s money. They charge an interest rate of about 5% for this privilege. So paying back your loans to the insurance company will result in a lowering of your interest rate on subsequent loans. This frees up more money for you. (To learn more about the interest you are charged on your policy loans, check out this article.)

The Gist of It

bills-2557263_1280

So yes, you don’t have to repay your loans. But it benefits you most to do so, if done at the right time in your life. Just remember, you do always want to pay the interest on that loan back to the insurance company. That is required.

To learn more or get started, please visit www.TheMoneyMultiplier.com. Scroll to the very bottom and click on “Member Area.” Enter the password “bankwithbrent” and watch the presentation that appears on the next page.

When you’re ready to get started on creating your financial legacy or if you have more questions, please email us at [email protected] . Or you can give us a call at 386-456-9335, and one of our mentors will be in touch with you.

VA and FHA Mortgages & the Housing Boom (Part 2)

/in , , , /by

Military Experience Eligibility for VA Loans

How does a retired or active military personnel member qualify for a VA loan based upon their military experience?

table

* An earlier discharge date for a service-connected disability may still qualify you.
** Officers who separated from service after 10/16/81 may be eligible.

For more details, please visit The U.S. Department of Veteran Affairs’ website to learn about VA mortgage loan eligibility benefits:
https://www.va.gov/housing-assistance/home-loans/eligibility/

Once an active or retired military person meets the minimum qualifying guidelines, he or she will be given a Certificate of Eligibility that’s issued by the Department of Veteran Affairs. The VA mortgage loan applicant will then send a copy of the VA Certificate of Eligibility (VA Form 26-1880) to their mortgage broker or banker. For VA loan applicants who do not have a copy, they may complete a form entitled Request for a Certificate of Eligibility (Fillable) that’s linked here:
https://www.vba.va.gov/pubs/forms/VBA-26-1880-ARE.pdf

The Evolution of VA and FHA Loans

veterans-day-4653841_1280Near the end of World War II, the VA home loan program was created in 1944 as part of the original Servicemen’s Readjustment Act that’s also referred to as the GI Bill of Rights. The VA loan benefits were signed into law by President Franklin D. Roosevelt. A portion of each funded VA mortgage loan was guaranteed by the federal government in the event that the VA borrower later defaulted on the loan and lost the home in foreclosure. This way, each bank that funded the 100% loan for qualifying VA borrowers had much less financial risk.

Specifically, there were two types of government-backed or insured mortgage loans that stimulated the housing market and helped the U.S. economy prosper and rise up out of the previous negative Great Depression (1929 – 1939) years – VA and FHA (Federal Housing Administration) loans. These more flexible residential mortgage loans were part of President Roosevelt’s New Deal plan and the National Housing Act of 1934 that were designed to create more jobs and boost home values and the economy once again.

Since 1934, FHA has insured over 34 million home mortgages nationwide. As per the U.S. Department of Housing and Urban Development (HUD), FHA has active insurance on over 8 million single-family mortgages. In total for both residential and commercial real estate properties, FHA’s insurance portfolio exceeds $1.3 trillion.

To learn more about the Federal Housing Administration (FHA), please visit HUD’s website:
https://www.hud.gov/program_offices/housing/fhahistory#:~:text=Congress%20created%20the%20Federal%20Housing,workers%20had%20lost%20their%20jobs.

VA and FHA Loans for Buyers, Sellers, and Owners

calculator-723925_1280The main difference between FHA and VA is that the government insures a portion of the FHA loan while guaranteeing a portion of a funded VA loan. The vast majority of home loans funded nationwide over the past 10 years, directly or indirectly, were either government-backed (VA) or insured (FHA) and/or purchased in the secondary markets by other government-sponsored or federal entities named Fannie Mae, Freddie Mac, or Ginnie Mae.

FHA loans allow borrowers to qualify with 3.5% down on average (96.5% LTV) with lower FICO credit score options near 580 and easier overall underwriting allowances. FHA also allows seller credits and gifts from family members toward down payments that can effectively make a purchase loan become near 100% LTV also. However, borrowers will have to pay an additional monthly insurance premium along with their mortgage payment that can reach a few hundred dollars per month, depending upon the borrower’s FICO credit score, loan amount, debt-to-income (DTI) ratios, and LTV (loan-to-value). There are more flexible FHA Streamline refinance programs available as well that are similar to the VA Streamline.

For qualified VA borrowers, there is perhaps no better mortgage loan option available while FHA loans might be the second best option for high LTV loans. This is especially true as 30-year fixed mortgage rates continue to hover at or near all-time record lows while making many mortgage payments more affordable than rent even when the home is financed up to 100% of the purchase price.

To date, VA and FHA have guaranteed or insured over 58 million mortgages for homeowners. Home sellers should welcome any VA or FHA buyer prospect who has a pre-approval letter from a mortgage lender. This is because the lender is prepared to provide up to 96.5% LTV for FHA or up to 100% LTV for a VA loan. Amazingly, both FHA and VA loans can close in a few weeks or less due to expedited online application processing options.

 

Rick-Tobin-Professional-Pic-sharperRick Tobin

Rick Tobin has a diversified background in both the real estate and securities fields for the past 30+ years. He has held seven (7) different real estate and securities brokerage licenses to date, and is a graduate of the University of Southern California. Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), equity funds, and foreign money sources. You can visit Rick Tobin at RealLoans.com for more details.