Yes, You Can Buy Foreclosures With Lousy Credit
Posted by: real estate / Category: ForeclosuresMy personal favorite place to get cash for real estate deals is a through a hard money lender. For those of you who don’t know what a hard money lender is, let me explain. Pay close attention to details, because there are only a few sources for hard money loans available today.
A hard money real estate lender is a certain type of lender that loans on the future equity of the house after repaired value. Unlike conventional lenders, these lenders don’t care about what the house is worth at the present time. They don’t even want to know; all they care about is what the house is going to be worth after it is fixed up and ready to sell.
Take a look at some important facts on how hard moneylenders work:
1. They loan on future equity, not what the house is worth.
2. They can close in as little as two weeks.
3. You will not go through nearly as much red tape than if you went through a conventional lender.
4. They give you the money to fix it up in a draw-type system. (If you don’t know what that is, just follow the example below; it will explain everything to you.)
5. Hard money loans are short-term loans; generally 3-6 months.
6. They generally loan as much as 65% of after repaired value. For example, if you found a house for sale for $20,000 in as-is condition and it would be worth $60,000 after repairs, the hard money lender would loan you as much as $39,000, which would leave you with almost twenty thousand dollars to hire someone you’ve found to help bring the house into a livable condition.
7. Hard moneylenders usually do not require a down payment. You heard me right-no money down. A conventional lender almost always requires at least 20% down with good credit for an investor property. However, depending on how bad your credit is, you may have to pay a small fee, but some hard moneylenders can even finance that fee directly into your loan; you just need to ask them about that.
8. And last but definitely not least-they will give you money even if you have bad credit, no pay stubs or no tax returns. This really opens doors for most entrepreneurs. Let’s face it-all of us who’ve ventured out on our own to start our own businesses probably have some bad credit from past bad opportunities, and some pretty pitiful tax returns that a conventional lender would laugh at. So these hard money loans are a second chance for us to make some serious money in real estate. By the way, I can get a conventional mortgage now anyway, but I personally still use hard money loans because what they offer surpasses any conventional loan program I’ve ever heard of.
Find the deals, get approved and make some huge paychecks.
Gary Mitchell,
http://www.homeforeclosureincome.com
Gary_D._Mitchell
Last 5 posts in Foreclosures
- Essentials of a Short Sale Package - June 21st, 2009
- Repossessions Jump by More Than Half - June 21st, 2009
- Stop Making Mortgage Payments & Stay in Your House - June 21st, 2009
- Find Bargain Mobile Home Foreclosure Deals - June 21st, 2009
- Reasons Bank Repos Are the Best Buy - June 21st, 2009
When you are putting together a short sale package, here are the essential pieces to the package:?/p>
- Authorization to Release - This gives the lender permission from the borrower to talk to you.
- Hardship Letter - This is a letter from the borrower to the lender briefly explaining their situation.?Preferably, this is legibly handwritten.?It should only be 5-7 paragraphs and should be written as if the borrower is asking a friend for a favor.?Loss Mitigators are people and ‘dumping on’ them is not a good method to get their approval of your settlement package.
- Financial Statement -
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Tags: Foreclosure, mortgage