Your Best Options in Financing Bank Foreclosed Homes

Financing is an important aspect in foreclosure investing. When looking to finance your foreclosure purchase, it is best if you know the different options available to you as a buyer. There are a number of ways in which you can finance bank foreclosed homes and you should be able to determine which of these is the most appropriate scheme for you. Knowing your options should eliminate for you any impediment that could thwart your efforts.

Secured Mortgage

If you have any stocks and property, you could use them as collateral to secure your loan. Banks are more confident to approve secured loans since the borrower usually puts up a property or interest to ensure that banks may recover in case he defaults.

If you have a property that has been sitting there for a while, then you can use that to finance your purchase. However, you should be aware that your collaterals should be directly proportionate to the amount of your loan. Hence, you should be able to produce a large enough security if you want to obtain a large secure loan.

Unsecured Loans

If you do not have any property or capital to part with or if your security is insufficient to cover the amount of loan that you need, you can always turn to unsecured loans. But this type of financing means that the bank will have to assess your credit history, income level, financial interests and other financial data that could help them evaluate your credit worthiness to purchase bank foreclosed homes.

Because this type of loan is unsecured, the lender is generally more stringent in their requirements and processes. In order to ensure that you will be approved, your documents should show that you are capable of repaying the loan within the required period of time. Sometimes, the applicable interest rates will vary according to your credit score. Fortunately, you can eventually try to convert an unsecured loan to a standard mortgage.

Borrow From Relatives

Sometimes, when everything else fails and you have nowhere else to go, your family can provide you with the easiest and fastest solution. Borrowing from family and relatives can be your smartest option since the only requirement for approval is trust. If you have a relative or a family member who is more than willing to help you out in financing your home, you might want to seriously consider accepting that loan offer rather than go through a standard financing scheme. A family loan is always favorable to the borrower since it is rare that family members would charge a high interest rate for one of their own.

However, this option is without difficulties. There are times when family ties are strained and in some cases, severed, when members cross the boundaries of long-held family values and step on the threshold of deceit and betrayal. The most important thing to remember when loaning from family in order to finance bank foreclosed homes is to always keep that high level of confidence and trust that they have given you.

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The Many Advantages of Accounts Receivable Financing

There are many accounts receivable financing advantages. Businesses the need capital will be hard pressed to find a much better or faster option. Such financing is not dependent upon a businesses’ credit or the length of time that they have been in business. As long as a company has clients with good credit and outstanding invoices, then accounts receivable financing is a viable commercial financing option. Below, we will go into a little more detail about only a few of the many advantages of generating capital in this manner.

Fast money

Accounts receivables financing is a really great way to get money fast. Most factors are able to provide payment for invoices in about 24 hours. This process may initially take more time. However, after a business has established a relationship with a factor, the process goes really quickly. Unless a company has an open line of credit, it is difficult to think of a faster way to raise commercial capital. Even in cases where a line of credit is utilized a company is forced to pay interest which can be extremely expensive. There are no such costs associated with receivables financing.

Easy money

Accounts receivables financing is easy money. When a business desires to get a bank loan, they must be willing to jump through hoops. They will need to have all of their financial documentation in order. For a small business, this might require an unpleasant trip to the accountant. They then must also be ready to answer any questions a bank has. If they are unable to satisfactorily do so, then they won’t qualify for the loan. Also, many banks won’t loan money to new businesses, these are often the companies that need it most.

Today, it is even more difficult then in the past to receive bank financing. Banks simply aren’t willing to part with their money right now. They are turning down loan applications from businesses with good credit and that have been in business for a long time. Commercial financing has become more difficult then ever to secure, though not in every sense. Accounts receivables financing is a pretty easy way to get money. As long as a business has outstanding invoices owned by clients with good credit, they may be able to qualify for monies.

A business credit score doesn’t matter

If a business has any chance of receiving a bank loan, they must have a good credit score. In this day and age, they just might need an excellent credit history with no blemishes. Fortunately, businesses that utilize accounts receivables financing don’t have to worry about this. A factoring company is more concerned about the credit history of the invoiced clients then the company that owns those invoices because that is who they will be collecting their money from.

Accounts receivables financing has many advantages over traditional capital financing options. Generating capital in this manner is fast, easy, doesn’t require that a company has been in business long, nor do they need to have good credit.

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Overview of Switzerland Finance & Banking Jobs

In the first Quarter of 2010, the number of jobs available in the Swiss financial sector was around a total of 3,508 jobs. This is an increase of 19 percent over the same quarter in 2009. From the latest report by Finance & Operational Recruitment (FOR) the number of job vacancies in the Swiss financial sector has increased since the summer of 2009 by 35 percent.

Based upon a total of 1,400 banks, insurance companies, accountants and other consultants currently there are 3’508 finance jobs are advertised. That is 35 percent more than in June 2009.

Across the banking sector banks in Switzerland had a total of 1,457 jobs at the end of March 2010. This is 110 percent more than in June 2009.

In Insurance we have seen a slight decline. Across the insurance industry, including health insurance, in the summer of 2009 there was 1,086 open insurance jobs. At the end of March 2010 this had declined to 1,016. This represents a decline of -6.4 percent.

Across the other financial sectors & support industries (Accounting, consulting, IT, etc.) jobs have increased from 819 to 1,035 (+26.4 percent).

The main reasons for this development, is the banks are replacing staff originally cut when they had to reduce costs – during the previous 2 years. For many insurance companies, cost cutting is ongoing. In addition, increased regulatory pressure meant additional experts were necessary.

The report used an index which shows the evolution of online Switzerland job vacancies in the financial sector in Switzerland and Liechtenstein. The index is produced every three months by the Swiss financial portal finews.ch with data of the portal JobDirectory.ch.

Switzerland Banking Jobs in focus:

Most banking jobs were offered in late March 2010, Credit Suisse, with 395 jobs, followed by UBS with 336. While at Credit Suisse, the demand last year grew more constant and rose sharply from 2010, at UBS as early as October 2009, there was a significant increase which lasted up to February 2010.

Foreign banks are recruiting

Coupled with this the Foreign Banks in Switzerland are recruiting for banking jobs. This increase reflects recruitment having a high turnover, but also the fact that many institutions consider the adjustment in the private banking as an opportunity to recruit good people.

Swiss Banking looking to the customer:

Almost two-thirds of all vacant banking jobs in Switzerland are for specialists and executives. Only ten percent of the jobs are for employees on the level of clerk or assistant.

The greatest demand for workers is at the customer front. The most common available banking job is for Account Managers in the retail and SME business, followed by Investment advisers in the so-called affluent area (average retail segment).

In relative terms, the number of classical Private Banker -which to serve wealthy clients has grown the most. Since summer 2009, the number of private banking jobs presented has increased from 19 to 45, representing an increase of 140 percent.

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Creative Financing – Mortgage Notes and Other Tools

PROBLEM

Since early 2006 to the present our financial system in this country has been in disarray and significantly crippled. Hundreds of banks have already failed and been closed; hundreds more have been forced into mergers (shotgun marriages) with stronger banks; hundreds more are operating as “zombie” institutions-they look like banks and they try to act like banks but they cannot make loans. Most of the “too big to fail” banks based in New York, California, or Atlanta appear to be operating normally, but the truth is they are not lending to the “little guy”. They are lending to the publicly traded corporation primarily. In plain English, getting a loan from a bank for the average borrower is next to impossible.

SOLUTIONS

– Don’t operate your business or don’t do the transaction
– Pay all cash-don’t borrow
– Borrower from non-banks-friends, family and private lenders
– Do transactions using non-traditional methods-creative financing

JUST WHAT IS “CREATIVE FINANCING?

Creative real estate financing is an all-inclusive term. It essentially means arranging a transaction whereby any and all types of financing is considered to do the deal. Most or all of these types of financing happen to fall outside of the standard government mandated banking guidelines and restrictions. The financing vehicles considered do not conform to Fannie Mae, Freddie Mac, FHA, VA, or other HUD guidelines.

Examples of “creative” financing vehicles are: Private Party Financing, Seller Financing, Bank lending that does not comply with the HUD guidelines, Exchanging Equities, Lease with Option Financing, Contract for a Deed Financing, Equity Sharing Financing, Home Equity Financing, Credit Card Financing, and any combination of the above.

EXAMINING “CREATIVE FINANCING” TOOLS INDIVIDUALLY

Of all of the various types of creative financing tools mentioned above the most common and the most easily understood is private party mortgage financing, which includes seller financing.

The underlying concept is that the bank is not involved in the transaction and the private party lender takes the place of the bank. There are many advantages to removing the bank form the transaction. The main benefits are:

– Qualifying (accepting) the borrower is the decision of the private party
– Qualifying (accepting) the property is the decision of the private party
– The interest rate and the monthly payment is the decision of the private party
– The maturity date of the loan (balloon date) is the decision of the private party
– The down payment amount is the decision of the private party
– The time necessary to close the loan is much shorter
– A valuable, long-term stream of income is created
– The interest earned may be higher than any other available investment

All of these benefits, when combined, make private party mortgage financing a very powerful tool to cause a transaction to close that otherwise would have failed. And, additionally, they may offer investment benefits not elsewhere available.

THE OTHER SIDE OF THE COIN

Now, after examining the benefits of private party financing, we should, in fairness, look at the negative aspects. No tool is the perfect tool for all jobs, and no type of financing is the perfect type of financing for all transactions and for all people.

The negative aspects are summarized below:

– Emotionally, not everyone is comfortable waiting for monthly payments
– Emotionally, not everyone is comfortable with financial details
– Emotionally, not everyone is comfortable with a risk of loss
– Emotionally, not everyone is comfortable doing something new
– Practically, a lump-sum of cash may be needed now

MAKE IT A WIN-WIN TRANSACTION

It is very important to honestly and objectively evaluate each part of the financing transaction. The goal is to make it be a win-win transaction for both parties. Are the personalities of the borrower and the lender compatible? Has the note and mortgage been properly structured so that there is a high probability that the borrower can meet his obligations over the term of the loan? Has the lender anticipated accurately his future need for cash flow income and lump-sum income?

As with most important things, the devil is in the details!

In subsequent articles we will examine some of the other types of “creative financing”.

Lawrence Tepper specializes in:
PROMISSORY NOTE SERVICES, VALUATIONS AND BROKERING EXPERT WITNESS AND EXPERT CONSULTING SERVICES OFFERED

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Train For Finance and Banking Online

Every business and organization that earns a profit has to think about their financial and banking needs. These aspects of a business need qualified individuals who understand monetary funds and how to manage those funds in a bank. Online accredited colleges and universities offer training in finance and banking that teach students how to work for an organization in this capacity.

Professionals use their knowledge by making suggestions to a business to help them grow financially. The professional’s job is to aid their client in sound financial decisions in order to help them use their resources to obtain monetary goals. A professional who understands banking is a strong asset to a business because they keep track of fund activity by making sure it is recorded and handled properly. Prospective students can learn how to perform these main duties through numerous online programs. Students can choose to study finance and banking in a combination program or choose a degree program specifically geared towards one.

Students need to decide prior to enrolling in a degree program if they want to work for finance, banking, or both. This will help a student know if they need to find a combined degree program or find a specific degree program. A finance degree program will provide students with the knowledge to analyze and implement financial procedures in a managerial position. The minimum requirement for a career in the field is a bachelor degree. In a bachelor degree students can expect to complete the program in four years. Curriculum will include general education and degree specific education. The finance part of the program could include courses on risk management, corporate finance, statistical analysis, critical thinking, and more. Students will be able to understand the procedures and principles of financial markets and the distribution of funds in every sector of an organization.

A bachelor degree program in banking is a financial business degree with its focus on banking. The degree program prepares students to work in various careers inside a bank. Courses will center on teaching a student about the many areas of financial institutions. Specific courses may include corporate finance, banking law, international trade law, and global economy. Students will learn about all bank practices, credit, and lending. Career options will allow students to become credit analyzers, loan processing managers, and more. Gaining a degree in banking significantly increases an individual’s annual income within the industry.

A combined approach will prepare students by giving them a strong foundation in management, corporate finance, and the global market. Students will examine every area of the industry through courses that include investments, capital raising strategies, corporate operations, and mergers. A financial and managerial accounting course will teach students how to function as a manager and work with employees within the procedures of accounting. Students will explore topics like financial statements and cost analysis. A combined degree will allow students to work in all areas of both industries.

Whether a student decides on a specific or combined education approach, numerous career opportunities will be open to them. Online schooling in finance and banking will help students enter their desired career upon completion of an accredited program. Seek an online college or university today that offers the degree you need to start an exciting new career.

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Best in Class Finance Functions For Police Forces

Background

Police funding has risen by £4.8 billion and 77 per cent (39 per cent in real terms) since 1997. However the days where forces have enjoyed such levels of funding are over.

Chief Constables and senior management recognize that the annual cycle of looking for efficiencies year-on-year is not sustainable, and will not address the cash shortfall in years to come.
Facing slower funding growth and real cash deficits in their budgets, the Police Service must adopt innovative strategies which generate the productivity and efficiency gains needed to deliver high quality policing to the public.

The step-change in performance required to meet this challenge will only be achieved if the police service fully embraces effective resource management and makes efficient and productive use of its technology, partnerships and people.

The finance function has an essential role to play in addressing these challenges and supporting Forces’ objectives economically and efficiently.

Challenge

Police Forces tend to nurture a divisional and departmental culture rather than a corporate one, with individual procurement activities that do not exploit economies of scale. This is in part the result of over a decade of devolving functions from the center to the.divisions.

In order to reduce costs, improve efficiency and mitigate against the threat of “top down” mandatory, centrally-driven initiatives, Police Forces need to set up a corporate back office and induce behavioral change. This change must involve compliance with a corporate culture rather than a series of silos running through the organization.

Developing a Best in Class Finance Function

Traditionally finance functions within Police Forces have focused on transactional processing with only limited support for management information and business decision support. With a renewed focus on efficiencies, there is now a pressing need for finance departments to transform in order to add greater value to the force but with minimal costs.

1) Aligning to Force Strategy

As Police Forces need finance to function, it is imperative that finance and operations are closely aligned. This collaboration can be very powerful and help deliver significant improvements to a Force, but in order to achieve this model, there are many barriers to overcome. Finance Directors must look at whether their Force is ready for this collaboration, but more importantly, they must consider whether the Force itself can survive without it.

Finance requires a clear vision that centers around its role as a balanced business partner. However to achieve this vision a huge effort is required from the bottom up to understand the significant complexity in underlying systems and processes and to devise a way forward that can work for that particular organization.

The success of any change management program is dependent on its execution. Change is difficult and costly to execute correctly, and often, Police Forces lack the relevant experience to achieve such change. Although finance directors are required to hold appropriate professional qualifications (as opposed to being former police officers as was the case a few years ago) many have progressed within the Public Sector with limited opportunities for learning from and interaction with best in class methodologies. In addition cultural issues around self-preservation can present barriers to change.

Whilst it is relatively easy to get the message of finance transformation across, securing commitment to embark on bold change can be tough. Business cases often lack the quality required to drive through change and even where they are of exceptional quality senior police officers often lack the commercial awareness to trust them.

2) Supporting Force Decisions

Many Finance Directors are keen to develop their finance functions. The challenge they face is convincing the rest of the Force that the finance function can add value – by devoting more time and effort to financial analysis and providing senior management with the tools to understand the financial implications of major strategic decisions.

Maintaining Financial Controls and Managing Risk

Sarbanes Oxley, International Financial Reporting Standards (IFRS), Basel II and Individual Capital Assessments (ICA) have all put financial controls and reporting under the spotlight in the private sector. This in turn is increasing the spotlight on financial controls in the public sector.

A ‘Best in Class’ Police Force finance function will not just have the minimum controls to meet the regulatory requirements but will evaluate how the legislation and regulations that the finance function are required to comply with, can be leveraged to provide value to the organization. Providing strategic information that will enable the force to meet its objectives is a key task for a leading finance function.

3) Value to the Force

The drive for development over the last decade or so, has moved decision making to the Divisions and has led to an increase in costs in the finance function. Through utilizing a number of initiatives in a program of transformation, a Force can leverage up to 40% of savings on the cost of finance together with improving the responsiveness of finance teams and the quality of financial information. These initiatives include:

Centralization

By centralizing the finance function, a Police Force can create centers of excellence where industry best practice can be developed and shared. This will not only re-empower the department, creating greater independence and objectivity in assessing projects and performance, but also lead to more consistent management information and a higher degree of control. A Police Force can also develop a business partner group to act as strategic liaisons to departments and divisions. The business partners would, for example, advise on how the departmental and divisional commanders can meet the budget in future months instead of merely advising that the budget has been missed for the previous month.

With the mundane number crunching being performed in a shared service center, finance professionals will find they now have time to act as business partners to divisions and departments and focus on the strategic issues.

The cultural impact on the departments and divisional commanders should not be underestimated. Commanders will be concerned that:

o Their budgets will be centralized
o Workloads would increase
o There will be limited access to finance individuals
o There will not be on site support

However, if the centralized shared service center is designed appropriately none of the above should apply. In fact from centralization under a best practice model, leaders should accrue the following benefits:

o Strategic advice provided by business partners
o Increased flexibility
o Improved management information
o Faster transactions
o Reduced number of unresolved queries
o Greater clarity on service and cost of provision
o Forum for finance to be strategically aligned to the needs of the Force

A Force that moves from a de-centralized to a centralized system should try and ensure that the finance function does not lose touch with the Chief Constable and Divisional Commanders. Forces need to have a robust business case for finance transformation combined with a governance structure that spans operational, tactical and strategic requirements. There is a risk that potential benefits of implementing such a change may not be realized if the program is not carefully managed. Investment is needed to create a successful centralized finance function. Typically the future potential benefits of greater visibility and control, consistent processes, standardized management information, economies of scale, long-term cost savings and an empowered group of proud finance professionals, should outweigh those initial costs.

To reduce the commercial, operational and capability risks, the finance functions can be completely outsourced or partially outsourced to third parties. This will provide guaranteed cost benefits and may provide the opportunity to leverage relationships with vendors that provide best practice processes.

Process Efficiencies

Typically for Police Forces the focus on development has developed a silo based culture with disparate processes. As a result significant opportunities exist for standardization and simplification of processes which provide scalability, reduce manual effort and deliver business benefit. From simply rationalizing processes, a force can typically accrue a 40% reduction in the number of processes. An example of this is the use of electronic bank statements instead of using the manual bank statement for bank reconciliation and accounts receivable processes. This would save considerable effort that is involved in analyzing the data, moving the data onto different spreadsheet and inputting the data into the financial systems.

Organizations that possess a silo operating model tend to have significant inefficiencies and duplication in their processes, for example in HR and Payroll. This is largely due to the teams involved meeting their own goals but not aligning to the corporate objectives of an organization. Police Forces have a number of independent teams that are reliant on one another for data with finance in departments, divisions and headquarters sending and receiving information from each other as well as from the rest of the Force. The silo model leads to ineffective data being received by the teams that then have to carry out additional work to obtain the information required.

Whilst the argument for development has been well made in the context of moving decision making closer to operational service delivery, the added cost in terms of resources, duplication and misaligned processes has rarely featured in the debate. In the current financial climate these costs need to be recognized.

Culture

Within transactional processes, a leading finance function will set up targets for staff members on a daily basis. This target setting is an element of the metric based culture that leading finance functions develop. If the appropriate metrics of productivity and quality are applied and when these targets are challenging but not impossible, this is proven to result in improvements to productivity and quality.

A ‘Best in Class’ finance function in Police Forces will have a service focused culture, with the primary objectives of providing a high level of satisfaction for its customers (departments, divisions, employees & suppliers). A ‘Best in Class’ finance function will measure customer satisfaction on a timely basis through a metric based approach. This will be combined with a team wide focus on process improvement, with process owners, that will not necessarily be the team leads, owning force-wide improvement to each of the finance processes.

Organizational Improvements

Organizational structures within Police Forces are typically made up of supervisors leading teams of one to four team members. Through centralizing and consolidating the finance function, an opportunity exists to increase the span of control to best practice levels of 6 to 8 team members to one team lead / supervisor. By adjusting the organizational structure and increasing the span of control, Police Forces can accrue significant cashable benefit from a reduction in the number of team leads and team leads can accrue better management experience from managing larger teams.

Technology Enabled Improvements

There are a significant number of technology improvements that a Police Force could implement to help develop a ‘Best in Class’ finance function.

These include:

A) Scanning and workflow

Through adopting a scanning and workflow solution to replace manual processes, improved visibility, transparency and efficiencies can be reaped.

B) Call logging, tracking and workflow tool

Police Forces generally have a number of individuals responding to internal and supplier queries. These queries are neither logged nor tracked. The consequence of this is dual:

o Queries consume considerable effort within a particular finance team. There is a high risk of duplicated effort from the lack of logging of queries. For example, a query could be responded to for 30 minutes by person A in the finance team. Due to this query not being logged, if the individual that raised the query called up again and spoke to a different person then just for one additional question, this could take up to 20 minutes to ensure that the background was appropriately explained.

o Queries can have numerous interfaces with the business. An unresolved query can be responded against by up to four separate teams with considerable delay in providing a clear answer for the supplier.

The implementation of a call logging, tracking and workflow tool to document, measure and close internal and supplier queries combined with the set up of a central queries team, would significantly reduce the effort involved in responding to queries within the finance departments and divisions, as well as within the actual divisions and departments, and procurement.

C) Database solution

Throughout finance departments there are a significant number of spreadsheets utilized prior to input into the financial system. There is a tendency to transfer information manually from one spreadsheet to another to meet the needs of different teams.

Replacing the spreadsheets with a database solution would rationalize the number of inputs and lead to effort savings for the front line Police Officers as well as Police Staff.

D) Customize reports

In obtaining management information from the financial systems, police staff run a series of reports, import these into excel, use lookups to match the data and implement pivots to illustrate the data as required. There is significant manual effort that is involved in carrying out this work. Through customizing reports the outputs from the financial system can be set up to provide the data in the formats required through the click of a button. This would have the benefit of reduced effort and improved motivation for team members that previously carried out these mundane tasks.

In designing, procuring and implementing new technology enabling tools, a Police Force will face a number of challenges including investment approval; IT capacity; capability; and procurement.

These challenges can be mitigated through partnering with a third party service company with whom the investment can be shared, the skills can be provided and the procurement cycle can be minimized.

Conclusion

It is clear that cultural, process and technology change is required if police forces are to deliver both sustainable efficiencies and high quality services. In an environment where for the first time forces face real cash deficits and face having to reduce police officer and support staff numbers whilst maintaining current performance levels the current finance delivery models requires new thinking.

While there a number of barriers to be overcome in achieving a best in class finance function, it won’t be long before such a decision becomes mandatory. Those who are ahead of the curve will inevitably find themselves in a stronger position.

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The New Rule For Buying a Home – Using Owner Financing

The American Dream; what does it mean to you? People have different jobs or hobbies or passions in life, but one constant remains the same among all of us, and this common thread that unites our dreams is that of Home Ownership! Unfortunately, in this current economy, achieving the dream of home ownership is becoming more difficult than any time in recent history. Too many Americans are following the unwritten rule of home ownership that tells us to ‘Find a Realtor and Get a Bank Loan’. In past economies, with thriving job markets, lower inflation, and less credit restraint, that ‘rule’ may have made sense to follow.

But our current economic system is making it difficult for the average person to achieve the American Dream of Home Ownership. In times of unstable job markets, with double digit unemployment forcing people to become self-employed to make a living, the banks are requiring a W-2 stable job history in order to issue loans. In times of a great credit crisis, the banks are requiring stricter credit scores than most people are able to achieve. Fewer and fewer honest, hard working Americans who are used to following the ‘traditional rules’ for owning a home are having the opportunity to own their own homes.

What if you could achieve the American Dream of Home Ownership without the assistance of a bank?

The purpose of this document is to allow motivated home seekers an opportunity to write a New Rule of Home Ownership that allows you to declare your freedom from the services of a Bank in order to partake in your piece of the American Dream of Home Ownership!

In order to understand the New Rule of Home Ownership, let’s take a closer look at the existing rules of purchasing a house with Traditional Bank Financing.

The first part of the Traditional Bank Financing focuses on Qualifying for a Loan. While many different loan packages exist, the most common loan written in today’s market is an FHA Loan, and therefore, we shall use their guidelines as an example. The following are guidelines for an FHA Loan:

o FHA Loans require a minimum credit score of 620 to be eligible for a loan
o FHA will require 3.5% down on the home. This down payment MUST come from your account. You are not allowed to borrow from friends, family or anyone else. You must document where the funds for the down payment came from. Specifically, the source of the down payment must be from your personal checking, savings or retirement account and CAN NOT be borrowed!

In order to work with most Realtors, you must first get pre-approved for a bank. Many Realtors won’t even show you a house unless you can prove that you are able to afford and receive financing for the property. This painful process of pre-approval from a bank can take 2-3 days and involve the following steps:

o Proof of Creditworthiness
o You must provide 2-4 years worth of tax returns!
o You must provide your last 4 pay check stubs if you are an employee or an updated Profit and Loss statement if you are self-employed, a business owner, an independent contractor or entrepreneur. However, if you cannot show a consistent pay stub as proof of income, then you may want to skip ahead to the part of this document where ‘Owner Financing’ is discussed, as you will find it increasingly difficult to qualify for a mortgage.
o Your bank may require you pay off other debit to help improve your credit score to qualify for the loan
o And the worst part… this proof of creditworthiness is done throughout the entire home buying process! Even once you qualify and pick out the home of your dreams; underwriters at the bank will have you go through the same process to make sure you still qualify.

Now that you are pre-qualified for the home of your dreams, you may finally begin the process of working with a Realtor to find your new home.

Once you’ve found your home, the Traditional Banks will want an inspection performed on the home and may require the seller to fix EVERYTHING for the bank to finance your loan. Some people just want a small discount on the house and they will do their own repairs however, many times a traditional bank will not allow you to do this! These small fixes may add to the total price of the house.

Also, expect to pay Realtor fees, bank fees, filling fees, “point buy down” fees, loan origination fees, closing costs, title fees, surveys, appraisal fees, and anything else imaginable for which to be charged. Though many of these fees can be rolled into your loan, over the long term, you may be paying an extra 10% in unnecessary Financing Fees that are loaded into your loan!

What if there was a quicker, easier, and less intrusive way to take your share of the American Dream? What if you could look at homes without having to pay a Realtor fee, pre-qualify for a loan, and go through a 3 month home buying process? After all, we ARE in a BUYER’S market in Real Estate, so why shouldn’t we be able to buy?

Consider the possibility of declaring a New Rule. Instead of working with (and paying for) a Realtor, why not work with the Seller directly? Especially if that seller is a Professional Real Estate Investor who is not only willing to sell the house in a quick and simple matter, but is also will to FINANCE the sale of the house on a short-term basis!

Earlier in this eBook, we went over the process of the Tradition Bank Financing. Now, we shall detail the 7 Easy Steps of Purchasing Your Home with Owner Financing:
* Contact the Seller of the Home without having to pre-qualify for a loan and look at the home to decide if you want to purchase.
* Settle on a price
* Agree to a down-payment and interest rate
* Once you’ve agreed to a price, down payment, and interest rate, complete a Deposit to Hold form and pay this 1% fee applicable to the sales price of the property. This fee will take the property off the market while you are closing on the home.
* Fill out credit application; provide 2 most recent paycheck stubs and bank statements as proof that you can afford the monthly payment.
* (Optional) If you chose, you can order your own home inspection to review the condition of the home
* Close in 2-5 business days

Buying a home from a Professional Real Estate Investor is quick and easy. Once you have settled on the price and monthly payments, you have minimal paperwork to complete and can close on the transaction within one week! The following is a summary of some of the benefits of Owner Financing compared with Traditional Bank Financing:
* In many cases, there is no minimum credit score required
* Instead of 10% Traditional Bank Finance Fees / Closing Costs, your Owner Finance Fee averages to 5% of the transaction.
* Unlike Traditional Bank Financing, your down payment for Owner Financing may come from almost anywhere (as long as it is a legal way to raise the funds). You can borrow the money from family, friends, others. There are also some tax incentives for you to use part of your retirement savings. Either way, with Owner Financing, you are allowed to raise your own down payment as you see fit!
* You and the Owner Finance Seller will agree on a time to “close” on the home and may close within 5 business days!
* Your Owner Finance loan is dependent on your down payment and ability to pay the monthly payment and NOT on your credit or having a W-2 Job. Therefore, Business Owners, Entrepreneurs, Independent Contractors, and the Self-Employed may qualify for Owner Financed Homes!
* You are not required to provide extensive documentation to obtain your loan

Due to the efficiency, simplicity, and cost effectiveness, you can see why buying directly from an investor with Owner Financing is the New Rule for Buying Homes. Owner Financing interest rates may be a little higher than market price when you initially purchase your home, however, this higher rate, along with a sizeable down payment, will actually help you obtain conventional financing at a lower rate down the road when you decide to refinance!

A good way to look at Owner Financing is that is a solution to buying a home with short-term financing. Once you have paid your Owner Financed note on time for say 12-24 months, it’s easier to refinance your existing note with a traditional bank loan at a lower interest. It’s much quicker, easier, and less intrusive to refinance a home into traditional financing then it is to purchase a home with traditional financing!

The following example will detail the process and the costs of owner financing:

o John chooses to purchase a beautiful home for $150,000 with a traditional bank loan. John’s credit score is 590 and the bank will not loan him any money until his credit score is at least 620. John understands the importance of owning a home and wants to buy something now.
o John finds a home that is being offered for $150,000 with Owner Financing. John has $15,000 to put down and wants to close in 5 business days. John’s new loan is at an 8.5% rate for 30 years and the sellers would like John to refinance his loan in 24-36 months. John’s monthly payment is $1,350 and it includes Principle, Interest, Insurance, and HOA fees. John is happy because he can afford $1,350 per month and is able to take his part of the American Dream!
o As John pays on time for, say, 24 months, John has an excellent payment history with his current lender. John will also need to be working on his credit in those 24 months to raise his score to the current minimum of 620.
o When John approaches a traditional bank John will be able to demonstrate the following:
o John’s $15,000 down payment shows that he has ‘skin in the game’ and is not just going to bail on his house payments
o John CAN afford and has been paying $1,350 a month at a 8.5% rate for his loan
o John’s credit score is now above the minimum required 620
o If John can afford $1,350 a month at 8.5% interest, John can easily afford a $1,100 a month payment at 6.5%!

It is much easier to refinance a loan rather than trying to get a loan for the original financing! Since you are already in the house, there is no inspection required, no lengthily closing procedures and there is no longer all that extra red tape that is associated with buying a home with traditional financing!

As you can see, purchasing with Owner Financing can be easily done and quickly closed for those who cannot use a traditional bank loan but deserve to own a home now.

Summary

In today’s market, due to tough economic times, there are many people selling their properties. Yet, despite the fact that this is a ‘buyer’s market’, it is tougher to buy a home with Traditional Bank Financing than ever before. Following the old, unwritten rules will lead you to a long and unhappy life in an apartment complex. Motivated home seekers looking for their piece of the American Dream are unable to achieve this great promise by traditional and conventional means due to stringent lending requirements initiated by the very same financial institutions that gladly took over 1 billion of our tax dollars to bail them out! Banks tightening up on their lending practices is causing a shortage of homebuyers in the market. This is one of the biggest reasons that real estate values continue to free fall because there are not enough people who can qualify for available homes while following the unwritten rules.

Inspired home seekers, looking to break away from the old rules and ready to write his or her own New Rules to Home Ownership will be able to take advantage of this buyer’s market, and with Owner Financing, you will see more and more people purchasing homes. If you are in the market to buy a home however, you cannot qualify for a traditional loan, I strongly recommend you contact a company that specializes in Owner Finance Homes.

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