Find out what down-payment assistance programs you may qualify for!
Used to be that anyone putting less than 20% down needed private mortgage insurance to protect lenders against borrower default.
Until now. We have partnered with a global lending institution committed to offering up to 100% financing, will contribute up to $4,500 toward closing costs and does not charge PMI!
Too good to be true? We promise, it's not. Contact me for details.
No one has a crystal ball. However, to "make your money when you buy", real estate investment analysis requires a careful look at variables, perhaps most important being projected gross income, at the time of purchase.
Net Operating Income
The amount left over after subtracting expenses from gross income, Net Operating Income (NOI) is crucial. Using a formula known as IRV with the income capitalization approach, NOI helps us to find value as follows:
Net operating income (I) ÷ capitalization rate (R) = value (V)
To find NOI, use income and expense statements for the subject and similar properties to first estimate the potential gross income, then subtract vacancy and collection loss. From this, estimate expenses and subtract them from the effective gross income.
Cap (Capitalization) Rate
Similar to a rate of return, the capitalization rate is the percentage investors hope to get from an investment. With as little information as recent sales data for comparable properties, the formula used to find Cap Rate is as follows:
Net operating income (I) ÷ Sales price (V) = Cap rate (R)
Together with expert market knowledge, this analysis helps us make reasonable projections that help our clients make informed purchase decisions every time.
Reach out to us for a consultation, we look forward to serving you.
Specializing in helping clients build rental portfolio's, at Atlas Real Estate Group we like to change the heading to "...Hello to Building Long Term Wealth".
With a clear understanding the money is made when you buy, we use market knowledge to analyze pricing and project cash flow so that our valued clients make informed decisions going in.
From single family to large apartment buildings, our in-house experts have devised a formula to success over the last decade that works and look forward to serving you.
Down Payment Required
Studies show many would be home buyers don't take the plunge for a variety of reasons, not the least of which is the amount of down payment required. So by a show of hands, how many think the requirement is 20%?
Congratulations, you're in the majority.
Mortgage Insurance Required Above 80% LTV
Though in existence since the late 1800's, it wasn't until the 1950's that mortgage insurance as we know it came into use. Designed to minimize the lender's risk, mortgages that are more than 80% of a home's value require it. Thus the reason many think 20% is the down payment requirement, it's not.
Low Down Payment Programs
In fact, the majority of owner occupant loan programs require less than 5% down (Conventional). FHA only requires 3.5% down where VA/USDA loans require 0% for a down payment!
Closing Costs and Prepaids
In addition, ALL loans will have closing (title, origination, etc) and prepaid costs (taxes, hazard insurance, interest and other expenses), usually totaling 2% - 3% of the loan amount.
How Much Will YOU Need
Doing the math, a qualified borrower will need anywhere from 2% - 8% of the purchase price to cover the down payment, closing costs and prepaid items discussed, or up to $8,000 on every $100,000.
Down Payment Assistance
With many programs that offer to help with down payment and closing costs up to 4% of the purchase price, the truth is many borrowers will have the ability to buy a home with as little as zero out of pocket costs!
Visit this link to see what down payment assistance you may qualify for! http://bit.ly/2oEm058
So what are you waiting for?! Contact your favorite real estate professional for a no cost, no obligation consultation today!
Will reactivating an old account help my credit score? "If the borrower reactivated an old account, would the borrower see a boost in credit score?"
Remember Sub-prime Mortgages?
Nowadays, we are basically able to categorize buyers in one of two ways, those with slightly challenged credit that still qualifies them for competitive interest rates in the 4% range or those who cannot be financed at all. But it wasn't always that way. At one point borrowers were either "A paper", meaning they had "good credit" and qualified for the lowest interest rates and fees available or a sub-prime "bad credit" borrower which were placed in what are now called predatory loans or they were Alt-A, which meant "challenged credit" at slightly better but far from prime rates and fees. Although many in the industry will disagree, as some loan officers made a killing charging front and back-end points to the tune of 1 - 4,5,6% of the loan amount back in the day, others found it unconscionable and are glad those days are over, present company included!
Your Bucket List
But, are they? In 1997, there started being talk about adopting Risk Based Pricing in the mortgage market, an existing model where "lenders assess borrowing costs loan by loan, aided by computerized loan-evaluation systems capable of forecasting the default risk dictated by each mortgage". Each loan having an investor such as Freddie Mac, Fannie Mae and others to guarantee the loan, these investors would then "adjust the guarantee fees" "to more accurately reflect the risks represented by the individual mortgages within a loan pool that an originator wants to sell".
Replacing prime and sub-prime titles with "buckets", lenders are no longer able to charge as much in rates and origination fees, even for "challenged credit" borrowers, which is why we barely see rates deviate much from the 4% range these days and also why "bad credit" borrowers have been forced out of the market, the American dream out of reach for now.
The American Dream
Or is it? A new breed of lender is here to pickup where the subprime lenders, many if not most of them now out of business, left off. With competitive, low interest rate FHA/VA and USDA mortgages down to a 550 FICO score, the dream of home ownership is very much alive and well. Lucky to work with a few, the Axiom Realty Team professionals are standing by to be of service because, with service first, rewards come later.