With historically low interest rates and lower residential property values . . . now is a great time to jump into the market. Whether or not you have owned an investment property or not, you can benefit from buying in today’s market.
Can you buy with less than 20% down payment? The short answer is, “yes!” If you can identify a HomePath or HomeSteps property you can purchase with only 10% down. What is HomePath? HomePath simply means the property is a Fannie Mae owned foreclosure. HomeSteps is Freddie Mac’s version. The catch? You cannot make an offer to purchase as an investor until after 15-days the home has been on the market. Why? The first 15-days that the home is on the market is available first to those who intend to owner-occupy–this gives the first-time home buyers and those who intend to live in a property and not rent the opportunity to compete against other buyers versus in competition with buyers and investors.
If you are looking for a long-term investment with a positive cash flow you should consider buying an investment property. It is advisable to hire a property management company and pay a customary 10% fee to manage the unique and new dynamics of being a landlord. You should also make sure you have 3-6 months of reserves (reserves are total mortgage payment, including taxes, insurance, principal and interest). This will protect you in the event the property is vacant or needs repairs completed.
I delayed my newest post in anticipation of my clients getting their offer accepted. Unfortunately, that was not the case. After much hoop jumping and a lot of work by several people–including the buyer’s agent, buyer’s agent’s partner, the buyer’s broker, and myself . . . there was no cooperation on the part of the listing agent. It’s unfortunate when you have a ready, willing and able buyer who qualifies for financing, and unable to get from step 1 to step 2 of the purchase process–due to an unwilling agent.
I could understand if we were an “out of area” mortgage banker . . . but we are local and close many loans that banks and other companies are unable to close. The stiletto heeled agent dug those heels in and would not budge. Did I mention my client was the only offer on the property and the sellers are facing foreclosure? It just doesn’t make sense. I am reminded of that scripture regarding “pride” it comes before the fall. I hope for the seller’s sakes that they are able to sell, if not they face a foreclosure–all because of an unwilling agent who lacked the fortitude to think “collaboratively” and instead dug in and was unwilling to waiver.
The good news for my clients . . . they are working with an outstanding team who has their best interest at heart and are actively working on another offer on a short sale (submitted last week). Will update when the clients get an accepted offer . . . meanwhile, Thanksgiving and Christmas are just around the corner.
Today, I am reminded how far the pendulum has swung in our current state of mortgage lending.
I am working with a couple that submitted an offer and were required to get a “back up” approval from a competing lender. We assisted the client in providing everything the other lender needed to grant an approval or “opinion” of the viability buyers can close the transaction.
The other lender couldn’t approve because they don’t provide the same financing as we do (Direct Lender). After much fanfare and back and forth the listing agent denied the buyers not based on whether we could close the loan or not–but because their preferred lender doesn’t offer the product or could approve them.
The buyers agent’s broker got involved and we had to escalate to our President of the company I work with to get a letter stating how we were able to approve the loan, when the other company would not.
Meanwhile, the poor seller is facing foreclosure while all this gorilla theatre plays out . . .
More to follow soon. Hoping for a happy success story to share.
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