The American Dream; what does it mean to you? People have different jobs or hobbies or passions in life, but one constant remains
an equivalent among all folks , and this common thread that unites our dreams is that of Home Ownership! Unfortunately, during
this current economy, achieving the dream of homeownership is becoming ■■■■■■ than at any time in recent history. Too many
Americans are following the unwritten rule of homeownership that tells us to ‘Find a Realtor and obtain a Bank Loan’. In past
economies, with thriving job markets, lower inflation, and fewer credit restraint, that ‘rule’ may have made sense to follow.
But our current financial system is making it difficult for the typical person to realize the American Dream of Home Ownership. In
times of unstable job markets, with doubledigit unemployment forcing people to become selfemployed to form a living, the banks
are requiring a W2 stable job history to issue loans. In times of an excellent credit crisis, the banks are requiring stricter credit
scores than most of the people are able to do . Fewer and fewer honest, hardworking Americans who are wont to following the
‘traditional rules’ for owning a home are having the chance to have their own homes.
What if you’ll achieve the American Dream of Home Ownership without the help of a bank?
The purpose of this document is to permit motivated home seekers a chance to write down a replacement Rule of Home Ownership
that permits you to declare your freedom from the services of a Bank to partake in your piece of the American Dream of Home
To understand the New Rule of Home Ownership, let’s take a better check out the prevailing rules of buying a house with
Traditional Bank Financing.
The first a part of the normal Bank Financing focuses on Qualifying for a Loan. While many various loan packages exist, the
foremost common loan written in today’s market is an FHA Loan, and thus , we shall use their guidelines as an example. the
subsequent are guidelines for an FHA Loan:
o FHA Loans require a minimum credit score of 620 to be eligible for a loan
o FHA would require 3.5% down on the house . This deposit MUST come from your account. you’re not allowed to borrow from
friends, family, or anyone else. you want to document where the funds for the deposit came from. Specifically, the source of the
deposit must be from your personal checking, savings, or pension plan and may NOT be borrowed!
To work with most Realtors, you want to first get preapproved for a bank. Many Realtors won’t even show you a house unless
you’ll prove that you simply can afford and receive financing for the property. This painful process of preapproval from a bank can
take 23 days and involve the subsequent steps:
o Proof of Creditworthiness
o you want to provide 24 years’ worth of tax returns!
o you want to provide your last 4 paycheck stubs if you’re an employee or an updated Profit and Loss statement if you’re selfemployed, a business owner, an independent contractor, or an entrepreneur. However, if you can’t show a uniform pay stub as proof
of income, then you’ll want to skip ahead to the a part of this document where ‘Owner Financing’ is discussed, as you’ll find it
increasingly difficult to qualify for a mortgage.
o Your bank may require you to pay off another debt to assist improve your credit score to qualify for the loan
o and therefore the worst part… this proof of creditworthiness is completed throughout the whole home buying process! Even once
you qualify and detect the house of your dreams; underwriters at the bank will have you ever undergo an equivalent process to form
sure you continue to qualify.
Now that you simply are prequalified for the house of your dreams, you’ll finally begin the method of working with a Realtor to
seek out your new home.
Once you’ve found your home, the normal Banks will want an inspection performed on the house and should require the vendor to
repair EVERYTHING for the bank to finance your loan. Some people just need a small discount on the house and that they will do
their own repairs however, repeatedly a standard bank won’t allow you to try to to this! These small fixes may increase the entire
price of the house.
Also, expect to pay Realtor fees, bank fees, filing fees, “point buy down” fees, loan origination fees, closing costs, title fees,
surveys, appraisal fees, and anything imaginable that to be charged. Though many of those fees are often rolled into your loan, over
the future , you’ll be paying an additional 10% in unnecessary Financing Fees that are loaded into your loan!
What if there was a quicker, easier, and fewer intrusive thanks to take your share of the American Dream? What if you’ll check out
homes without having to pay a Realtor fee, prequalify for a loan, and undergo a 3 month home buying process? in any case , we
ARE during a buyers’ market in land , so why shouldn’t we be ready to buy?
Consider the likelihood of declaring a replacement Rule. rather than working with (and paying for) a Realtor, why not work with
the vendor directly? Especially if that seller may be a Professional land Investor who isn’t only willing to sell the house during a
quick and straightforward matter but is additionally willing to FINANCE the sale of the house on a shortterm basis!
Earlier during this eBook, we went over the method of Tradition Bank Financing. Now, we shall detail the 7 Easy Steps of buying
Your Home with Owner Financing:* Contact the vendor of the house without having to prequalify for a loan and appearance at the house to make a decision if you
would like to get .
- choose a price
- comply with a downpayment and rate of interest
- Once you’ve agreed to a price, deposit , and rate of interest , complete a Deposit to carry 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’re closing on the house .
- Fill out credit application; provide 2 most uptodate paycheck stubs and bank statements as proof that you simply can afford the
- (Optional) If you chose, you’ll order your house inspection to review the condition of the house
- draw in 25 business days
Buying a home from knowledgeable land Investor is quick and straightforward . Once you’ve got settled on the worth and monthly
payments, you’ve got minimal paperwork to finish and may close on the transaction within one week! the subsequent may be a
summary of a number of the advantages of Owner Financing compared with Traditional Bank Financing:
- In many cases, there’s no minimum credit score required
- rather than 10% Traditional Bank Finance Fees / Closing Costs, your Owner Finance Fee averages to five of the transaction.
*, Unlike Traditional Bank Financing, your deposit for Owner Financing may come from almost anywhere (as long because it may
be a legal thanks to raise the funds). you’ll borrow the cash from family, friends, others. There also are some tax incentives for you
to use as a part of your retirement savings. Either way, with Owner Financing, you’re allowed to boost your own deposit as you see
- You and therefore the Owner Finance Seller will agree on a time to “close” on the house and should close within 5 business days!
- Your Owner Finance loan depends on your deposit and skill to pay the monthly payment and NOT on your credit or having a W2
Job. Therefore, Business Owners, Entrepreneurs, Independent Contractors, and therefore the SelfEmployed may qualify for Owner
- you’re not required to supply extensive documentation to get your loan
Due to the efficiency, simplicity, and costeffectiveness, you’ll see why buying directly from an investor with Owner Financing is
that the New Rule for purchasing Homes. Owner Financing interest rates could also be a touch above the market value once you
initially purchase your home, however, this higher rate, along side a sizeable deposit , will actually assist you obtain conventional
financing at a lower rate down the road once you plan to refinance!
A good thanks to check out Owner Financing is that’s an answer to purchasing a home with shortterm financing. Once you’ve got
paid your Owner Financed note on time for say 1224 months, it’s easier to refinance your existing note with a standard loan at a
lower interest. It’s much quicker, easier, and fewer intrusive to refinance a home into traditional financing than it’s to get a home
with traditional financing!
The following example will detail the method and therefore the costs of owner financing:
o John chooses to get a gorgeous home for $150,000 with a standard loan . John’s credit score is 590 and therefore the bank won’t
loan him any money until his credit score is a minimum of 620. John understands the importance of owning a home and needs to
shop for something now.
o John finds a home that’s being offered for $150,000 with Owner Financing. John has $15,000 to place down and needs to shut in
5 business days. John’s new loan is at an 8.5% rate for 30 years and therefore the sellers would really like John to refinance his loan
in 2436 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 may take his a part of the American Dream!
o As John pays on time for, say, 24 months, John has a superb payment history together with his current lender. John also will got to
be performing on his credit in those 24 months to boost his score to the present minimum of 620.
o When John approaches a standard bank John are going to be ready to demonstrate the following:
o John’s $15,000 deposit shows that he has ‘skin within the game’ and isn’t just getting to bail on his house payments
o John CAN afford and has been paying $1,350 a month at an 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 instead of trying to urge a loan for the first financing! Since you’re already within the house,
there’s no inspection required, no lengthily closing procedures and there’s not all that extra bureaucratic procedure that’s related to
buying a home with traditional financing!
As you’ll see, purchasing with Owner Financing are often easily done and quickly closed for those that cannot use a standard loan
but need to own a home now.
In today’s market, thanks to tough economic times, many of us are selling their properties. Yet, although this is often a ‘buyer’s
market’, it’s tougher to shop for a home with Traditional Bank Financing than ever before. Following the old, unwritten rules will
lead you to an extended and unhappy life in an apartment complex. Motivated home seekers trying to find their piece of the
American Dream are unable to realize this great promise by traditional and traditional means thanks to stringent lending
requirements initiated by the exact same financial institutions that gladly took over 1 billion of our tax dollars to bail them out!
Banks tightening abreast of their lending practices is causing a shortage of homebuyers within the market. this is often one among
the most important reasons that land values still free fall because there aren’t enough people that can qualify for available homes
while following the unwritten rules