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Investor Mortgage Report 6.15.2020

What We Know:

Rates on the conventional side have maintained strong with rates in the low 3’s. If you’re still wondering whether or not you should refinance, we’re going to dive into what we call ‘The Tipping Point Rate.’

This week, we’re seeing more larger non-conventional companies dipping their toes back into the investor loan water. This gentle ease back in helps increase liquidity, but it still comes at a price:  Lower LTVs and higher costs.

What This Means for You:

There is an exact rate where it’s wise to refinance. We call this ‘The Tipping Point Rate.’ This specific rate is the point where you won’t pay a penny more in principal and interest over the life of the loan.

Calculate the tipping point rate on your refinance

Going above this point might increase your cash flow, but it will end up costing you more in the long run. Sometimes this means it’s better to stick with what you have now.  We’re focused on putting more money in your pocket and less in the bank’s pocket.

This is for investors looking to increase monthly cash flow without adding lifetime cost of debt. So, if you’re solely concerned about your monthly cash flow, this probably isn’t the program for you.

So how does this work? Let’s take a look at an example.

Joe is an investor who is looking at refinancing to increase his cash flow every month. But not if it means paying tens of thousands of dollars extra to the bank in principal and interest.

Joe has been paying his current mortgage for 5 years. If he keeps the loan until it’s paid in full, he’ll end up paying $360k in payments over the next 25 years.

Joe wants to know the exact rate that he can refinance to a new 30-year fixed without increasing his amount owed. If it exceeds $360k, then he won’t refinance.

By knowing this exact rate, he can stretch his payments out and lower his interest rate without paying a penny more over the life of the loan.

How do we find Joe’s Tipping Point Rate?

Luckily, we have a handy program that can calculate just that.  If you would like to know your own Tipping Point Rate, send us an email!  We’ll run the report specifically for you and your property!

Note: Investor Real Estate Loans doesn’t currently lend in all states, but we are always happy to help and make sure you understand your numbers!

*All non-commercial and construction loans offered by TNS Loans NMLS #1719349

Investor Mortgage Report 6.9.2020

What We Know:

The markets are stabilizing, and underwriting term times are back in pre-Covid standards.

With rates for single-family investor properties on conforming loans hovering around the low 3’s, it might be time to look at locking in and increasing your cash flow.

What This Means for You:

As an investor, there is money in the money—Your money!

Your credit score is the key to keeping more of your money. No matter your income situation, the better your score, the cheaper the money. Cheaper money equals more cash in your pocket.

Investor Credit Score impact

Last week, we showed you how much money can be saved with a good credit score. Now, it’s time to go over how to increase that score quickly.

How to raise your score and increase your cash and cash flow

Want to save money as an investor? It might be time to crunch the numbers

Do you want to keep money in your life or keep supporting a banker’s life? We’re pretty sure we know the answer to that particular question.

They say that Vegas was not built on the gambler’s winnings. The same can be said about banks. Banks keep popping up everywhere, even when most banking has gone online.

 

Why is that? Because they know there’s money in your money.

 

So how can you better prepare your credit score for an investor loan?

  1. Plan before you apply by checking your score online.
  2. Stop applying for ANY credit at least 60 days before a loan application.
  3. Raise your score with one or two of these simple methods:
    • Use private money when you can and keep it off your credit. If you can borrow from a private individual or entity that doesn’t report on credit to pay off/down your credit, do it BEFORE your next statement date.
    • Don’t close paid off accounts.
    • Pay down your credit cards before due dates. This will take extra cash now, but it will save you tens of millions in the future.
    • Keep balances below 30% of outstanding balances on revolving accounts like credit cards.
    • Dispute any item that should not be on your report.

This list does not include paying your accounts on time. That’s a no-brainer. You should always pay on time. There’s typically no quick fix for late payments.

Stay tuned, because next up, we’ll be covering how to check your credit on your own! In the meantime, if you have questions about your score, what it’s costing you, or what a better score could save you, reach out! We’re always happy to go over the numbers with you!

*All non-commercial and construction loans offered by TNS Loans NMLS #1719349

Investor Mortgage Report 5.19.20

Non-Conventional Mortgage Loans Are Making a Comeback…

Non-conventional loans are closing again

Non-conventional mortgage loans are getting funded again.

What We Know:

Finally, we’re seeing an influx of non-conventional mortgage loans being funded. Hopefully, this positive change is bringing some relief to both investors and their buyers who don’t fit neatly into the conventional mortgage lending box.
 
Mortgage loans in this lending bucket typically do not require tax returns but rely on bank statements or leases for income.
 
Even though some are back, requirements for securing these loans have increased and are a little harder to obtain.  The majority of the lenders have a starting point of a max 65% LTV and a credit score of 700+.  The good news is the rates have not skyrocketed. There are now lenders lending who had previously been turning away would-be investors.
Light at the end of the lending tunnel

There’s a light at the end of the lending tunnel again.

 

The Takeaway:

We are on the road to lending opening back up. The economic restrictions and resulting uncertainty appear to be lessening. Apparently, to the point where lenders are feeling confident enough to begin closing riskier deals again.
Make no mistake, it will be a slow process. But there appears to be a light at the end of the COVID lending tunnel. Stay tuned as we provide continuing outlook updates over the course of the coming weeks.
In the meantime, if you’d like to review your financing options for investment properties, feel free to reach out! We’re always happy to run your numbers with you.
*All non-commercial and construction loans offered by TNS Loans NMLS #1719349

Don’t Sideline Your Investment Game

investment power player

Be a real estate investment power player by harnessing the power of OPM funding.

You don’t have to be a bench warmer in the real estate investment world. Transform yourself into a power player! 

 

It’s easy to think that with the COVID-19 shutdowns, stay-at-home orders, and lasting economic uncertainty that now is an okay time to sit idle and just see what happens in the real estate investment world.

 

And that would be your first mistake.

 

By many standards, there’s never been a better time to go all-in for your real estate investment business. Mortgage rates are low, making previously out-of-reach properties insanely affordable. Showings are still under a good deal of restrictions and safety precautions. But this just means the buyer pool is limited to the extremely serious. Great news for fix-and-flip investors looking to turn a quick profit!

 

It’s true, the banks have been saying no, but that doesn’t mean the game is over. We’re here to tell you that there are other ways to play besides begging the banks to fund your deals.

 

Put your future in your hands: Make the switch to OPM (Other People’s Money) funding and stop waiting on the bank.  When the deals start popping up (and they will,) you’ll be able to buy the properties you want when you want, and for what you want to pay. 

Instead of sitting on the bench, you can be actively working to build that dream life, even in times of uncertainty.

 

Questions on how to go about making this transition? Luckily for you, we’re hosting an Intro to OPM Webinar where we’ll be covering all the critical details of how to make this crucial switch for your investment business!

 

Get signed up >>>

New Build Construction is Slowing Down. Here’s Why That’s Not Necessarily A Bad Thing.

New-home construction sees its largest monthly decline since March 1984, as COVID closures take a toll.

 

According to March’s economic report by MarketWatch, new-build housing starts and permits have fallen to their slowest pace since last July.

Builders started construction on new homes in the U.S. at a pace of 1.22 million in March, representing a 22% decrease from a revised 1.56 million in February. However, even with this decrease, the figures were still 1.4% higher than a year ago.

It’s the largest decline we’ve seen since March 1984.

Permitting activity, however, had a little less dramatic of a slowdown. Privately-owned housing unit permits were authorized at a seasonally-adjusted rate of 1.35 million. That was 6.8% below the revised pace of 1.45 million set in February, but still 5% above last year’s rate.

This news isn’t all doom and gloom, however.
Yes, housing starts are down and inventory is very low, but these conditions create some interesting market conditions.  With the lockdown and the rise in unemployment, one would start to think we may have a housing crash on our hands (and it’s still possible if closures and stay-at-home orders continue much longer.)
For now, with mortgage rates so low (buyers still mainly purchase on payments they can afford) and inventory shrinking, it is keeping home prices high. There’s not enough inventory to meet buyer demand, and therefore, prices remain stable.
What this means for the future will all come down to how long our economy is closed.

It’s Time to Change the Game.

Now isn’t the time to improve anything. It’s time to change everything.

 

Are you aware that over the course of the past few weeks, almost all lending for the investment community has dried up? Not only that, but it’s uncertain how long it will be before these products become available again.

But this doesn’t mean the end of the road for investment-based businesses who rely on funding to complete their deals.

 

Why should banks control us and our financial future? If they choose to close their doors and refuse to lend money to investors, then so be it. It’s time to change how the lending world works. 

 

Just because the economy takes an unexpected nosedive doesn’t mean our investments need to. When the banks say no, we can remain in control of our financial futures by turning to personal funding partners. 

 

OPM- or, Other People’s Money – funding is one of the best ways to gain and keep control over your finances as an investor and gives you the freedom to continue your business, even as the banks batten down the hatches.

 

Want more info on how to make the switch to funding your deals using OPM? Join us for our next weekly webinar! Whether you’ve dabbled with this way of doing business before, or you’re on the fence about how and when to get started, we’ll make sure you’ve got the information YOU need to thrive during these uncertain times.

 

Get signed up here! >>>

 

Just remember: Keep it legal, keep it safe, keep it honest.

Friday Fun: Down Payment

With our two-step loan program, Quick to Buy, Quick to Refi, you don’t need to spend months or years saving up for a down payment. You can start your investment journey today. Our team is ready to show you how. Contact us today!

Buying a Duplex – What NOT To Do

Whether you’re getting ready to invest in your first rental units, or you’ve been renting for years, it’s always a good idea to learn from other people’s mistakes. In this video, Chandler David Smith tells us about the lessons he’s learned and what NOT to do as an investor. Check it out!

Ready to start investing? Need some guidance? Then contact our team. We’re ready to show you how to invest and invest right!

Friday Fun – First Time Flipping Houses

Thursday Tips: Investment Property Walk-Through

How do you analyze an investment property before you invest in it? Well, check out this walk-through from Bigger Pockets. It offers excellent tips on evaluating a property in order to sell (or rent) it for top dollar.