By: Nick Hacket Pain

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Investments

If you’ve been involved in real estate investing for any length of time, chances are you’ve tried to obtain 100% investment property mortgages. If you’ve made the effort recently, you know that these 100% loans are becoming increasingly difficult to find. The reason is simple- these 100% investment property mortgages default at a much higher rate than most other types of mortgage, and the end result is often foreclosure.

This puts many investors in the unenviable position of ‘motivated seller’ and forces them to look for creative ways to unload their property, in many cases even phoning other investor’s ‘We Buy Houses’ hotlines. These circumstances give rise to a vicious circle of investors, feeding off one another, giving the entire industry a black eye in the process.

These scenarios are being played out in cities across America, and investment property mortgages, particularly 100% loans, are taking a bad hit. Lenders are eliminating these products from their portfolio of services in droves, and investors are scrambling to find alternate sources of funds.

One such source is Private Money. Another, the self-directed IRA, allows investors to use their own retirement funds for real estate investments. Investment property mortgages and creative loans from sources other than institutional lenders and mortgage brokers are increasing at a record pace.

But are these alternatives to investment property mortgages a good idea?

If used wisely, they can be, but there may be a wiser way of looking at the situation. First, we need to examine the question of why investors would need investment property mortgages for 100% of the appraised value of the property in the first place. The only real answer to that question is that too many investors have been overpaying for their properties.

The real estate bubble, and rapidly rising property values, caused a buying frenzy by investors in many areas of the country. This rush spilled over, even into areas where there was no true bubble. Now that the bubble has burst in most areas, investors are feeling the pinch. The old tactic of buying at market value and letting the fast-rising market build in your profit no longer works… in many cases it NEVER worked.

The ONLY way to guarantee profit, and avoid the meltdown that comes with over-paying, is to buy value. The investor must do his or her homework and buy for well under market value. Then he will have no need for 100% investment property mortgages. When you routinely buy your properties for 80% of market or less, obtaining investment property mortgages becomes much less problematic. You have a greater selection of loan products to choose from, and qualifying is much less stringent.

The moral of the story? Buy value, and do your homework. If you’d like to learn more, visit my page on Investment Property Mortgages

Now, go make more offers!

By: Tom Dunn

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With larger numbers of older Americans reaching retirement age than ever before, along with many others who have already stopped working, the need for long-term health and medical care is gaining more relevance in society. No matter if it is about finding a nursing home or providing some sort of home care, it is difficult to locate the funds you need for them. Many senior citizens are unsure of where they will get the money they need to continue caring for themselves if health problems should arise. This may be why reverse mortgage getting more attention in the media.

More and more, as you read the newspaper, turn on the television, or browse financial investment websites, the subject to reverse mortgages is cropping up. Many seek to shed some light on this often murky topic by highlighting the different advantages and disadvantages that are associated with reverse mortgages. Notably, two major organizations that are focused on the elderly, AARP and the National Council on Aging (NCOA), have endorsed reversed mortgages as a viable option to provide long-term care solutions for seniors-in certain circumstances.

In a recent report conducted by the NCOA stated that over 13 million people are eligible to use a reverse mortgage to fund their long-term expenses at home and help many retain their independence longer. This option has some definite advantages and offers alternative financial resources from which to draw from so less money is taken from Medicare and Medicaid, both of which are under enormous financial pressure due to the sheer volume of retirees who rely on them.

Before going any further, it will be good to define what a reverse mortgage is exactly. First, they are also known as home equity conversion mortgage. Reverse mortgages are actually supported federal agencies like FHA and HUD. Only people sixty-two and older are eligible to use a reverse mortgage program. This loan is called a ‘non-recourse loan’, because it does not have to be paid back in the event that the recipient dies. Put a different ways, the family is not liable for the repayment of the reverse mortgage.

The reverse mortgage, as the name implies, works in the exact opposite way that a normal mortgage does. You do not have to repay a reverse mortgage. Rather, it is the homeowner who gets a regular check. In fact, there are no monthly payments. Repayment is required when the homeowner leaves the home for a nursing facility or passes away.

The money received from a reverse mortgage is totally tax free and does no affect your current Medicare or SSI benefits so seniors do not have to worry about looking money from their monthly incomes.

If you are considering a reverse mortgage, it is in your best interest to determine if your circumstances call for such a loan measure. Not everyone may choose to use a reverse mortgage to deal with their particular situations but it is still remains a viable option for many. Yet, for those who have some difficulty making ends meets each month or find they are in need of costlier care options, the reverse mortgage represents relief and assistance.

Many senior citizens are taking advantage of the financial benefits and using the extra money that a reverse mortgage provides to pay for in-home care options, prescription drugs, to pay off linger debts, and even improve their homes so they can function there in safety and comfort.

By: Joseph Kenny

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