Norada Real Estate Investments

No Money Down Technique: Owner Financing

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Owner financing is the most common way to buy a property with "no money down".  Instead of getting cash at closing, the seller agrees to finance all or some part of the purchase price. What this means is the owner of the property will act as a bank and lend the buyer all or part of the money needed to purchase the property.

It is estimated that nearly 35% of all the properties in the United States are owned free and clear (no mortgage financing).  A surprising number of those owners would be willing to finance all or part of the purchase price as a mortgage and take payments over an agreed upon period of time.

Generally, you will be getting a second mortgage from the seller.  That means you will get the majority of your financing (the first mortgage) from a primary financing source like a bank.  The seller would provide most or all of the balance in the form of a second mortgage.

There are four types of owner financing to that you could ask for:

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How To Improve Your FICO Credit Score

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Improving your FICO® credit score may take time and often there is no quick fix. FICO scores reflect credit payment patterns over time with more of an emphasis on recently reported information than older information. Below are some general tips to follow that may :

  • Focus on the negative factors provided with your FICO score. These represent the main areas where your score could be higher.
  • Don't open new accounts for the purpose of providing a better credit picture – it probably won't raise your FICO score and, in some instances, may even lower your score. Apply for and open new credit accounts only as needed.
  • Keep balances low on credit cards and other “revolving credit”.  High outstanding credit card debt can negatively impact your FICO score.
  • Pay off debt rather than move it around from one credit card to another. The most effective way to increase your FICO score in this area is by paying down your total revolving (credit card) debt.
  • Pay your bills on time. Delinquent payments, even if only a few days late, and collections can have a major negative impact on your FICO score.

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20 Tips for a Positive New Year

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Amidst all the difficulties we hear each day in the media about the economy, we must remember that there still are opportunities out there.

Here are 20 tips for a positive new year:

1. Stay Positive. You can listen to the cynics and doubters and believe that success is impossible or you can know that with faith and an optimistic attitude all things are possible.

2. When you wake up in the morning complete the following statement: My purpose is _______________________.

3. Instead of being disappointed about where you are, think optimistically about where you are going.

4. Take a morning walk of gratitude. It will create a fertile mind ready for success.

5. Eat breakfast like a king, lunch like a prince and dinner like a college kid with a maxed out charge card.

6. Transform adversity into success by deciding that change is not your enemy but your friend. In the challenge discover the opportunity.

7. Make a difference in the lives of others.

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The U.S. Housing Market's False Bottom

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Existing home sales surprised the markets by rising 7.4% to an annual rate of 6.54 million units in November, the highest since February 2007, according to the National Association of Realtors (NAR). That's only 10% below the all-time peak in 2005.

What's more is that house prices, as measured by the S&P/Case-Shiller 20-City Home Price Index, rose for the fourth consecutive month in September before stabilizing in October when prices were flat.

The NAR is inevitably convinced that the worst is over and that housing is due for a rapid recovery, and that home prices will take out 2006's peaks some time in 2011 or 2012.

Not so fast, guys!

The recovery in housing has been boosted by just about every artificial means imaginable:

Of course it looks like the housing market has recovered! The question is what happens when some of these subsidies are taken away?   [Read more…]

The Quick and Expected Climb to 6% Mortgage Rates

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Mortgage rates have been steadily climbing, from a low of 4.5% around November 27, 2009 to above 5% on December 22, 2009.  For the past two months I've been warning that this will eventually happen.  It's not because the economy is recovering; it isn't recovering.  The reason mortgage rates will rise to 6% or above, sooner rather than later is because that is the "natural" market.

About a year ago, the Federal Reserve announced a $1.25 Trillion mortgage rates subsidy, by purchasing mortgage-backed securities in the open market, through March, 2010.  Right before the subsidy was announced, mortgage rates were at or above 6%.  The subsidy was referred to as Bernanke's "nuclear option" meaning he was using an extraordinary monetary stimulus to keep mortgage rates artificially low.

One year and 12 months into the 15-month game, we're at $1.07 Trillion spent on this open market MBS purchase program.  This means that the Fed still has about $150 Billion to spend in three months, so mortgage rates should stay around 5%, right?  After all, the Fed only spent $80 billion/month and they have at least 2 months of money left.

Markets are discounting mechanisms meaning that traders anticipate how potent the Fed can be.  The Fed is just about out of bullets and MBS traders know it.  Let me try to give you an example of what the Fed did by recanting the explanation I gave, to a Del Mar Realtor, on the beach this summer.

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Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

(949) 218-6668
(800) 611-3060
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