Cities with Most Underwater Mortgages Still Offer the Best Bargains

Source: https://thinkrealty.com/cities-underwater-mortgages-still-offer-best-bargains/

Another one million previously underwater homes are now above the water line. ATTOM Data Solutions released its 2016 Year End Home Equity and Underwater Report that shows just 5.4 million… more

The post Cities with Most Underwater Mortgages Still Offer the Best Bargains appeared first on Think Realty | A Real Estate of Mind.

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Are you contemplating investing in real estate? But you do not have enough money to do this. Right here is a tip you are able to use as long as the property seller is willing to negotiate with you.

To be fair, not all sellers will be willing (or even understand) the concept outlined. Your best wager is to find a land that the owner has great desire for selling, whether because of moving, divorce, or they are frustrated with the people renting the place.

Actually, if you are currently renting and thinking of using this strategy perhaps the owner would be happy to help you out! There are several variations that may be used depending upon you and your seller. Do they desire the market price or are they just desperate to get out of the monthly payments – maybe facing foreclosure?

The easiest way is to take over their mortgage payments – called ‘assuming’ the mortgage. You will have to be approved by the original lender to assume the mortgage. If you can’t get approved for an assumable mortgage you could also try a ‘subject to’ assumption where you merely make payments while the property remains in the seller’s name.

You take over the original mortgage and get a 2nd mortgage on the remaining cost of the house with the seller. Offer a high, interest-only payment for a short time period – 2 or 3 years. Rather than having the money stay in a bank they can be collecting a high interest over 2 or 3 years with the remainder due in full at the end of the term.

When the term ends you should be able to refinance the cost, or perhaps you could sell. Unless you hit a genuine bad market the value of the property should have risen in that time.

A lot of mortgage lenders merely need to make a great investment. While your local bank could still shy away there are a lot of financial lenders that would want to make a deal. Financiers like real estate. The mortgage is usually around 60-70% of the value of the land, so as long as they know they get their money back in the value of the property if you default, they don’t care what sort of money you make. Conclude the deal with a second mortgage created with the seller. If you default they could eventually foreclose on the property and sell it, paying down the existing mortgage in the proceeds.

Now you can see the complete picture. It is better that seller and buyer can work hand in hand. In the event that they can’t wait for a sale, you may still give them their asking price with a little overall flexibility on their part.

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