The Mortgage Manifesto!

Reverse Mortgages & Your Financial Planning Concerns

Reverse mortgages are becoming increasingly popular over the last several years. The number of federally insured reverse mortgages increased by over 70,000 in just the last five years. What the consumer needs to realize is that there are a variety of programs and the FHA / HUD insured; although the most popular, is just one of them. There are a number of other proprietary reverse mortgage products.

Effectively Using Lease Options

Really, if you think about it, buying a property and renting it out is nothing new in the world of real estate investing. The practice has been going around much longer than any of the real estate gurus that created these "get rich" real estate courses!

So why is everyone making such a big hoopla about doing lease options?

No Money Down Deals
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One of the many reasons that lease options are so popular, is the possibility of creating a No, or Low Down payment to purchase the home. This is done by working directly with the seller of the house, and hammering out a deal between you and the seller.

That means, no banks, no credit checks and no qualifying! Of course, not every seller is going to be open to the idea of flexible terms for you, so it would be a good idea to work with motivated sellers.

Working With Motivated Sellers
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Although these deals are more difficult to find, they are out there and they exist. You just have to know where to find these deals. Many of these deals can result in no down deals if you offer the seller something that they desire. One such item is the sales price. Offer to pay maximum dollar before repairs to entice the seller to offer you good terms for buying the property.

While other investors come by and offer them low-ball insulting offers, you might get the nod for coming out and offering a better deal.

Remember, these people are in distress some how, and if you put together a fair offer for both parties, you may get the property at a really good price.

Has your loan been "sold" before?

Have you been surprised to find out that your loan was "sold" to some other lender after you closed?

This happens often and for some of you, many times on the same loan! Did you panic? For 99.99% of those transactions, it is not a real big issue. I will attempt to simplify it and explain:

Virtually all mortgages get 'sold' back and forth between lenders and off Wall Street. When you get a mortgage and it closes, the lender that 'originated' your loan often is not equipped to 'service' the loan... or collect payments every month. When you make payments, most borrowers think the lender is making all that interest. They are not. Mortgage loans are 'bundled' together in blocks, most often in the millions. Those bundles are bought and sold on Wall Street as mortgage backed securities (bonds).

The interest rate spread (profit) is most typically less than 1% and in fact in greater than half of them, it is less than 1/2 of 1%! So and lender would have to have a whole lot of mortgages to be profitable at just 1/2 of 1% profit... right?! But over the term of the loan