Investment Mortgage Guy

This is a FREE all day workshop designed for the new and seasoned investor. This event will feature a full panel of experts in the area of financing, tax, law, 1031 exchanges, financial planning, rental management, insurance and much much more. You will leave this day will real tools to integrate into your investment plan as well as some excellent profesional contacts for your rolodex. Six hours of real estate continuing education have also been applied for.

Featured speakers will be as follows:
Rob Bonahoom Mortgage Coach
Greg Nelson CPA
Jeff Peterson 1031 Specialist
Matt Engel - Attorney
Adam Hartung - Certified Financial Planner
Brent Mohlenhoff - Insurance
Nina Haugen - Rental Management
Bruce Zimmerman - Rent Collection
Peter Fanucci - Credit Lines

This event will be held at the Bloomington Center for the Arts Building at 1800 Old Shakopee Road.
To register contact Rachel Knaak at 952-808-0042 or rknaak@houseloan.com

Do you own several rental properties but sometimes wonder what the real financial benefit of real estate investing is going to be? Are you thinking about investing for the first time but unsure of the right game plan? The Financial Freedom seminar is designed for the individual who is interested in zeroing in on a clear goal with their rental properties and the fastest way to real financial freedom. This is truly one of the most important seminars of your real estate investment career.

To register contact Rob Bonahoom @ 952-808-2820 or rbonahoom@houseloan.com

Maybe you don’t own any investment property, but have heard about the tax benefits of owning investment real estate. Otherwise, maybe you own a property or two, but don’t feel like you are getting all the tax shelters that you can. Our CPA, Greg Nelson, will be explaining how to organize your business and yourself to maximize your tax deductions easily and quickly. He will talk about how to take advantage of the tax shelter even if you “make too much money” to claim much or any depreciation. Come see how to write more off and put more money each year in your pocket.

This seminar is geared for both the newer investor or the investor that feels like they need some help in different areas, and much more! This will be a workshop format to allow you time to get your questions answered in a group setting.

Register for the seminar by filling out this quick seminar registration form or call 952-808-2820 for more information.

Investment Guru Scott Ficek hits the nail on the head with this great article on screening tenants. Read these common sense tips that most landlords overlook

http://www.minnesotainvestmentrealestate.com/tenants/calling-all-landlords/

Indymac Bank has been working hard to keep homeowners in their homes If your mortgage is about to adjust and your with Indymac Bank, you may qualify for a loan modification that could lower your interest rate to 3% Here are some factors that will help you qualify:
1) You need to be at least 60 days late on your mortgage
2) You need to prove you make enough income to afford the payments yet not make so much they can’t justify lowering your rate
3) You will qualify easier if your interest rate is currently adjustable

I think we will see many mortgage companies following suit like this in the near future

Rob Bonahoom
Mortgage Coach
952-808-2820
Rbonahoom@houseloan com

What does Fannie Mae, Freddie Mac, Lehman Brothers and AIG have in common?

They are all suffering huge unforseen losses from mortgages that are going delinquent. Add a major housing slump, a hint of recession and a dash of credit crunch and you have a recipe for disaster in the mortgage world. For years, borrowers who fell behind on mortgages and bills tapped their good friend Mr Equity to bail them out of trouble. Their homes were turned into ATM machines and coverd up some real fundamenal issues for many Americans and their spending and saving habits.

But the little guy isn’t the only one to blame. Mortgage Brokers bloomed on every street corner helping the average guy tap his Equity Tree, assuring him that the lower payments will definately save him from his troubles.

But then of course we had the wholesale lenders who encouraged the broker to be extremely agressive in originating loans. They created loans products that made no common sense but since everyone was doing it, it seemed ok.

And don’t leave out Wall Street, who rated these bonds very high since they had a low default rate for many years. They cut too many corners on underwiting the true risk of these loans, lining thier pockets with the profits.

So back to my question, how will the bankruptcy of Lehman brothers affect your mortgage? If you have a mortgage now and never get another one. You will be fine. It shouldn’t affect you very much. If you will need another mortgage down the road, don’t get freaked, but be prepard to demonstrate your ability to repay. The loans of the future will require complete background checks and a solid credit rating. Provable income and asset reserves will also be required. You can also expect them to be tough on your collateral. But hey - what do you expect when this mess is going to cost billions and billions to America.

Written by

Rob Bonahoom
Mortgage Coach
952-808-2820
rbonahoom@houseloan.com

Have you always thought about buying investment properties?  Attend this FREE one and a half hour seminar. There is no charge at all, no contracts you sign with us, no consultation fees, no hidden agenda. This seminar is an excellent opportunity for you to learn more about our process and meet a team of investment real estate professionals that can guide through the finding, financing, buying, renting and owning your first investment property.

Register for the seminar by filling out this quick seminar registration form or call 952-808-2820 for more information.

For the first time in history, most lenders are taking requests very seroiusly by their borrowers to have their loans modified. A loan modification is where the bank adjusts your rate and terms to something more favorable for you without having to do the tradional refinance.There are several factors that have caused banks to take a hard look at this. First, the average foreclosure costs about $58,000 for the bank to execute. If the bank has to do a loan modification that costs them $25,000 long-term and they rebuild loyalty with that customer, it’s just makes sense for the bank to look at it. Secondlly a lending instituition recieves a black mark on the books and has to keep a certain amount of reserves available for every foreclosure they have. This is a huge incentive to limit the number of foreclosures they keep in their porfolio. Finally the government and politcal opinion has shifted dramatically to helping people stay in their homes. An organization called Hope Now (1-888-995-4673 or WWW.HOPENOW.com) was formed to education people to contact their lender to re-negotiate terms that are affordable to them.

I have been a mortgage banker for 13 years and until 2 months ago, I have never seen banks willing to do this. In fact, a wholesale company that I brokered 28 loans though 2 years ago recently contacted me and asked me to call all my past clients and wants modify all 28 loans from the option arm product they have right now. They are worried that down the road the borrowers may not be able to pay.

So loan modifications are happening, who qualifies and how do you get it done effectively with your lender?

The first step is to contact your lender and request to speak with the loan modificatin department. Explain to them your reason for needing your loan modified.
All banks will require you to do the following:
1) Fill out a financial statement.
2) Provide your most recent tax return and W2
3) Provide a current pay stub
4) Provide a most recent asset statement.

Follow up step - Call them once per week until you hear something back. The squeaky wheel gets the grease. I recently had a client get both his option arms modified to a 5% rate - 5 year interest only loan. It took 3 months of diligence and phone calls, but it happened. He is thrilled!

Tip on Qualifiying- Every bank is going to have a slightly different qualification policy but in general to qualifiy for a loan moficiation, you want to show the bank you are able to make your payments but not have so much extra cashflow each month that they know you will never default. It’s a little bit of a cat and mouse game but lenders have come a long way to streamline the process.

There is hope out there is your feeling a pinch with your current mortgage terms. So intead of worrying about it every night, roll up your sleeves and get busy!

Lending sources continue to tighten guidelines throughout 2008 on investment property financing. Wall Street investors that lend money to create mortgage backed securities on the secondary market provide mortgages for individuals to invest in real estate are sitting on the sidelines. Only two companies are left lending right now -  Fannie Mae and Freddie Mac. Recently both companies have seen their stock prices plummet however, the government assures us that these companies will remain financially sound to lend or they will step in to help. Without these two institutions making mortgages, as a real estate investor your last alternative would be to get financing on a short term arm basis at your local bank.

In order to ensure only high quality loans are originated from this point forward, underwriting standards have sharply increased. There were several factors that changed this year. First, the down payment required on an investment property changed from 10% to 20% down. This has restricted a number of investors from entering the market to buy more properties. They simply don’t have enough cash reserves required to invest. Secondly, credit standards tightend. A 680 credit score is now minimum standard to qualify. Other changes include the number of financed properties owned by an investor.Freddie Mac lowered the number to 3 investment properties per individual and rumor has it the Fannie Mae will soon follow.  Cashout and seasonng guidelines (the length of time an investor has owned the home before they can use the appraised value) were also changed by Freddie Mac. Fannie Mae has not yet made the change.

I believe we are heading for tighter guideliinesyet to come until the housingmarket turn around, If you qualify today, you should seriously look at buying before you potentially get squeezed out. There are less buyers and more opportunties!

Rob Bonahoom - Mortgage Coach - “We help Regular People Build Wealth in Real Estate”.

I have been helping investors with their rehab financing on investment property for over 10 years. During this time, I’ve seen the banks both ease their underwriting guidelines and get very strict on what kinds of loans are acceptable to them. In our current market, local banks are more conservative than ever on what kind of loan they want to put on their books.

Here are some standards I have found in today’s market when looking for a rehab loan that will probably be required to have your loan approved by the bank.

1) 20% of your loan amount needs to be out into escrow in case a problem arises during the rehab process. This deposit is returned to you when the property has been fully renovated and the construction loan is paid off with permanent financing.

2) A debt to income ratio of less the 50% is required. Take your current gross income on your pay stubs and divide that by your monthly long term debt obligations like your mortgage payment, the minimum payment on your credit cards, car loan payments and other debts you may have with 10 or more payments left. Insurance and utility bills are not considered. You also need to take into account the property you are going to buy. Lenders will use 75% of the projected rental income of the property (even if the property is not currently rented) and subtract your payment for principle, interest, taxes and insurance.  A positive number adds to your income and a negative numbers adds to yoour debts. Self employed individuals will need to take a less agressive stance on the write offs in their business or they will find themselves unable to qualify for a mortgage. Lenders with take the net profit or loss from the business and divide that numbers from your current debts.

3) Your credit score needs to be  least a 680. Credit scores range from 450 to 850. A 680 score probably means your credit cards are paid down to at least 40% of the maximum balance available and you have had no late payments in the last 12 months.

If you can get through those toughbarriers to entry, the program can really be an effective way to acquire some great properties with low money down.

I wish I was starting out today buying properties. The deals are great and the cash flow is even greater.

Rob Bonahoom - Mortgage Coach - “Helping People Build Wealth Through Real Estate”