Currently foreclosures are skyrocketing in Michigan due to the drop in real estate values. Habitancy who borrowed in order to buy their house are now owing more on their homes due to the total worth of their home declining.
For those who have received low-interest-rate mortgages (Arm) in the past are now having there Arm addition interest rates which in return increases the monthly payments. The monthly payments are getting too high for some to handle. The current situation is a real estate investor's dream. Real estate investors are now about to get homes very reasonably, but in order to do this the investor needs to have fast money.
The retort to this qoute are "hard money" loans. They do not require wage or reputation checks. The loan is given on Ltv which is Loan-To-Value ratio of the property. These hard money lenders usually lend up to 75% Ltv. If you are planning to buy these houses in order to "flip" them, lenders will let you buy the property and will give you extra cash for renovations. For a Michigan speculation property, these hard money loans only go up to 50% Ltv due to the economic times of the state.
Many deal properties will be found at auctions which requires the purchaser to pay a deposit of a division of the house when the operation is won. After it is won and the non-refundable deposit is made you will have about a month- 30 to 45 days to pay for the property; most likely by getting a mortgage loan. Accepted mortgages usually take longer than the 30-45 day range and this causes the bidder to lose their deposit made at the auction.The great thing about hard loans is that you can usually get them within a week or two. Thus, hard money loans are what most investors do unless they are wealthy.
Hard money loans are not made by banks. They are made by inexpressive investors so it's important to have a mortgage broker. They will be able to work in the middle of you and the lenders so that they have good working relationships. At the end of the deal the mortgage broker charges a percent estimate of the loan obtained. The only price that you personally will need to pay is for the property appraisal.
If you are looking to "flip" a house use "hard money" loans and make sure to have a great Mortgage broker to help you along the way.
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