California Mortgage

Investing In Real Estate - I would like to start buying houses to rent out, so how do I get into real estate investing? I hear stories about many people making lots of money from investing in real estate, how do I get started? Is investing in real estate really that safe? Can anyone become a real estate investor? These are some of the most common questions asked about investing in real estate and they are asked by everyday ordinary people just like yourself. Real estate investing can be very rewarding and provide for a great retirment down the road if done properly. You must put some time and effort into a successful real estate campaign just like anything else you would like to succeed in. You have to first research the properties and their values, be able to accurately estimate how much if any work and money will need to be put into the property to make it acceptable to rent out, and you will also need to go through the task of finding good, responsible renters for your property(s).Consult your CA mortgage broker to find out how to get started into buying rental properties and how you can begin qualifying for non-owner occupied properties.

A very important step in investing in real estate is to find a loan officer who will help you obtain financing for your investments. You need to work with somebody who shares your goals, and wants to help you succeed. You should develop a long-term relationship with a loan officer you trust. Call me today at (866)-429-REFI ext 707 to discuss what I may be able to do to help.

When searching for investment properties to purchase remember these guidelines -
- the rent you collect should cover your mortgage payment plus maintenance and have enough left over that you can afford if your property is vacant 2 to 3 months per year, on average.
- the property should be in an area that is appreciating in value.
- any investment property you choose should not be one of the most expensive in a neighborhood. With other things being equal, the lowest price property in a neighborhood will appreciate more quickly that the most expensive.

Don't quit your day job. If you plan on obtaining financing for your rehab/investment properties, remember lenders are going to want to verify your employment. Once you decide to start investing, establish a Limited Liability Company. In two years, you will be able to verify self employment.

Prepayment penalties - You typically have the option of choosing a prepayment penalty. You will normally have better interest rates if you choose to have a prepayment penalty. However, choose carefully as you never know when you will have to or just want to refinance or sell your home. Prepayment penalties can be hefty and can be avoided.

There are both "soft" and "hard" prepayment penalties. The "soft" prepay allows you to sell your home and not pay the penalty. The "hard" penalty is enforced anytime more then 20% of the balance is prepaid in a year in the first 5 years. Sometimes the length of time is less.

A prepayment penalty is generally 6 months interest.

Always ask if the rate you are quoted has a prepayment penalty. Your mortgage professional should disclose this when you are quoted a rate. At the closing table is no time to learn about a prepayment penalty.

If you are planning on staying in your home for three years or more, a prepayment penalty will help you obtain a lower rate. By agreeing to keep the mortgage for the term of the prepayment penalty, the lender will provide you with a lower rate.

Will my mortgage be sold and why - When you refinance or secure purchase mortgage financing on your new home chances are it will be sold to different mortgage companies over time.

When you obtain a mortgage, your mortgage lender will have the right to sell or transfer your mortgage as they so choose. None of the original terms of the mortgage loan can change. The only thing that will be different is who you make your checks out to each month and where you send it. You will sign a servicing disclosure form at closing explaining the lenders guidelines on selling and transferring mortgages and how often they have done it on average, over the past 3 years.

When the holder of your mortgage changes, so will the mailing address for your payments. Lenders are required to notify you of the change but don't depend on them alone: any late payments will still be counted.

Lenders will sell your mortgage for the loan amount plus a little extra. Then they take that money and provide a mortgage for another homeowner. Then they repeat the process again.