Insurance and Credit

It’s not cheap to work on your house. The costs for buying construction supplies, hiring a qualified work force and paying the various fees for permits can quickly add up.

You could borrow cash from a bank to help pay for all the work, but banks always expect you to pay back not only the loan, but also the interest. A $10,000 bathroom remodel may actually end up costing you $15,000 by the time you’ve paid back all the interest. Instead of going for a bank loan, why not look into some of those credit cards offered by the larger home improvement store chains? As long as you have decent credit and a plan to pay them back, it’s usually an option worth considering. Those credit cards have several distinct advantages:

Zero Interest for a Limited Time: Many of those hardware store credit cards give you a period of 6 to 12 months with zero interest charges as long as you use the credit card in their store. Those savings could add up to big money if you are able to pay back all of the amount you borrowed on the credit card. Even more importantly, big stores like Lowe’s Home Improvement stores may have multiple credit cards available for your unique personal situation.

Big Store Discounts: Hardware store credit cards often give you sale prices on items you buy or services you contract through the store. You might save 3% – 10% on the total cost of the project, which could be a pretty good chunk of money by the time you’ve added it all up.

All-In-One-Solution: There is something to be said for buying all your home improvement supplies for a specific project from one store. Instead of visiting a dozen stores to find a refrigerator you can go to one store and buy a faucet, a sink, a refrigerator, all the cabinets and even hire and schedule the installers all at one time. You don’t need a big hardware store credit card to necessarily do this, but things do seem to go much smoother this way.

These hardware credit cards can end up being a win-win for both the customer and the store. The store sells more inventory and makes more profit while the customer is able to “borrow” more money to make home improvements without having to pay any interest for a limited time! A limited time of no interest payments, possible discounts and the ease of ordering everything in one store makes those large hardware store credit cards a pretty good idea in many cases!

Using the services provided by a Temecula home mortgage broker offers an advantage in securing a loan to purchase southern California real estate. Continually fluctuating real estate prices cause uncertainties in the market and can be confusing for a potential buyer. By using a professional mortgage brokerage service many questions about the latest market pricing in a particular area can be answered and discussed with the buyer. A Temecula mortgage broker will be familiar not only with the latest interest rates and loan companies but will also be familiar with comparable sales in the area.

A real estate professional is different from a Temecula home mortgage broker in the sense that the real estate rep’s responsibility is to simply show properties that are to the liking of a potential buyer. A mortgage broker handles the details of all financial aspects of the sale and when in need of a loan, a mortgage broker is also the person to assist you. Purchasing a new residence is a major move. All of the paperwork and financial matter can be very time consuming but by seeking out the help of a mortgage broker, you can easily focus on the moving and resettling part because the mortgage broker can handle the rest for you.

Many lenders need to have extensive credit information when you ask for a loan making the approval process time consuming. With the help of a mortgage broker, you can get pre-approval easily and can make a deal quickly with your real estate agent.

Establishing a relationship with a Temecula mortgage broker rather than working with a firm in a different area is beneficial to the buyer. There are many aspects of granting real estate loans that are regionally specific. For instance, certain properties for sale in neighboring Orange County, California are assessed a special tax. The property for sale in Riverside County includes specific tax implications that could affect the monthly payment on a loan or create a tax burden on the buyer that exceeds their financial limitations. The mortgage broker will provide advice and relay the full commitment required for the real estate purchase.

A Temecula mortgage broker provides assistance in financing new loans as well as refinancing existing mortgages. Working closely with a selected broker will ensure that all possibilities for a new mortgage are considered. The broker can suggest several options and recommend the appropriate loan company that suits each client’s needs. The time spent with a mortgage broker will ensure future financial success.

Buy Notes – Do You Know Your Borrower?

I just got off the phone with the Sr. Vice President of a California bank in charge of note sales, and a note broker friend of mine who set up the call.

The Sr Vice President advised me that they had 3 non performing notes that were commercial loans in the LA area.

Communication with Your Borrower, a Lesson on Buying Notes

Keep listening…

So the SVP told me that one of the loans has a foreclosure sale scheduled 2 weeks from now.

The bank had not been in contact with the builder/developer (borrower).

I asked her if she was worried about possible problems when taking over the properties through foreclosure. And if she had any other concerns regarding the loans.

She let me know that the bank didn’t have too many concerns because the property values were enough to pay off their debt.

My Concerns With Buy Notes Situation

If there’s one thing I’ve learned in this note buying business, managing the relationship with your borrower is key in 60% of all cases.

And if you don’t work with your borrower, then you’re really hurting your chances of getting out of a note deal.

This is why…

There are basically 5 Exit Strategies in Note Buying:

foreclosure, refinance, short sale or deed-in-lieu, note sale, and reperformance.

Foreclosure and note sale are the only 2 exits that you can do with no communciation to your borrower.

In this example, the bank has chosen foreclosure as the exit. But the time it could take to recover the property can easily be postponed, if the borrowers file for bankruptcy. This is one of the risks associatied with foreclosures.

Tip on Buying Notes

Make fantastic returns when buying notes without having to foreclose or to sell the note on to someone else.

So if you lose contact with your borrower, you are essentially killing about 60% of your note buying exits. (3 of the 5)

Would any professional golf player get only a course with 5 out of their 12 clubs?

Would that be somewhat limiting to their game?

I’m pretty sure of it.

It sure would be entertaining watching him hit a putt with a 9-iron.

Much as it can be painful or unappealing to some of you – working WITH your borrower is essential when you buy notes.

This is the same advice that I shared with the LA bank today.

I will be tracking her non performing notes so see if any of them end up in bankruptcy. Then we will know if she took my advice.

And if the notes do end up in BK, I am pretty sure that she will be regretting the fact that she lost communication with her borrowers.