Are you purchasing house for the first time? If yes, then it is obvious that you will not know all the different options that are available for mortgage loans. A first-time home buyer finds it difficult to search for the best home loan that will fulfill his requirement. You are not only dependent on the bank or the lending institution who is offering you the home loan but also on the loan amount that you require to take out. The mortgage broker will help you get the best offer on your home loan. You can use one of many free resources to calculate how much house you can afford before you may decide to take out a mortgage loan. Make it a point to talk with the lender face to face and ask him all the necessary questions about the home-buying process.

Search for a lender with whom you can talk

The banks have the bad reputation of not picking up the phone when the customers call them. You may have a question regarding the interest rates that will be charged on your mortgage loan. For this, you’ll have to talk with the loan officer and make sure you get the answer of every question that you ask them. You should know that the loan officer will try his best to maximize the bank’s profit rather than offering you benefit. Get in touch with an experienced mortgage broker and know about how the mortgage loan process works.

Avail better interest rate

If you are taking out a $250,000 mortgage at an interest rate of 4%, then you will have to pay $10,000 in a year in interest. However, if you get a loan at 3% interest rate, then you’ll have to pay $7500 in a year. Thus, you will be able to save almost $38,000 in interest rate over a 15 year period. It is seen that a small percentage point may make a big difference. There are several mortgage brokers online but it is best to choose a broker who has good relationship with the lenders so that you may be able to get the best deal.

Look for a broker who will work for you

The mortgage brokers are appointed by you and they are paid only when they complete the transaction process. You will be able to take out a first mortgage or a second mortgage to purchase your dream house and repay your debts. They will be able to help you out know the amount of money you need to spend on a home and get pre-qualified before you shop around to buy a new home. This way, you will not have to face any unnecessary trouble when the bidding wars begin and when you know what your budget is before you search for homes that are too costly.

The role of a mortgage broker

When you decide to purchase a house, a mortgage broker may help you refinance your present mortgage or take out a second mortgage. A mortgage broker is usually paid once the deal gets completed. They’ll provide you a broad choice of different lenders and interest rates so that you may be able to get a better deal. Your savings will differ depending upon the amount of mortgage loan you may take out.

So, you can see how the mortgage brokers can help out the first time home buyers to get the best home loan. They have more experience than a loan officer and so, they’ll be able to help you take out the right mortgage loan as per your requirement.

“By Andrew, a financial writer who has profound knowledge on the contemporary financial world. He loves to contribute his articles to various financial communities, websites and blogs.”

Down payment money
Image by Ninja Bob via Flickr

Zero down? Why would a seller want to walk away from closing with nothing? Well, they wouldn’t, and that brings up the most important point about real estate investing with no down payment: The seller almost always needs cash at closing, but it doesn’t have to be YOUR cash.

A Zero Down Example

I’m selling a small rental property right now, with payments of $400/month. The buyer has a good credit report, and the $5,000 down payment covers closing costs and even a foreclosure, if necessary. So at this point, I don’t care where he gets the down payment. A $6000 cash advance on a low-interest credit card for example, would cost him about $135 per month, and give him enough for the down payment and his closing costs.

In this case, with rent around $600 per month, he would be okay. In some cases, however, that extra $135 might cause negative cash-flow. So be sure that however you do it, the numbers work. By the way, I would have set the payments at $350, if he had asked, because it’s the price and the interest rate that are important to me.

Other Zero Down payment Methods

While there are sellers (like myself) that are able to offer terms and low down payments, usually you have to find a way to get at least 70% of the price to them in cash. Think in terms of how to get a primary loan, then how to raise the money for the remainder. A couple examples follow.

Some banks still do “no doc” loans, meaning they don’t require verification of income, source of down payment, etc. They generally loan only 70% to 80% of the property value, but if the seller is willing to take a second mortgage from you for the other 20% to 30%, you are in with no money down. The seller gets 70% or 80% in cash, plus payments for years to come. You’ll have two payments, of course, so be sure the numbers work.

You can borrow against your home or other property to come up with down payment money. If you borrow for a “vacation,” and leave whatever you don’t spend in your checking account for a while, you can use it without violating bankers rules about borrowing for a down payment.

Even if you live in a small town, there are usually a few “note buyers.” These are investors that buy land contracts, mortgage loans and other “notes” at a discount. If a seller takes a purchase money mortgage from you for $100,000, for example, a note buyer might pay him $85,000 for it. So how does that help you or him?

An example: A seller prices his property at $195,000, and expects to sell it for $180,000. You offer $205,000 in the form of a mortgage  for $160,000, and another for $50,000. You have arranged for the sale of the first mortgage at closing for $136,000 to a note buyer. The seller gets that cash now, plus payments from you on the second loan for $50,000. Notice that this adds up to $186,000, which is more than he expected to get out of the deal.

These are just some of the ways you can buy with zero down. Real estate investing is about making the deal work for all parties. Find a way to get what you want, and get the seller what he wants. That is more important than having big cash on hand.

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The Ultimate Introduction to Real Estate Investing

If you are thinking of jumping into real estate investing, are just beginning, or are a seasoned real estate investor, you’re sure to find something new in Ken McElroy’s The ABC’s of Real Estate Investing, a Business Week #1 Best-Seller.

In The ABC’s of Real Estate Investing, Rich Dad Advisor, Ken McElroy, shares with you his hard-earned real estate investing knowledge gained from over 25 years as a professional real estate manager and mogul.

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  • Achieve wealth and cash flow through real estate
  • Overcome the myths that are holding you back
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Your success in real estate DEPENDS on making smart decisions – before you buy and after. Whether you’re renovating for a flip, getting involved in rental housing or have other plans for your investment you NEED to know what the experts know.

Don’t fall into a money pit or fail to count the cost before you buy, find out right now…

How to Invest in Real Estate
(and Not Move Into the Poor House!)…

* Where Can You Find a Real Estate Deal?
Find out how the experts get such great deals – and beat them to it!

* Compare Similar Properties for Investing
Learn how to compare properties so you pick the RIGHT one!

* How To Find a Motivated Seller
The secret to getting a great price is finding the right seller, here’s how…

* How to Create Great Newspapers Ads for Both Buyers and Sellers
Marketing skills are part of the process; learn how to create appealing ads that attract attention.

* How to Get a Property Appraisal
Start your business right with information on property appraisal.

* Learning the Basics of Real Estate Contracts
Never read the find print? It’s essential – here’s an overview of how the contracts work so you don’t get scammed!

* Why You Need to Have a Property Inspection
Don’t let your enthusiasm get in the way; take the time to plan properly so you really know what you’re buying.

* The Difference Between Assumable and Non-Assumable Mortgages
Trying to work magic with the financing? Learn about mortgages these type of mortgages and you might find a way.

* When Should You Renovate an Investment Property?
Before you spend a ton of money on your property, find out when renovating is a good idea and when it’s just a waste of money.

* When and How You Should Form Real Estate Partnerships
Thinking about joining forces with a friend? Protect yourself from problems and grief by going over this information first.

* The Pros and Cons of Investing In Apartments and Multi Family Properties Know both sides of the investment question before you put your money into it.

* How To Invest With Bad Credit
Don’t despair – it’s really possible!

What You’ll Also Get…

* Determining Your Operating Expenses
A wise investor wouldn’t forget about this aspect of business – if you don’t have a clue about the cost of investing this is for you!

* Computing Real Estate Returns Just how much will you be getting? Can’t wait to figure it out? Here’s how…

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