Subprime Mortgages Make a Comeback

Subprime Mortgages Make a Comeback

During the market downturn, subprime mortgages made headlines as the reason why the market was dropping. For those that don’t recall exactly what a subprime mortgage is:

subprime mortgage is a type of loan granted to individuals with poor credit scores (640 or less, and often below 600), who, as a result of their deficient credit histories, would not be able to qualify for conventional mortgages. Because subprime borrowers present a higher risk for lenders, subprime mortgages usually charge interest rates above the prime lending rate. — Investopedia.com

After the housing market plummeted, subprime mortgages essentially disappeared and new regulations were put into place. Since then, they’ve made a reappearance, but under a different name – nonprime. Although there are some new standards in place, it largely boils down to being the same as the subprime loans from pre-2008.

Lending Requirements Relax

In the summer of 2017, Fannie Mae announced that it would loosen the restrictions on its lending for loans. This meant that borrowers with higher debt and lower credit scores were able to acquire loans without the previously instituted risk management methods. As a result of these new changes, there’s higher demand in mortgages and a larger number of people with high debt ratios (the debt-to-income limit increased from 45 to 50 percent) are obtaining loans for new homes.

Because the market is still bullish and the rents are increasing, more and more renters are looking to convert into homeowners. However, in some cases, they would not have otherwise been able to acquire these loans because of their debt to income ratio. Additionally, there’s a particular subset of people who have lived the life of living on debt with the (partial) purpose of being mobile and flexible with their living situation.

Who Carries The Debt Now

Since the restrictions on acquiring loans have relaxed, the one group that is pursuing new homes is the Millennials. As the largest home-buying group today, they have a much higher level of debt than previous generations, due largely in part to student loans. Additionally, homeowners that were affected by the previous market crash are still plagued by low credit scores and were still unable to get the mortgages they wanted. Now that has changed and they’re able to get these new nonprime loans, essentially recreating the same group and problem as the last market dump.

What Changes?

Regardless of whether a homeowner had a prime loan or is under a nonprime loan, a foreclosure or tax situation can still happen to anyone. If the day comes when a homeowner is no longer able to afford a mortgage and risks losing the property, it’s always best to sell it and retain some percentage of the equity in liquidated cash vs losing it entirely to an auction. As always, we remain available to those that want to get out in front of situations like that and keep some cash in their pocket.

 

Check out our homepage (https://www.homebuyerhouston.net) for more information about selling your house or news with the current real estate market trends.

 

Home Buyer Houston
10660 Fallstone Rd Suite C, Houston, TX 77099
(832) 900-7857

The Benefits of Working with a Home Investor

Why Work with an Investor

There’s a fast and easy way of selling your house today. It’s not the traditional way in which you engage the service of a realtor. Instead, you work with a home investor. They go to your house, make an inspection and offer you a deal. You don’t have to wait long or do anything with the house. They will buy it just the way it is.

Home investors are quick to give you a buy offer, but you have to realize that they don’t offer the highest price for your house. What they offer is the best price you can get in the shortest possible time. They then fix the house, physically and legally, and then resell it.  Here are the benefits you can get when dealing with a home investor:

Sales Deal Closed in 24 Hours or Less

Home investors usually offer a deal within 24 hours after inspecting the property. Sometimes offers are made immediately after a quick inspection. But you don’t have to accept it if you’re not comfortable with the price offered. You can still make a counter-offer or refuse the deal. What’s important is you don’t have to wait long for an offer.

House is Bought “As-Is”

This is one of the major benefits of selling to a home investor. You don’t have to do extensive repairs to make the house look presentable. Even legal issues will not discourage the investors from getting the house off your hands. You won’t get the market price but you’re free from facing the expensive repairs and legal problems.

You Receive Cash after Deal is Closed

Sales made thru bank financing take a few months before homeowners can get the cash. There are also instances where buyers will back out after weeks or months of negotiation. But with home investors, the cash or the check is handed almost immediately after sealing the deal.

You Save On Commission Costs

Realtors typically charge a commission fee for selling your house. It’s a necessary expense in the traditional real estate sale. But there are no commission fees when working with home investors. Realtors are merely agents of the buyer while home investors are the actual buyers.

A Better Alternative to Foreclosure

When your house is on the brink of foreclosure, selling to a home investor is a viable solution. Instead of having trouble keeping up with the mortgage payment, you get cash instead. There is also the chance that the home investor will let you rent the property. Losing your home is not easy but at least the cash can help you get back on your feet.

Home investors are faster than the traditional realtors in closing sales. The offer price is definitely lower than the market value but you don’t have to wait too long for it.  Deals are closed after one day or less and you receive the payment in cash after the signing of documents. Since you are dealing with direct buyers, no commission fees are paid. Selling to home investors could also save you from foreclosure and the legal troubles it brings.

Home Buyer Houston
10660 Fallstone Rd Suite C, Houston, TX 77099
(832) 419-7722

Benefits of Selling a Home “As Is”

No Repairs Needed No Hassle

When homeowners find themselves on the horrors of putting their houses on sale, they opt for an easier way to pocket their profit. And investors have all their hands on deck when it comes to buying your homes “as is.”

Homeowners want the optimal price of their houses without putting the extra muscle in improving its current condition. No warranties or representations – this is the banner for selling homes “as is.” But other than that, there are more benefits to marketing properties under this bargain.

No Big Repair Costs

Houses are vulnerable to rot and repairs as time passes. This calls for higher maintenance and pricey improvements, especially for the sellers. But putting the property “as is” in the investors hand will limit these repair costs. However, known defects or faults inside the house should be disclosed on the buyers.

Estate Sale

Most sellers follow the “as is” approach if they have estate properties. Truth be told, these homeowners will be devoid of any information about defects or major repairs in the house, which adds burden on their part. In case division of inheritance is too complicated, siblings rely on selling home “as is” to divide proceeds easily.

Avoiding Construction Days

If the costs do not worry homeowners, at least what gets in the nerves of renovations are the big construction periods. The working days to fix your bathrooms and kitchen might not be fun as you think. For the duration of improvements, there will be big debris scattered in the house and dust everywhere. And yes, at the backdrop is your family doing their everyday activities.

Fast Cash Flow

Home investors are most likely to get your offer even with no contingency in home inspection. Since they quote homes in cash payment, expect them to push the worth below the property’s market value. That is one tactic to pull multiple buyers into your graces. In lieu of this low-priced offer, buyers are willing to accept the property with the burden of possible improvements.

Little Home Cleaning Needed

To amp up the value of property, homeowners go into deep clearing out of stuff that they have invested for a long time. But not all sellers have the capacity to even go frenzy with organizing and pulling out their belongings. Unbeknownst to some sellers, buyers are willing to take the tough job of improving the state of your homes. For them the conditions are not upsetting, but an added value for the home.

Real Talk

In the customer’s mind, selling a home “as is” might produce an unsettling feeling. What is wrong with the home? Although the benefits outweigh the disadvantages, past homeowners might still be liable for possible defects in the conditions of their homes. Nonetheless, they are obligated to disclose issues such as faulty wirings, plumbing defects, and smoke and heat detectors to future buyers.

In spite of the remodeling costs, the “as is” approach is a desirable deal for homeowners who want fast-cash flow on their property and for buyers who do not mind shouldering additional costs or “fixer uppers.”

Home Buyer Houston
10660 Fallstone Rd Suite C, Houston, TX 77099
(832) 900-7857

The Advantages of Cash Offers for Your Property on Sale

Getting Quick Cash Offers for your House

Homeowners looking to sell their property should think twice before saying no to a cash offer. The first instinct may be to want to sell through financing because they stand to make more money, but with the current state of the property market, it might not be as easy to find buyers. This means you might not be getting as many other offers soon, so why risk leaving your property unsold for a longer time?

Beyond the possibility of finally putting your home out of the market, there are other reasons why a cash offer is a great deal for property owners.

  1. Sure Buyers

Sometimes, everything goes out great. Prospective buyers come and love your place, you negotiate a price and agree. The buyer sets an appointment at the bank and maybe something comes up. Maybe they are unable to get the loan or have to accept unfair terms.

Whatever the reason, the sale does not push through, after investing a lot of time and effort. But if you get someone willing to pay cash, you know that they are serious about purchasing and that their decision cannot be changed by external influences. They will be less likely to back out, which is perfect if you are looking to move out-of-state or really want to dispose of the property immediately.

  1. No More Renovations

Most cash buyers will buy the home just the way it is. Not only is it better for sellers who are about to be foreclosed, but it is also more attractive for sellers who have no time nor money to fix the place up.

  1. Avoid Seller’s Rut

If your property has been on the market for a while, then you may be doing something wrong, or at least you may have to improve on specific aspects. It may also be because you are limiting cash buyers from purchasing it.

  1. Sell Quickly

Cash buyers do not need extra steps like applying for a loan and submitting documents for approval, among a lot of other paperwork requirements. There are also no more inspections required. This is a perfect option for those who do not want to spend a lot of time and effort meeting a lot of other interested parties. Once you get a cash offer, you can choose to accept it and be done with the whole process altogether.

Sometimes, homeowners simply receive a few offers, both on a cash basis and not. It might then be tough to decide which one to go for. Unfortunately, there is no one option that is infinitely superior so you would have to weigh the positives and negatives.

In the end, you would also have to look at your needs and preferences. For example, families who are a bit more flexible in terms of selling the property may find financing buyers better. On the other hand, those who are in a hurry like those facing foreclosure will find cash buyers heaven sent in helping close the sale. But having both options gives homeowners the advantage of finding the best offer for their property.

Home Buyer Houston
10660 Fallstone Rd Suite C, Houston, TX 77099
(832) 419-7722

Why Sell Your House Just Before a Foreclosure

Sell Your House before a Foreclosure

It is truly a hard decision for many homeowners to have to say goodbye to their homes due to an impending foreclosure. Unfortunately, the real estate crash and the downturn of the economy have led to many property owners suffering financial distress and at risk of losing their houses. Foreclosures are also not at all beneficial to property owners, so being able to avoid them will be good for their credit standing.

An option to avoid a foreclosure is to sell the property in a short sale. The house will be put on the market with a huge discount, less than what the homeowner owes the bank. While this does not save them from the debt incurred, it will cover most of it. There are also other reasons why this is a better option (not to mention you get a cash offer rather than having to wait for your buyer to get approved by the bank):

  1. Protects Your Credit

A hit on your credit score can really affect you many years down the road. This is why avoiding any damage is important. Thankfully, many banks would also like to recover as much as possible in the case of the lender really going through financial hardship, which is why selling the property at a lower price is more acceptable.

  1. Prevent a Foreclosure

It is not just homeowners who lose out on a foreclosure. The banks will also have to incur some costs like conducting an auction. They will also receive less from the property than if it is sold before foreclosure. The home’s value will also decrease, as will the houses around it. This is why avoiding a foreclosure is a priority for everyone.

  1. Saves Money

Families at risk of foreclosure are already in financial trouble, and actually going through it will add to their debt. They can expect to pay around $7,500 on legal costs alone. This is the reason why many people with foreclosed and unsold properties end up having to declare bankruptcy.

The lender also enjoys savings from legal procedures, foreclosure sale costs, and other required paperwork. This is why many banks are more willing to accept just what the house sells for, in order to at least recoup some of the money in the first place.

  1. Benefit the Market

Foreclosed properties have wreaked havoc on the market, driving prices much lower and making these homes less desirable to buyers. This is because the process of purchasing a foreclosed home is also more complicated. Short sales can help avoid this, as homes are much more quickly sold and will no longer stay empty for a long time.

  1. Save Homeowners

Being unable to pay mortgage payments can really be sad for anyone. Selling the house is the best and easiest way to save homeowners from foreclosures and its long-lasting effects. It will also save them from scammers who want to cheat desperate homeowners into questionable “ways to avoid foreclosure”.

Sometimes an unsure prospect of earning more money from the sale of a property is not enough reason to vote against a short sale. In fact, beyond the financial aspect, there are many other benefits of going for the quick sale.

Home Buyer Houston
10660 Fallstone Rd Suite C, Houston, TX 77099
(832) 900-7857

Benefits of Selling Your Home to an Investor Rather than through a Realtor

Selling to an Investor is Quicker and Easier than through Realtors

Selling a house in today’s market is tough and can be very frustrating. The reality is, there are too many other properties out there for sale, so buyers have other options to choose from. So unless you agree to a price way below what is fair, you might find yourself waiting months before you manage to find someone who will take your property.

Many people think that hiring a real estate agent is the only other option than selling the house themselves. However, both options would not necessarily help you turn over the property quickly. Moreover, these options do not allow you to sell the home in its current condition.

There is a third option for homeowners – to sell to an investor. For many, this is the best way to get rid of their property quickly and without much hassle. Below are the reasons why you should consider this method.

  1. Different Modes of Payment

When you sell to an investor, you can dictate how you want to be paid. It may be in cash or even by taking over the mortgage.

  1. No Repairs Necessary

One of the top benefits of selling to an investor is the possibility of selling the home as it is. This saves you a lot of time and money, which not a lot of people can afford. Because investors buy properties with the intention of renovating and reselling it, they will take your home in its current state.

  1. Quick Resolution

No one wants to take months selling their home, plus properties that remain unsold for a long time have the tendency to depreciate. When you sell to an investor, you will also skip a lot of the usual steps like appraising the property, waiting for approval of the bank, and inspection of the property. In fact, it might even be possible to close the sale in a week.

  1. Less Time Wasted on Negotiation

Investors will not use up a lot of time trying to negotiate the price. They will make an offer within a few days, so you can quickly get rid of the property. You have the choice between accepting this offer or trying to see if you get a better one.

  1. Mortgage Takeover

Many homeowners sell due to the inability to continue paying the mortgage, which is part of the reason why they want it sold as soon as possible. Unpaid mortgage payments might force you to declare bankruptcy, which is even worse. Instead, you should seriously consider selling to an investor so you can quickly get out of this mortgage and free yourself from debt.

  1. Ease of Relocation

One of the biggest reasons why many do not want to be tied down to a property with good public transport connections is to have the freedom to pack up and move to another city. You won’t have to say no to a great job offer somewhere else, and you can sell your house quickly to an investor.

While selling to a real estate investor might also not be the best option for everyone, especially if they are willing to wait awhile before somebody snatches it up, it is still great to have an option of a quick sale. This way, in case of an emergency or simply due to the need to get rid of the property quickly, homeowners have many more possibilities available.

Home Buyer Houston
10660 Fallstone Rd Suite C, Houston, TX 77099
(832) 419-7722