The financing world can be intimidating for most. By understanding the different types of loans available, you will not only have more confidence going into the deal, but more importantly you will get the loan that is perfectly suited to your needs.

FINANCING OPTIONS

There are numerous financing options available. The following are loan programs most commonly used by MYreiTEAM's group of investors:

Unsecured loans: Unsecured loans do not require collateral (for example, credit cards).

Conventional loans: These are loans given by conventional lenders that require no government guarantees or insurances. These loans include your common fixed-rate mortgages, ARMs, and fully amortized and interest-only loans.

Government loans: Government loans such as FHA, VA, and FSA provide financing more easily for first-time home buyers with smaller down payments and lower income requirements. Lenders are able to provide these loan programs due to the insurance that the government provides. The government guarantees a certain amount of payment to the lender of these loans if the borrower were to default.

Seller financing: Seller financing is when a seller allows the buyer to make payments to him for the purchase of a property rather than requiring the buyer to obtain bank financing to pay him in full at close.

"Subject to" loan: When a seller sells his property without paying off his existing financing, the buyer purchases the property subject to the existing financing. The buyer makes his payment to the seller, and the seller continues to make his to the lender.

Construction loan: Construction loans provide the financing the borrower needs to build a property.

Home Improvement Loan: Home improvement loans are equity loans that the lender grants for the purpose of home repair or remodeling.

Commercial Loans: These loans provide financing for commercial property. Commercial properties are properties used for places of business that are zoned for commercial use or residential properties with five or more units.

Lease Option: A lease option is when a seller leases his property to a prospective buyer with the right to purchase it at a later date for a predetermined price.

HELOCs: Home Equity Lines of Credit are revolving loans that are secured by the equity in the borrowers property. A revolving loan allows the borrower to re-borrow the funds that he has paid off.

Home Equity Loan: A home equity loan is secured by the equity in a borrowers home. Home equity loans, with regards to lien priority, can be in first position, second position, third position and so on.

80/20: An 80/20 loan is where the buyer obtains two loans at the same time to finance one property: an 80-percent first mortgage and a 20-percent second mortgage.

Hard Money: Hard money lenders dont usually have the same strict qualification guidelines that traditional lenders do. However, they charge enormous fees and interest rates.

Assumable: Assumable loans are loans that permit the borrower to take over the existing financing on a property rather than taking out a new loan. There are two types of assumable loans: freely assumable and qualified assumable. Freely assumable loans are very rare. They do not require that the buyer go through any qualification screening to take over the loan. However, the seller, or original borrower of the loan, is responsible if the buyer who assumes the loan defaults. A qualified assumable loan requires that the buyer go through the same qualification requirements that he would have to in acquiring new financing. Once qualified, the loan is put in the buyers name, and the seller is removed from any further obligation to it.

Private Money: Private money lenders are individuals who are willing to lend their own personal money.

Portfolio Loan: These are loans that do not meet the purchase requirements of the secondary market. Lenders who are willing to create these loans are a jewel for an investor. Because the lender isnt going to sell the loan, he doesnt have to abide by secondary market criteria. Often the lender will custom tailor the loan to fit the investors needs.

Simultaneous Closing: A simultaneous closing is when a buyer closes on a property he has agreed to purchase and then closes on the resale of that property to another buyer for a profit, all in the same sitting.

Assigning Contracts: When a contract lists the buyer's name or Assignee as the purchaser, this gives the buyer the right to assign the contract to another buyer. Investors can turn profits assigning contracts to other investors for a profit.

Paul Pratt

Our team's diverse backgrounds and investing experiences include a high school teacher, a college drop-out, an MBA graduate, a waiter, a secretary, a real estate agent, a banker and a stay-at-home mom. Despite our diverse backgrounds, we shared a common, life-changing event; we all made the decision to truly change our lives. Although our starting points couldn't have been any more different, we each discovered that our journey toward financial freedom began with real estate.

Most real estate investing "gurus" offer a "one-size-fits-all" approach, providing generic ideas and uncertain results because their philosophies fail to consider individual experience and circumstances. Our personalized approach, the understanding that each of us has a very unique background and set of circumstances, is what has made MyreiTeam?s system so effective.

After years of learning "the hard way", we are now living our dreams. The high school teacher now has the ability to spend more time with his most important students, his own kids. The college drop-out is retired and enjoying exotic fishing and hunting trips. The waiter is now waited upon, vacationing and skiing in the world's greatest resort towns. The MBA grad and banker own their own real estate investing firm and the secretary now manages her own employees who are devoted to her real estate empire. The stay-at-home mom has moved her family into a luxurious 8,000-square-foot scenic mansion.

All of the wealth and success we have been enjoying has been better than we could have dreamed. But even more satisfying and phenomenal was the rate at which the Personalized Investor Matrix? was creating wealth for our friends and family who were using it to get started in real estate. Now we want to share this revolutionary approach with you. Our powerful, personalized investing system is now at your fingertips.

MYreiTEAM is exactly what it says, your team! We are here to provide you with all the help and support you need to succeed. If you have investment questions, need some support or motivation, or if you just made an exciting deal and just want to share your experience with somebody, post your question or experience on the My REI Community board. One of our team members will quickly respond to your question with expert advice. The point is we are committed to your investment success and are excited for the opportunities that lie before you. Welcome to MYreiTEAM!