12-year old Victoria Grant explains why her homeland, Canada (she's actually from Kitchener, Ontario), and most of the world, is in debt. April 27, 2012 at the Public Banking in America Conference, Philadelphia, PA.
Wednesday, May 16, 2012
It takes a 12-year old to help adults understand debt - great video by local celebrity
12-year old Victoria Grant explains why her homeland, Canada (she's actually from Kitchener, Ontario), and most of the world, is in debt. April 27, 2012 at the Public Banking in America Conference, Philadelphia, PA.
Monday, May 7, 2012
Private mortgages...here's an interesting investment...
If you’ve owned real estate in the past, you know what a good investment it is. The key to investing in private mortgages successfully is to work with a mortgage professional that can review the application and make a balanced recommendation.
If you’re interest in putting your money into an investment with good returns and relative low risk, than a private mortgage is a good option. I have a private lender who boasts that in three years we converted his money from one million to $1.5 million.
I get questions regularly from individuals interested in lending money to high-risk borrowers. Here’s a summary of the things you need to consider when putting your money into a private mortgage:
1. Does the mortgage professional have a good understanding of the applicant?
I normally collect as much information as possible on the borrowers. If I have a good understanding of the applicant and their current financial situation, I believe I can advise the private lender accordingly. We pull a credit history to get a picture of the applicant’s credit repayment. Most borrowers’ who need private mortgage loans have had credit issues in the past. We also collect relevant income and tax information that we provide to the private lender.
2. Who conducted the appraisal? What comparable properties did they use?
Understanding who did the appraisal and what comparable properties they used is key. Most private lenders will lend to 85 or 90 per cent of the value of the property. The appraisal will give you an unbiased value of the property, which may be different than the value a real estate agent would have. Most private lenders will drive by the property and inspect the property themselves.
3. What is the long-term potential of the borrower paying-out the private mortgage?
I believe private mortgages are a short-term, band-aid for the individual borrowing the money. Ask the mortgage professional you are working with, if they’ve discussed a plan with the borrower to pay out the private mortgage. In most cases, if the borrower’s credit history improves in a year than the private mortgage can be paid out. Other times the borrower’s financial situation requires a long-term plan.
As with anything else, ensure you do your “homework” when working with a mortgage professional and lending money as a private mortgage.
If you’re interest in putting your money into an investment with good returns and relative low risk, than a private mortgage is a good option. I have a private lender who boasts that in three years we converted his money from one million to $1.5 million.
I get questions regularly from individuals interested in lending money to high-risk borrowers. Here’s a summary of the things you need to consider when putting your money into a private mortgage:
1. Does the mortgage professional have a good understanding of the applicant?
I normally collect as much information as possible on the borrowers. If I have a good understanding of the applicant and their current financial situation, I believe I can advise the private lender accordingly. We pull a credit history to get a picture of the applicant’s credit repayment. Most borrowers’ who need private mortgage loans have had credit issues in the past. We also collect relevant income and tax information that we provide to the private lender.
2. Who conducted the appraisal? What comparable properties did they use?
Understanding who did the appraisal and what comparable properties they used is key. Most private lenders will lend to 85 or 90 per cent of the value of the property. The appraisal will give you an unbiased value of the property, which may be different than the value a real estate agent would have. Most private lenders will drive by the property and inspect the property themselves.
3. What is the long-term potential of the borrower paying-out the private mortgage?
I believe private mortgages are a short-term, band-aid for the individual borrowing the money. Ask the mortgage professional you are working with, if they’ve discussed a plan with the borrower to pay out the private mortgage. In most cases, if the borrower’s credit history improves in a year than the private mortgage can be paid out. Other times the borrower’s financial situation requires a long-term plan.
As with anything else, ensure you do your “homework” when working with a mortgage professional and lending money as a private mortgage.
Friday, May 4, 2012
How Kevin bought his first home, even after his bank said no to a mortgage
Kevin went to his bank to get pre-approved to buy his first home. I find most first-time buyers are well-informed on the process. Kevin was working with a good, experienced realtor, who didn't want to get involved in the mortgage pre-approval process. However, after Kevin put an offer on a home, he couldn't get the financing approved.
Buyers hirer Realtors not only to help them find a house, but also for their professional advice. Although it's not a Realtors job to figure-out the mortgage details for their clients, they should have a list of mortgage professionals that they know and trust whom they can refer their clients to. This is especially true for first time buyers, who are often well-informed but aren't aware of the subtleties of a pre-approval versus a pre-qualification on mortgage.
Kevin in fact was only pre-qualified. At the last minute, the realtor gave me a call and I was able to get a mortgage for Kevin, but it caused Kevin distress. As a first-time buyer I would encourage you to take the advice from your realtor on whom they would recommend for mortgage financing. As a realtor, my advice is to be more pro-active with your clients when it comes to financing.
Buyers hirer Realtors not only to help them find a house, but also for their professional advice. Although it's not a Realtors job to figure-out the mortgage details for their clients, they should have a list of mortgage professionals that they know and trust whom they can refer their clients to. This is especially true for first time buyers, who are often well-informed but aren't aware of the subtleties of a pre-approval versus a pre-qualification on mortgage.
Kevin in fact was only pre-qualified. At the last minute, the realtor gave me a call and I was able to get a mortgage for Kevin, but it caused Kevin distress. As a first-time buyer I would encourage you to take the advice from your realtor on whom they would recommend for mortgage financing. As a realtor, my advice is to be more pro-active with your clients when it comes to financing.
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