Home Equity Loan: You can typically borrow up to 90% of your primary residence’s value or 80% of your secondary residence’s value. The interest is tax-deductible and the application process is not as intense as it would be if you were applying for a conventional loan. This is usually the easiest and fastest way to access cash. Property must have equity.
Cash out Refinance: This process is very similar to applying for a mortgage and can take 30-45 days to complete. This type of transaction can be done on any property that you own that has equity.
401K or IRA: You could borrow or withdraw money from these accounts in order to finance a real estate investing project. Another option would be to reduce the amount you contribute or stop contributions all together and instead save those funds for a down payment. Talk to financial adviser about specific rules or penalties.
Sell Something You Own of Value: A second car that you hardly drive, a boat maybe, or some forgotten savings bonds. Sacrifice and sell these items in order to finance your investment.
Some mortgage loan application processing could be delayed as a result of IRS and Social Security Administration offices being closed. Fortunately, FHA and VA loans do not require IRS tax returns. Some conventional lenders are allowing processing to proceed with verification being postponed until later in the process, but this decision is being made at the lender level. Social Security number verification could also cause delays.
Fannie Mae and Freddie Mac will continue to operate without interruption. Federal Housing Finance Agency will continute operations. FHA will endorse continue to endorse new single family mortgage loans. However, FHA will not make new multifamily loan commitments. National Flood Insurance Program will not be affected because it is funded by premiums, not tax dollars.
Here is part of an email sent to me by Dan Flavin from Waterstone Mortgage:
People often believe that pre-qualifying for a loan or being pre-approved for financing mean the same thing. However, pre-approval entails making a stronger commitment to a buying a property, albeit tentative. Pre-qualification is simply the step you take before you conduct a real estate search to see how much house you can afford to buy.To pre-qualify for a loan then, you need to sit down with the lender and provide him with your income and debt information and an estimated down payment amount. Pre-qualifying helps get the ball rolling when you are looking for real estate. On the other hand, when you apply for pre-approval, you must provide the lender with documentation that details your salary, debt load, and assets. While the process of pre-qualification is free, an application fee is assessed for pre-approval. Your credit information will be run as well. However, just because you obtain pre-approval still does not mean that you can automatically obtain financing. Funding will only be officially approved once a title search is conducted and an appraisal on the property is made.
I hope Dan’s email has shed light on the difference between pre-aaproval and pre-qualification. If you need help getting pre-qualified or pre-approved, please call our office today.