Since early 2006 to the current our financial strategy in this country crippled and has been in disarray. Hundreds of banks have already failed and been closed; hundreds more have been forced into mergers shotgun unions with stronger banks; tens of thousands more are working as zombie institutions-they seem like banks and they try to act like banks but they cannot make loans. The majority of those too big to fail banks based in New York, California, or Atlanta seem to be functioning normally, but the fact is that they are not committing to the little man. They are committing to the company that is publicly traded. In English, getting a loan from a financial institution for the borrower is near impossible.
- Do not operate your business Or do not do the trade
- Pay all cash-do not borrow
- Borrower from non-banks-friends, household and personal creditors
- Do transactions utilizing unconventional approaches -creative financing
Real estate financing is a comprehensive term. It means arranging a trade all and any types of funding is considered to perform the deal. All of these kinds of financing or most chance to fall outside the typical government mandated limitations and banking rules. The financing vehicles do not conform to Freddie Mac, Fannie Mae, FHA, VA, or HUD guidelines. Examples of creative financing vehicles include: Private Party Financing, Seller Financing, Bank financing that does not comply with the HUD guidelines, Exchanging Equities, Lease with Option Funding, Contract for a Deed Financing, Equity Sharing Financing, Home Equity Financing, Credit Card Financing, and any combination of the aforementioned.
Examining creative financing tools individually
Of the various types of all Financing tools mentioned previously the most and the frequent is party mortgage financing, including seller financing. The concept is that the bank is not involved in the trade and the party lender takes the place of the lender. There are many benefits of removing the trade is formed by the lender. The primary benefits are:
- Qualifying accepting the Debtor is the decision of this private celebration
- Qualifying accepting the property is the conclusion of this private celebration
- The rate of interest and the monthly payment is the conclusion of this private party
- The maturity date of the loan balloon date is the conclusion of this private celebration
- The down payment amount is the conclusion of this private party
- The time needed to close the loan is a lot briefer