A bank loan is a creative financing technique used with existing equity. A bank and other types of lenders will make loans based on your signature or perhaps the equity you have in a car, boat, or other property.
Demonstrate your ability to repay these loans by working with a few local banks. Start by borrowing small amounts and repaying the loans earlier than agreed, this will turns you into a solid business partner for present and future transactions. With this technique, building up a line of credit with two or three banks in not difficult.
You will also find that the seller can be a good source to lend you the down payment. when the required down payment is only a few thousand dollars, or when you are a few thousand dollars short, a flexible seller may agree to a delayed down payment 6 to 12 months after closing. Offering the seller a high interest rate can help you do this. many sellers would find a 12% to 15% interest rate very attractive and might even spread the down payment over a longer period of time (for example,24 to 36 months). On a relatively small amount of money, the higher interest rate does not actually cost you that much more, especially because it is a tax deduction.
| Specific Situations to Apply Technique #9 |
| The Property |
| Property Offered Below Market |
| Low Mortgage, High Seller Equity |
| Owned Free and Clear No Mortgages |
| Low Interest Assumable Mortgages |
| Existing 1st or 2nd Mortgage Private |
| Unused Room (s) that Could be Rented |
| The Buyer |
| Cash for only Part of Down Payment |
| No Cash at All |
| Good Credit on Banks or Credit Union |
| Lump Sum Cash Due Soon |
| Large Monthly Income |
| You Know People with Cash to Invest |
| Equity in Real or Personal Property |
| Dead Equity |
| The Seller |
| Needs All Cash for Equity |
| Outstanding Financial Obligations |
| Large Capital Outlay Coming Up |
| Must Sell Immediately |
Bank Loan to FHA Loan