Are you interested in getting into real estate but don’t have the credit or simply want to bypass most of the headaches associated with paperwork, large investments or credit checks? Here is how to get a pre approved mortgage without actually having a mortgage at all. Okay, there is a mortgage, but it isn’t yours – yet.
Here is one strategy you could use to quickly get into action and help someone in need at the same time. Let us say that there is a person that recently purchased a house for investment purposes, but suddenly has hit hard financial times and they are risking foreclosure or filing for bankruptcy and now they risk losing everything.
You can make them an offer to pay the mortgage payments in trade for putting your name on the deed. This is a simply and secure process and this is why you and the person with the mortgage may want to do it:
1. A Quick Solution for them
The people with mortgages that are too high to pay is about to lose it all. If the bank takes the house, they not only lose their investment, but they also get a mark of bad credit. This will not help them in the now and it will not help them in the future. If they are also living in the house, things only get worse as they will still need to find a new home and thus risk falling on even harder times. When people are in the financial stress of too much month at the end of the money, they are open to creative solutions that keep the bank and creditors at bay.
2. Less Paperwork for both of you
Simply by entering into a contract agreement, you can get your name on the deed and now any major decisions regarding the house (such as selling it), would require both parties to sign in agreement. This means you can offer to take over the immediate pain of the mortgage payments for say 50% of the profits (or ownership) when the house is sold. You can clarify the details in the agreement. This process is very simply compared to a series of credit checks, large down payments etc.
3. Little Investment for either party
Since you are only taking over payments, your investment is very little as compared to putting down a large down payment (usually 10-20%). Also, your partners have no investments to make in the now and since they were already risking losing the house and getting a bad credit score, they can keep the house, share the profits of the sale and the payments will improve their credit rating in the long run. Since you are now making the payments, they can relax. They did the initial hard work of getting the house and you handle the monthly payments – it is a fair deal for both parties involved.
If the agreement is done right, you have a very clear win-win situation and have managed to get a pre approved mortgage with little to not effort at all. As with any strategy like this you will want to ensure that you are comfortable with payments and if you originally had a large chunk of money to invest, you can simply put it in the bank to collect interest and make the payments on the house.