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Articles by John Beck Get The Right Mortgage Plan To Stay Away From
Tax Foreclosure When you hear the phrase, “owned
free and clear” it simply means there are no liens on file at
the county recorder's office and the owner owns the home free and clear
of any encumbrances or liens. Really what it means is that there
is no debt on the house. Most people who buy property have to use Other People's
Money or OPM to buy that property. This means the individual went
to a bank for a loan so they could buy the property. The bank goes
through its process of evaluating the risk of that loan by looking at
two main areas. The credit worthiness of the individual based on
past credit payment history, current job earnings and the amount
of available cash. The value of the property which is usually determined by a licensed
appraisal. If the bank decides the individual and the property
are both good credit risks, they will make the loan. Let's use
a $100,000 property as an example to show you this process in more detail. In our example, a buyer decides to buy a home for sale
at $100,000. When the buyer contacts a bank to apply for a loan
(the banks use the term, “qualify for a loan”), that buyer
is asked to fill out lots of information on a loan application form. This
information is used by the bank to determine the credit worthiness (or
credit risk) of the buyer. If the bank determines the buyer is
a good credit risk, they will move on to the next step of evaluating
the property via an appraisal. The bank will contact a trusted licensed appraiser (often
one they have a prior relationship with) to conduct a detailed evaluation
of the property's value in comparison to what other, similar properties
are being sold for. The buyer's real estate agent can do something
called a “comp analysis” which is something similar but not
as detailed or in depth as that done by the appraiser. The appraiser will actually make an appointment to visit
the house and conduct a physical walkthrough to gauge such things as
actual size of the property, number of rooms, above ground square footage
and type of finish materials used. The appraiser will then make
a detailed comparison of other homes in the area with a similar makeup
in such things as size, style, age, square footage, view, lot size, layout
and the like. The appraiser will take pictures both of the house
(known as the subject property) and the other homes with similar attributes
to include in their report. This type of appraisal is known as
a comparison appraisal and is the type most often done on single family
homes. Once the bank knows the property has a value of at least
the loan amount and once they know the buyer is a good credit risk, the
bank will approve the loan and the new buyer will sign the mortgage documents
(often done at a title company who helps the bank with all these details)
and take ownership of the property subject to the liens the bank places
against the property to protect themselves in case the buyer decides
to default. For more information about liens and mortgages please
see the article titled, “Buying Properties for Pennies on the Dollar.” There are all different types of loans that banks make
available to credit worthy buyers. For our example we will use
a 30 year loan timeframe. A 30 year loan means the buyer has agreed
to spread the loan payments over 30 years. Usually when the buyer
signs the loan documents the loan is defined by months. So, for
example, a 30 year loan is often described as a 360 month loan as each
payment is calculated on a monthly basis over the life of the loan. So let's say the buyer bought the house for $100,000
but was able to put $20,000 down from the sale of another home. This
means the buyer will need to go to the bank to get an $80,000 loan which,
in our example, will be paid back in monthly installments over 30 years. At this point, the buyer is living in the home and in
all ways has ownership of the home except for the lien filed against
the property by the bank to protect their interest. This type of
ownership, where the owner has a lien filed against the property is often
called having ownership, “subject to” the amount of the lien. Now let's say the buyer works really hard and is able
to make extra payments over the years and eventually pays the loan off
in only 20 years. Once the home has been paid off, the bank will
file a document with the local county recorder's office showing the loan
was paid off which removes the lien which has been recorded against the
property for 20 years. At this moment, the homeowner owns the property free
and clear meaning their ownership is not subject to any other liens or
encumbrances. John Beck's proven tax lien and tax deed Amazing Profits
system teaches you how to buy properties for little upfront money so
that you can own these properties free and clear of any other liens. By
owning these properties free and clear, you can afford to hold on to
them for longer amounts of time if you wish to see a greater rise in
appreciation and the value of the property. Or if you choose, you
can sell these properties very quickly and make the full amount of profit
because you don't have to pay some other company any interest or loan
fees. Building your retirement by buying lots of properties
free and clear for just pennies on the dollar means your money works
just for you and no one else. When you have to borrow money to
buy or invest in properties, you have to pay a percentage of whatever
profit you might earn on that deal to the bank in the form of interest
rate payments and loan origination fees. So learn John Beck's Amazing Profits Tax Lien and Tax
Deed Real Estate program today and begin to invest in your financially “free
and clear” future! The biggest scam in your life is to avoid
doing something today that will make your tomorrows so much more carefree
and the biggest ripoff is when people just go with the flow and let other's
dictate their financial future. Take the bull by the horns and
shape your own destiny.
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