The most recently quarterly survey from the Fed reports banks loosening credit standards. So is subprime on its way back and easy borrowing poised to make leveraging a lot less hard work for real estate investing?
Wells Fargo has apparently kicked its mortgage lending into high gear, swiping a large amount of market share as Bank of America tries to hide from more losses. Credit Unions have also cranked up the volume of their mortgage lending efforts in the last few years as bankers lobby against their competition. However, it is unlikely we will see anything really resembling the easy borrowing for real estate investing seen in the early 2000s for quite some time.
Banks and mortgage lenders are still heaping up billions in losses from foreclosures and are being more particular than ever when it comes to mortgages out of fear of having to buy back bad loans.
However, what is getting easier to get is qualifying for credit cards, car and personal loans and commercial mortgages. This is still great news for real estate investing pros.
For a start, besides being able to go out and grab the hottest cars of the year to pose with in your ads it means rebuilding credit is becoming easier for the average consumer. The faster the masses can fix up their credit scores, the faster they can buy new homes from you.
While not advisable to mix personal credit with real estate investing these other loans can provide much needed liquidity too. Those building real businesses can take advantage of low rate business loans and lines of credit, while others can utilize commercial mortgages. What many don’t know is that you can also use commercial loans to buy portfolios of single families or even leverage equity in existing homes under blanket mortgages to expand with new acquisitions.
Not a great fit you’re your real estate investing situation right now? You can still take advantage of transactional funding, rehab loans, private money and crowdfunding.