Wednesday, April 6, 2011
California Foreclosure Relief Opened To More Homeowners
California homeowners who refinanced their properties for cash or took out home equity lines of credit will now be allowed to participate in parts of the state's $2 billion foreclosure relief initiative. Many peopole tapped their rising equity during the boom years, using their homes as ATM's to fuel spending. The California Housing Finance Agency had initially excluded people who used their home equity in such a manner from participating in its "Keep Your Home" initiative, which launched this year with federal funds reserved for the 2008 rescue of the financial system. But California's high unemployment rate caused the agency to reconsider its policy, agency Executive Director Steven Spears said in a statement. "In the two short months since the launch of these programs, we have collected information that has helped us identify areas of improvement to make the programs more effective, particularly given the continued high level of unemployment in California," he said. The California Housing Finance Agency will now allow people who refinanced or took out home equity lines of credit to participate in three of its four Keep Your Home programs. This includes the agency's biggest inititative, which allocates $875 million as temporary financial help to people who have seen their paychecks cut or have lost their jobs, providing as much as $3,000 a month for six months to cover home payments and associated costs. It also includes a plan that would give homeowners as much as $15,000 to help them get current on their mortgages. The third program provides moving assistance for people wh0 can't afford to remain in their homes. These same programs also are being expanded to include mortgages that were originated after Jan. 1, 2009, the agency said. Homeowners who previously applied to the program and were disqualified for that reason can reapply. Those who refinanced or took out a home equity loan will not be allowed to participate in the initiative's principal-reduction effort, its second-biggest and most controversial program. About $790 million is slated for that program, which would write down the value of an estimated 25,135 "underwater" mortgages, those in which the amount owed is more than what the property would bring in a sale.
Tuesday, April 5, 2011
How Eco-Fabulous Can Be Eco-Nomical
Becoming eco friendly is the newest favorite pastime but while everyone has their own reasons for “going green” the underlying theme is green could be your wallet’s ally.
Everything from conserving water and energy to other essential environmentally conscious choices can put more money back in your pocket and homebuyers are considering these options when purchasing a home.
How much money could you be saving?
• Alternative powered homes like solar, wind or geo-thermal are easier to locate and much more affordable today. The initial costs of these systems can be high but when seeking a new home to buy consider streamlining your choices to include homes with alternative generated energy. A top energy saving item is the Owl Energy Monitor; this device shows you how much energy you use in your home and how much its costing you. Take for instance the solar energy systems. Many are portable systems that are utilized in high traffic areas of the home such as the family room. You could cut your energy usage in that room up to 40%. There are many other items that are surprisingly simple to install and again while the initial costs are quite high, looking for a home that is already comprised of these items can save you a bundle. Less money towards the utilities and more disposable income for you wallet.
• Indoor air quality can make a big impact on your medical expenses. Studies show that asthmatics and allergy sufferers have fewer to no breathing problems when using eco friendly materials like green flooring and low VOC paint materials. You can rid your home of most dust mites, allergens and sometimes mold just by disposing of the carpet and installing hard wood flooring. While searching for your new home you can look for greener components that will cost you less for maintenance and help keep your family healthy. A healthier home life means less money spent on medicines, doctor visits and absences from work.
• Traditional appliances have been outsourced with newer energy efficient models. Water heaters can account for 15% of your water bill and if more than 10 years old it will only work at 50% of its capacity. Toilets and shower heads, faucets and other energy efficient appliances that conserve water can be advantageous to a new home owner. While utility bills continue to increase everyone should look for ways to safeguard their money.
New home buyers can realize the positive effects of buying green with a little pre-planning. Looking for ways to save money before selecting your new home is a valid safeguard for future expenses. By seeking out those homes that already have green components installed, you’ll save a tremendous amount of time and money for years to come. And while many people believe going green is just too expensive and time-intensive the way to get around those concerns are by starting out small. Look for those items that will make the deal and save you lots of money in the long run.
Everything from conserving water and energy to other essential environmentally conscious choices can put more money back in your pocket and homebuyers are considering these options when purchasing a home.
How much money could you be saving?
• Alternative powered homes like solar, wind or geo-thermal are easier to locate and much more affordable today. The initial costs of these systems can be high but when seeking a new home to buy consider streamlining your choices to include homes with alternative generated energy. A top energy saving item is the Owl Energy Monitor; this device shows you how much energy you use in your home and how much its costing you. Take for instance the solar energy systems. Many are portable systems that are utilized in high traffic areas of the home such as the family room. You could cut your energy usage in that room up to 40%. There are many other items that are surprisingly simple to install and again while the initial costs are quite high, looking for a home that is already comprised of these items can save you a bundle. Less money towards the utilities and more disposable income for you wallet.
• Indoor air quality can make a big impact on your medical expenses. Studies show that asthmatics and allergy sufferers have fewer to no breathing problems when using eco friendly materials like green flooring and low VOC paint materials. You can rid your home of most dust mites, allergens and sometimes mold just by disposing of the carpet and installing hard wood flooring. While searching for your new home you can look for greener components that will cost you less for maintenance and help keep your family healthy. A healthier home life means less money spent on medicines, doctor visits and absences from work.
• Traditional appliances have been outsourced with newer energy efficient models. Water heaters can account for 15% of your water bill and if more than 10 years old it will only work at 50% of its capacity. Toilets and shower heads, faucets and other energy efficient appliances that conserve water can be advantageous to a new home owner. While utility bills continue to increase everyone should look for ways to safeguard their money.
New home buyers can realize the positive effects of buying green with a little pre-planning. Looking for ways to save money before selecting your new home is a valid safeguard for future expenses. By seeking out those homes that already have green components installed, you’ll save a tremendous amount of time and money for years to come. And while many people believe going green is just too expensive and time-intensive the way to get around those concerns are by starting out small. Look for those items that will make the deal and save you lots of money in the long run.
Thursday, March 31, 2011
Buying a Home with Great Resale Value
Whether you want to purchase a home to live in for several years or to resell quickly, location will certainly play a role in its resale value. Chances are that you may not live in the same home your entire life, so location and resale value may be important considerations when purchasing a home.
The most important step in finding a home with resale value is choosing the right neighborhood. One of the first things you may want to consider when researching a neighborhood is the economic stability of the neighborhood.
A desirable area will:
Another important factor to consider as you try to find the best neighborhoods is the quality of the local school system. Even if you don't have children, you should try to research the closest schools before purchasing a home. This provides a good criterion to factor in of the attitude of the neighborhood and the type of people you’ll be surrounded by. High scores can mean parents are fully invested in their local school system and their children and this translates into how they feel about their homes.
By placing a call to the local school district, you may be able to find out what type of funding area students receive, how well students have performed on standardized tests and whether or not the district will be opening or closing any schools in the foreseeable future. Regardless of where the home is located, the quality of the nearest schools will almost certainly be an important factor for potential buyers when you try to sell the home.
Beyond the schools and local government, there are a number of factors you may want to consider regarding the home's immediate surroundings. For instance, you may want to look for property in neighborhoods where most of the homes are similar in size and style. Additionally, the ideal location for a home is nearest the center, away from busy streets and bordering only other homes, as opposed to businesses, apartment complexes or schools.
Finally, you may want to think about the traffic patterns that surround the neighborhood and whether the street is used as a shortcut between two busy roads.
Though you may be looking for properties that lie in the middle of desirable neighborhoods, you should also consider how convenient the location is for a potential homeowner. The best homes will be located near all the essential businesses and have “walkability” - such as grocery stores, dry cleaners and banks.
In short, the ideal neighborhood will represent the best of worlds, offering residents both privacy and convenience.
The most important step in finding a home with resale value is choosing the right neighborhood. One of the first things you may want to consider when researching a neighborhood is the economic stability of the neighborhood.
A desirable area will:
- Possess a good mixture of residential and commercial districts
- Have jobs for future residents
- Demonstrate consistent economic growth
- Be supported by a strong local government
Another important factor to consider as you try to find the best neighborhoods is the quality of the local school system. Even if you don't have children, you should try to research the closest schools before purchasing a home. This provides a good criterion to factor in of the attitude of the neighborhood and the type of people you’ll be surrounded by. High scores can mean parents are fully invested in their local school system and their children and this translates into how they feel about their homes.
By placing a call to the local school district, you may be able to find out what type of funding area students receive, how well students have performed on standardized tests and whether or not the district will be opening or closing any schools in the foreseeable future. Regardless of where the home is located, the quality of the nearest schools will almost certainly be an important factor for potential buyers when you try to sell the home.
Beyond the schools and local government, there are a number of factors you may want to consider regarding the home's immediate surroundings. For instance, you may want to look for property in neighborhoods where most of the homes are similar in size and style. Additionally, the ideal location for a home is nearest the center, away from busy streets and bordering only other homes, as opposed to businesses, apartment complexes or schools.
Finally, you may want to think about the traffic patterns that surround the neighborhood and whether the street is used as a shortcut between two busy roads.
Though you may be looking for properties that lie in the middle of desirable neighborhoods, you should also consider how convenient the location is for a potential homeowner. The best homes will be located near all the essential businesses and have “walkability” - such as grocery stores, dry cleaners and banks.
In short, the ideal neighborhood will represent the best of worlds, offering residents both privacy and convenience.
Wednesday, March 30, 2011
Screening for Quality Tenants to Rent your Property
One of the most stressful elements of managing your investment property is dealing with difficult tenants. Between killing your cash flow with late rental payments, and causing financial nightmares via the damages you continuously have to repair (and let’s not forget the small fortune you spend on evicting bad tenants); why do we go through all the trouble?
What most people don't realize is that the vast majority of tenant-related problems can be eliminated by simply avoiding bad tenants altogether with thorough screening. Here are a few tips to improve your screening process.
The most essential piece of the screening process is the application. Provide a thorough application to prospective tenants that include all the pertinent information you would like to know, within the legal limits of course. Make sure that the application is completely filled out, and that you have a copy of the applicant's valid driver's license and a second picture ID and check that the name and information on the ID matches that on the application.
Next, you'll have to investigate the applicant's financials. Request the past three months' pay stubs to be sure they can afford your rent. Call the applicant's employer to verify that they work there, that there are no problems related to the applicant, and that there's no reason to believe the applicant will be unemployed in the near future. Also, request their three most recent bank statements.
While this is not always required, the applicant should be willing to provide them; if not, then you have a pretty good reason to be wary. It is also important to check the applicant's credit and criminal history. A credit score above 600 is usually considered reasonable for a tenant, and you want to steer clear of anyone with a history of evictions or criminal behavior.
On the application, make sure you include a space for the applicant to provide information about previous rental engagements including landlord contact information and rental amount.
This is important so that you can call the previous landlords to inquire about the tenant. Use caution when dealing with contacts, as many applicants use their friends to pose as landlords and vouch for them. One good method of weeding these applicants out is to ask the "landlord" about the rent, quoting a price other than that provided by the applicant. If the person you are speaking to doesn't correct you, then they were probably not the landlord. Additionally, inquire as to whether or not the tenants were able to get their security deposit back or was it held because of damage. This will give you a good idea about how the prospective will treat your rental.
You should also have any and all parties residing in the rental complete an application.
If you adhere to these methods responsibly, selecting quality tenants for your properties should not be a problem.
What most people don't realize is that the vast majority of tenant-related problems can be eliminated by simply avoiding bad tenants altogether with thorough screening. Here are a few tips to improve your screening process.
The most essential piece of the screening process is the application. Provide a thorough application to prospective tenants that include all the pertinent information you would like to know, within the legal limits of course. Make sure that the application is completely filled out, and that you have a copy of the applicant's valid driver's license and a second picture ID and check that the name and information on the ID matches that on the application.
Next, you'll have to investigate the applicant's financials. Request the past three months' pay stubs to be sure they can afford your rent. Call the applicant's employer to verify that they work there, that there are no problems related to the applicant, and that there's no reason to believe the applicant will be unemployed in the near future. Also, request their three most recent bank statements.
While this is not always required, the applicant should be willing to provide them; if not, then you have a pretty good reason to be wary. It is also important to check the applicant's credit and criminal history. A credit score above 600 is usually considered reasonable for a tenant, and you want to steer clear of anyone with a history of evictions or criminal behavior.
On the application, make sure you include a space for the applicant to provide information about previous rental engagements including landlord contact information and rental amount.
This is important so that you can call the previous landlords to inquire about the tenant. Use caution when dealing with contacts, as many applicants use their friends to pose as landlords and vouch for them. One good method of weeding these applicants out is to ask the "landlord" about the rent, quoting a price other than that provided by the applicant. If the person you are speaking to doesn't correct you, then they were probably not the landlord. Additionally, inquire as to whether or not the tenants were able to get their security deposit back or was it held because of damage. This will give you a good idea about how the prospective will treat your rental.
You should also have any and all parties residing in the rental complete an application.
If you adhere to these methods responsibly, selecting quality tenants for your properties should not be a problem.
Monday, March 28, 2011
You Still Need a Realtor to Buy Direct from the Builder
It always seems simple to walk into a model home and deal directly with the builder but that’s not the best idea. More people are taken advantage of when alone than with a real estate agent. All the paperwork you’re required to sign, disclosures, clauses and most important releases.
When you sign a release you practically give up your rights; it could mean forfeiting your right to keep your deposit or setting the settlement date in stone for you but a contingency for the builder.
Every page you initial could be detrimental in the end if you are not represented professionally. Sure, there are laws and guidelines that say you are protected from predatory requirements – RESPA Laws – however if you don’t know how to apply those guidelines to your transaction how do you know if you’re being taken for thousands of dollars?
Many homebuilders offer incentives as a way to entice you to purchase their home however those incentives often mean you must use their in-house lenders and their title escrow companies; this is far from the truth because you can use whatever lender or title escrow company you choose and in the end, the builder cannot tie the incentives to a specific lender.
Are your discounts really discounts or are they embedded somewhere in your sales package? Often a builder will show you all the discounts and incentives they’re providing to you but the loan package is packed with excessive and useless fees that make up for all those discounts they’re giving you. This is why you need a realtor to accompany you for any real estate transaction. It may seem like a simple decision to walk into a model home and deal with the salesperson but it could cost you thousands of dollars.
That salesperson works solely for the builder and I bet you’ll sign an acknowledgement of this statement. They must disclose certain items to you but again they work solely for the builder and without professional representation you are on your own to learn the ropes.
For any real estate transaction take advantage of all the knowledge a real estate agent or broker has to offer. You’ll avoid many of the traps home builders have waiting for you.Wednesday, March 16, 2011
Do I Really Need a Realtor
Everyone is looking for ways to save money during this recession including DIY everything. And although times look bleak there are many buyers out there ready to purchase your home. Question is can you go it alone or handle everything yourself?
Many homeowners believe they can go it alone and find themselves looking for a professional to save them.
With the advice of a real estate agent you’ll have a much better chance of selling quickly; recession or not.
But there are several crucial reasons for using a real estate agent.
First off, a real estate agent is trained in keeping an eye on how the market is moving and responding to different circumstances. This will allow them to tell you the important information as it develops. If you were selling your property by yourself you would be on your own as far as figuring out what a recession is doing to the real estate market including competition in your own backyard and sales and trends.
Second and most important, a real estate agent knows all the legalities, requirements and guidelines the buyer and seller must adhere to. You have no idea how many legal forms you are responsible for. You wouldn’t want to get caught with a voided contract after laying out tons of cash because you forgot a key item, would you? How about getting stuck with a one-sided contract in favor of the buyer?
Additionally, in order to improve your odds you will want a real estate agent helping out with all marketing related tasks. For instance, your agent will be able to schedule open houses, send out flyers, add your home to multiple websites, call clients and other agents in the market, and much more. These are all marketing tasks that need to be done successfully, and during a recession it is much better to use a real estate agent.
Sure, there are many ways to save during this recession but holding back on professional services during the sale of your home is definitely not one you want to undertake.
Many homeowners believe they can go it alone and find themselves looking for a professional to save them.
With the advice of a real estate agent you’ll have a much better chance of selling quickly; recession or not.
But there are several crucial reasons for using a real estate agent.
First off, a real estate agent is trained in keeping an eye on how the market is moving and responding to different circumstances. This will allow them to tell you the important information as it develops. If you were selling your property by yourself you would be on your own as far as figuring out what a recession is doing to the real estate market including competition in your own backyard and sales and trends.
Second and most important, a real estate agent knows all the legalities, requirements and guidelines the buyer and seller must adhere to. You have no idea how many legal forms you are responsible for. You wouldn’t want to get caught with a voided contract after laying out tons of cash because you forgot a key item, would you? How about getting stuck with a one-sided contract in favor of the buyer?
Additionally, in order to improve your odds you will want a real estate agent helping out with all marketing related tasks. For instance, your agent will be able to schedule open houses, send out flyers, add your home to multiple websites, call clients and other agents in the market, and much more. These are all marketing tasks that need to be done successfully, and during a recession it is much better to use a real estate agent.
Sure, there are many ways to save during this recession but holding back on professional services during the sale of your home is definitely not one you want to undertake.
Tuesday, March 15, 2011
California Foreclosure Update
1. Foreclosure filings in California dropped to levels not seen since since late 2008 when governmental intervention temporary slowed the foreclosure filing process.
2. Notice of Default filings dropped 12.8 percent month-over-month and Notice of Trustee Sale filings fell 12.5 percent from the prior month.
3. The foreclosure filing percentage decreases are more moderate when adjusted on an average daily basis due to the fewer filing and trustee sale days in February with a 3.1 percent drop for Notice of Default filings and a 2.8 percent decline for Notice of Trustee Sale filings.
On a year-over-year basis foreclosure filings were down as well, with Notice of Default filings down 29.6 percent and Notice of Trustee Sale filings falling 17.0 percent from February 2010. Acivity on the courthouse steps slowed with fewer sales leading to a 24.5 percent decrease in sales Back to Bank and a 20.3 percent drop in properties purchased by Third Parties, typically investors. For the first time, Third Party investors saw a drop in the average Time to Resell a property, down 3.1 percent to 156 days.
2. Notice of Default filings dropped 12.8 percent month-over-month and Notice of Trustee Sale filings fell 12.5 percent from the prior month.
3. The foreclosure filing percentage decreases are more moderate when adjusted on an average daily basis due to the fewer filing and trustee sale days in February with a 3.1 percent drop for Notice of Default filings and a 2.8 percent decline for Notice of Trustee Sale filings.
On a year-over-year basis foreclosure filings were down as well, with Notice of Default filings down 29.6 percent and Notice of Trustee Sale filings falling 17.0 percent from February 2010. Acivity on the courthouse steps slowed with fewer sales leading to a 24.5 percent decrease in sales Back to Bank and a 20.3 percent drop in properties purchased by Third Parties, typically investors. For the first time, Third Party investors saw a drop in the average Time to Resell a property, down 3.1 percent to 156 days.
Monday, March 14, 2011
Should You Consider Condo Living
Purchasing a condo can be a great option for many buyers. Condos frequently feature desirable locations, minimal maintenance, and smaller price tags than single-family homes and home buyers today are considering a simpler lifestyle. But condo living, good or bad, can present unique challenges;
Pros
1. Amenities. In many condominium communities you'll find you have access to a clubhouse, pool, exercise facilities, concierge, or even door security. These great perks cost you nothing extra and are quite the draw for many buyers.
2. Cost. In many cases, you can find a condo in your preferred neighborhood for a cheaper price than a single family detached home. This can come in handy when parents want children to go to the best public schools in the area. They may not be able to afford the house around the corner, but they can afford the condo in a community.
3. Maintenance. Most condominiums require very little maintenance from their tenants. Yard work and the like are done and paid for through your monthly dues. Reserve funds are saved up by the condo association for larger periodic repairs, such as roof replacement and painting.
Cons
1. Monthly dues. While the condominium unit itself may come with a cheaper price tag, once you add in monthly dues or fees you could see yourself being priced out of the property. While monthly condo fees cover on-going maintenance and contributions to a reserve fund for small emergency repairs, condo associations may assess separate fees for unexpected expenses or to fund major property improvements like repaving.
2. Resale. There are fewer buyers looking for condos. Large families are generally on the hunt for a single family dwelling.
3. Limited Space in General. You may luck out and find a condo with a garage or storage units. If so, you are in the minority. If you have lots of things to store, and no extra space to put them, remember to add in a storage rental space into your monthly expenses before buying.
4. Less Privacy. You share a wall with your neighbors. You may even have neighbors above or below you. In this case, remember the noise factor.
5. Subletting. Did you know that a condo board can make it "illegal" for you to rent your unit out? Be sure to check out the rules before you buy, especially if you are considering using the property as a rental unit at some time.
Condos make ideal homes for singles and couples who lead busy lives and don’t spend much time at home, but consider your lifestyle—both now and in a few years—and make sure a condo really Is the right fit for you.
Pros
1. Amenities. In many condominium communities you'll find you have access to a clubhouse, pool, exercise facilities, concierge, or even door security. These great perks cost you nothing extra and are quite the draw for many buyers.
2. Cost. In many cases, you can find a condo in your preferred neighborhood for a cheaper price than a single family detached home. This can come in handy when parents want children to go to the best public schools in the area. They may not be able to afford the house around the corner, but they can afford the condo in a community.
3. Maintenance. Most condominiums require very little maintenance from their tenants. Yard work and the like are done and paid for through your monthly dues. Reserve funds are saved up by the condo association for larger periodic repairs, such as roof replacement and painting.
Cons
1. Monthly dues. While the condominium unit itself may come with a cheaper price tag, once you add in monthly dues or fees you could see yourself being priced out of the property. While monthly condo fees cover on-going maintenance and contributions to a reserve fund for small emergency repairs, condo associations may assess separate fees for unexpected expenses or to fund major property improvements like repaving.
2. Resale. There are fewer buyers looking for condos. Large families are generally on the hunt for a single family dwelling.
3. Limited Space in General. You may luck out and find a condo with a garage or storage units. If so, you are in the minority. If you have lots of things to store, and no extra space to put them, remember to add in a storage rental space into your monthly expenses before buying.
4. Less Privacy. You share a wall with your neighbors. You may even have neighbors above or below you. In this case, remember the noise factor.
5. Subletting. Did you know that a condo board can make it "illegal" for you to rent your unit out? Be sure to check out the rules before you buy, especially if you are considering using the property as a rental unit at some time.
Condos make ideal homes for singles and couples who lead busy lives and don’t spend much time at home, but consider your lifestyle—both now and in a few years—and make sure a condo really Is the right fit for you.
Friday, March 11, 2011
Buying Preforeclosures
An often overlooked home buying strategy these days includes looking for pre-foreclosed properties. Pre-foreclosures are known as properties that have reached the final stages before they get repossessed or taken back by the lender or bank. The owner is still in complete control of the property or home, although the bank or lender will repossess soon if the owner doesn’t attempt to rectify the situation.
When buying real estate, there are several benefits to pre-foreclosures. Although there are several obvious ways to purchase a home, pre-foreclosure is a great option. Even with its benefits, many people miss out simply because they aren’t familiar with pre-foreclosures.
In most cases, the owner has no choice but to sell the house, and therefore will listen to just about any offer they receive. Due to this very reason, you can find pre foreclosures for sale at nearly 40% off market value. This is an ideal time to purchase, especially if you are looking to save a lot of money.
Along with the great pricing you receive, you’ll also have the luxury of dealing directly with the owner and the real estate agent - no third party banks involved, like with short sales and foreclosed properties.
This is a great advantage, with buyers being in total control of pre-foreclosure sales. In the event that the home owner decides to turn down your offer and cannot find another buyer, he will lose everything. Even if you offer the owner a small price, he will be able to make a little bit of money selling the home.
You can find pre-foreclosures that are up for sale pretty much the same way that you can find homes in which the bank already has control of. Ask your real estate agent or you can look in the local newspaper, or on the Internet. Once you have found a pre-foreclosure for sale, it’s up to you and the real estate agent to seal the deal and get the home of your dreams at a very affordable price.
When you compare foreclosed properties with pre-foreclosed properties, you’ll find that there is less competition involved with pre-foreclosures. Not only are pre-foreclosed homes a better option than a foreclosure but many times you can pay less than market value for the home and instantly reap the benefits of increased value.
Meet with a real estate agent and ask about pre-foreclosed properties and negotiations to get you in a home quickly.
When buying real estate, there are several benefits to pre-foreclosures. Although there are several obvious ways to purchase a home, pre-foreclosure is a great option. Even with its benefits, many people miss out simply because they aren’t familiar with pre-foreclosures.
In most cases, the owner has no choice but to sell the house, and therefore will listen to just about any offer they receive. Due to this very reason, you can find pre foreclosures for sale at nearly 40% off market value. This is an ideal time to purchase, especially if you are looking to save a lot of money.
Along with the great pricing you receive, you’ll also have the luxury of dealing directly with the owner and the real estate agent - no third party banks involved, like with short sales and foreclosed properties.
This is a great advantage, with buyers being in total control of pre-foreclosure sales. In the event that the home owner decides to turn down your offer and cannot find another buyer, he will lose everything. Even if you offer the owner a small price, he will be able to make a little bit of money selling the home.
You can find pre-foreclosures that are up for sale pretty much the same way that you can find homes in which the bank already has control of. Ask your real estate agent or you can look in the local newspaper, or on the Internet. Once you have found a pre-foreclosure for sale, it’s up to you and the real estate agent to seal the deal and get the home of your dreams at a very affordable price.
When you compare foreclosed properties with pre-foreclosed properties, you’ll find that there is less competition involved with pre-foreclosures. Not only are pre-foreclosed homes a better option than a foreclosure but many times you can pay less than market value for the home and instantly reap the benefits of increased value.
Meet with a real estate agent and ask about pre-foreclosed properties and negotiations to get you in a home quickly.
Thursday, March 10, 2011
Is It A Deal Or A Scam
Many homeowners have been acting in a fit of desperation and not thoroughly checking out real estate facts, leading them into unaccommodating scams. Con artist have successfully duped homeowners time and time again from everything including Title fraud, Local and Overseas investments to Foreclosure frauds, just to name a few.
I Can Save Your Home!”
There are plenty of sales pitches a scam artist rescuer will explore to get your home and money. I can save your home and your credit is a typical phrase to lure homeowners to sign over their title or get the mortgage payments sent directly to them.
In some cases, the "rescuer" will also try to collect a stiff fee before they assist the homeowner. In the worst cases, the "rescuer" may also obtain a second loan on the property, take the proceeds and leave town, or rent out the home -- forcing the current distressed resident to be evicted. And while the ownership may have been transferred to the "rescuer," the homeowner still owes the monthly mortgage payments to the bank.
And on the flip side, it's even more offensive when lenders who offer to "save" the troubled homeowner suggest refinancing their home with high fees, high interest rates and a new costly loan.
There is a simple resolution to stopping this abuse from a scam artist and that is talking to a real estate agent AND an attorney before you sign any documents.
Is that Overseas Investment too Good to be True?
Con artists utilize this real estate scam to play on your desire of getting something for very little - an easy investment. Investors are told to send investment checks, and initially they receive a small check in return, supposedly "proving" the system works. Then, their returns dwindle and no other checks are received in the mail. People tend to fall for the overseas angle because it is exotic-sounding and they think they are, in some way, taking advantage of a new discovery or resource others are not aware of. But, if you are not familiar with overseas investments or the real estate market, why take a chance on someone's word?
So what is the simple resolution to stop a con artist in their tracks before getting a hold of your money? Consult a reputable real estate agency or just call up a legal consultant. Do not use the con artists contacts use your yellow pages and call on your own!
I Can Save Your Home!”
There are plenty of sales pitches a scam artist rescuer will explore to get your home and money. I can save your home and your credit is a typical phrase to lure homeowners to sign over their title or get the mortgage payments sent directly to them.
In some cases, the "rescuer" will also try to collect a stiff fee before they assist the homeowner. In the worst cases, the "rescuer" may also obtain a second loan on the property, take the proceeds and leave town, or rent out the home -- forcing the current distressed resident to be evicted. And while the ownership may have been transferred to the "rescuer," the homeowner still owes the monthly mortgage payments to the bank.
And on the flip side, it's even more offensive when lenders who offer to "save" the troubled homeowner suggest refinancing their home with high fees, high interest rates and a new costly loan.
There is a simple resolution to stopping this abuse from a scam artist and that is talking to a real estate agent AND an attorney before you sign any documents.
Is that Overseas Investment too Good to be True?
Con artists utilize this real estate scam to play on your desire of getting something for very little - an easy investment. Investors are told to send investment checks, and initially they receive a small check in return, supposedly "proving" the system works. Then, their returns dwindle and no other checks are received in the mail. People tend to fall for the overseas angle because it is exotic-sounding and they think they are, in some way, taking advantage of a new discovery or resource others are not aware of. But, if you are not familiar with overseas investments or the real estate market, why take a chance on someone's word?
So what is the simple resolution to stop a con artist in their tracks before getting a hold of your money? Consult a reputable real estate agency or just call up a legal consultant. Do not use the con artists contacts use your yellow pages and call on your own!
Thursday, February 24, 2011
Life after Bankruptcy and Qualifying for a Home
Bankruptcy can help relieve you of your debts and stop harassing creditors from contacting you but have you thought about life after bankruptcy? Will you be able to qualify for a new home?
You can be approved for a new mortgage at a normal interest rate within 24 to 30 months after your discharge. If you can prove the bankruptcy was caused by medical reasons or a divorce you probably can be approved much sooner. But there are qualifications that you must meet to get a new mortgage and this all depends upon how you re-established yourself after the bankruptcy discharge.
Even if you don’t meet all the qualifications you can still get a mortgage but it will come with a higher interest rate and a larger down payment. Lenders will be inquiring about your finances and looking to see if you’ve paid your bills on-time since the bankruptcy.
So How Much Credit is Enough?
If mortgaging a new home, it will take more than a bank card with a $500 limit to re-establish your credit. Begin by concentrating on the necessities and time will work miracles. Start establishing the following:
1. Bank checking and savings account
2. A secured credit card from a reputable institution
3. An auto loan
You will need at least 3 credit references since your bankruptcy.
Put Your Financial House in Order
It all starts with your money. Have you noticed that most people in dire financial straits seem to have everything? Large screen televisions, expensive appliances, fancy cars, etc? When you are discharged from bankruptcy you must cut expenses and stop throwing money away on useless things however the problem here lies with our mindset – we believe everything we have is a necessity; the new wardrobe, the mini-mansion, the over-priced automobile; you may very well deserve these things but if you can’t afford it you simply have to understand the obvious – You Can’t Afford It!
Did You Know –
After your bankruptcy discharge you can re-build your credit score within 24 months up to a high 800? But this requires paying all bills on time and securing new credit responsibilities to show that you’re ready.
I wish I could say that you’ll be automatically qualified but this all depends on what you’ve done since your bankruptcy and the lender’s guidelines.
Things that will Kill a Mortgage Loan Application
Start anticipating a bumpy ride; I know this sounds negative but it’s best to be prepared and after a bankruptcy it’s not a walk in the park. There are twists and turns but it will prove to be well worth the hassle so never give up.
There are things that will likely kill or just delay your chances for a new mortgage;
1. Poor credit since bankruptcy
2. High debt to income ratio
3. Job instability
4. Tax liens or levies against your paycheck
5. Insufficient down payment
Reality hurts sometimes but when you’ve been given a second chance you should know you have to prove yourself all over again. The most important thing here is to know that you must take a hard look at how you’re living and the work you must put into re-establishing your credit. This will improve your chances not only for a mortgage but living encumbered without the benefits of good credit.
You can be approved for a new mortgage at a normal interest rate within 24 to 30 months after your discharge. If you can prove the bankruptcy was caused by medical reasons or a divorce you probably can be approved much sooner. But there are qualifications that you must meet to get a new mortgage and this all depends upon how you re-established yourself after the bankruptcy discharge.
Even if you don’t meet all the qualifications you can still get a mortgage but it will come with a higher interest rate and a larger down payment. Lenders will be inquiring about your finances and looking to see if you’ve paid your bills on-time since the bankruptcy.
So How Much Credit is Enough?
If mortgaging a new home, it will take more than a bank card with a $500 limit to re-establish your credit. Begin by concentrating on the necessities and time will work miracles. Start establishing the following:
1. Bank checking and savings account
2. A secured credit card from a reputable institution
3. An auto loan
You will need at least 3 credit references since your bankruptcy.
Put Your Financial House in Order
It all starts with your money. Have you noticed that most people in dire financial straits seem to have everything? Large screen televisions, expensive appliances, fancy cars, etc? When you are discharged from bankruptcy you must cut expenses and stop throwing money away on useless things however the problem here lies with our mindset – we believe everything we have is a necessity; the new wardrobe, the mini-mansion, the over-priced automobile; you may very well deserve these things but if you can’t afford it you simply have to understand the obvious – You Can’t Afford It!
Did You Know –
After your bankruptcy discharge you can re-build your credit score within 24 months up to a high 800? But this requires paying all bills on time and securing new credit responsibilities to show that you’re ready.
I wish I could say that you’ll be automatically qualified but this all depends on what you’ve done since your bankruptcy and the lender’s guidelines.
Things that will Kill a Mortgage Loan Application
Start anticipating a bumpy ride; I know this sounds negative but it’s best to be prepared and after a bankruptcy it’s not a walk in the park. There are twists and turns but it will prove to be well worth the hassle so never give up.
There are things that will likely kill or just delay your chances for a new mortgage;
1. Poor credit since bankruptcy
2. High debt to income ratio
3. Job instability
4. Tax liens or levies against your paycheck
5. Insufficient down payment
Reality hurts sometimes but when you’ve been given a second chance you should know you have to prove yourself all over again. The most important thing here is to know that you must take a hard look at how you’re living and the work you must put into re-establishing your credit. This will improve your chances not only for a mortgage but living encumbered without the benefits of good credit.
Thursday, February 17, 2011
New Homebuyers Save Bigger with a 15Yr Mortgage
Did you know more homebuyers are choosing a 15-year mortgage over a 30-year mortgage than ever before? It’s not that difficult to understand why; Not only is now the best time to buy a new home but you get to become mortgage-free sooner.
15 year mortgage loans are offered at a lower interest rate; while the 30 year mortgage interest rates are steadily climbing, the 15 year mortgage interest rates have declined.
If you would take out a $200,000 15yr mortgage loan today with an interest rate of 4.75%, your monthly mortgage loan payments would be $1043.00; compare that to today’s 15 yr interest rate and you could take out that same $200,000 mortgage loan at 4.05% with monthly payments totaling approximately $1480;
Yes, it’s a few hundred dollars more to pay off your mortgage loan sooner and that’s a hefty monthly payment, but you get to shave off 15 years to being completely mortgage free; who says you have to spend that much? You could consider a smaller home or a different part of town to lower the price of the home. The important element here is in just 15 years, you will own your home free and clear.
OK, that idea looks fabulous, right? Keep in mind, qualifying for a 15yr mortgage loan means less debt-to-income ratios with more income. Why? Well, you’re telling the lender that you can afford more for your investment.
The 15yr home mortgage loan is especially good if you’re looking at your retirement options. Many retirees are unprepared today because of many payments their still responsible for. What’s more advantageous than being mortgage free? Just think, 50 years old and your mortgage is paid off. Today’s scenario is more like 65 years old and your mortgage is paid off, so that’s 15 years advantage you have to saving over a thousand dollars per month.
Now many potential new homebuyers still sit on the fence, not sure if renting or buying a home is the best decision for them; well, hurry up with that decision because the consensus is, mortgage interest rates will gradually climb throughout the year. Today’s 4.5 to 4.75% interest rate could hit 5±% by years-end.
The 15 year mortgage won’t fit everyone’s lifestyle, but it sure is worth considering. Don’t look at it as paying a mortgage, because it’s really making an investment in your future.
Tuesday, February 15, 2011
What The New FICO 8 Score Means To You
Increasing numbers of lenders are turning to the FICO 8 score released in 2009. The new system offers 15% greater accuracy in predicting repayment. It is gaining the most use in the mortgage and large limit credit sectors. It was quickly adopted as an industry standard among home loan lenders. Even though it is not the official name and is used for other credit, it is often called the FICO 8 Mortgage Score.
What Is the New Fico 8 Score?
The FICO 8 Mortgage Score is a refined version of the old FICO, or regular credit score. By improving the model, it permits a better prediction rate for repaying loans. This increases the security and amount of credit that a lender can offer.
It uses the old FICO score range of 300 to 850. The main adjustment focus on how a few factors affect the score.
Piggybacking:”
Many people were using a scheme to artificially boost their credit rating. A friend or relative with a high credit score would add the person with a low score as an authorized user to their credit card. This boosted the lower score by piggybacking it to a well-established, creditworthy account. The new FICO 8 includes ways to distinguish between piggybacking, married couples with different names, and domestic partners to avoid this artificial manipulation of the system.
End Of High Risk Credit Inflation:
Another system manipulation targeted by the FICO 8 Mortgage Score is credit inflation. Under the old scoring system, your score would increase with your credit limits. Consumers could acquire multiple cards with expanding limits over time to artificially boost their score. Many of these people maximized their credit lines, creating huge risks.
To balance out the risk, FICO 8 takes into account how much of the credit available to a customer is being used. Large amounts of credit with a low percentage used will provide a big boost to credit scores. Some critics argue that this worsens credit inflation. Industry experts counter that a person with a lot of credit and very little of it used are most likely to repay debts. On the other hand, someone with maxed out credit cards and a second mortgage is very likely to default, even though they have a large amount of credit.
Improved Payment Histories And Targeting:
One of the most important changes is how the FICO 8 analyzes credit history. Late payments matter a bit less, compared to an overall history of repayment. Under the old system, late payments could seriously lower credit scores. Under FICO 8, the main focus is the rate of repayment. After all, someone who often pays late but always pays completely is much less of a risk than a person that is often timely but defaults on debts.
A related aspect is better targeting of consumers. A person with a poor history but a couple of recent years with better income and payments can actually carry relatively low risk. On the other hand, someone with a good history but overextended credit may be a big risk.
How Does This Affect Foreclosures And Mortgages?
Foreclosure typically causes a credit score drop of around 150 points. This is not caused by the mortgage default alone. Statistically, those experiencing foreclosure will also default on most or all of their other debts as well. This is where the FICO 8 changes can benefit those losing their home to foreclosure.
Due to the way the new system calculates scores, it is more important than ever to stay current on other debts when facing foreclosure. Under the old system, a foreclosure can cause serious negative effects for several years. FICO 8 will allow a recovery of credit score within a few years.
Pay your other debts in a timely fashion and make payment arrangements if you cannot meet your current obligations to avoid further negative reporting. Remember, the FICO 8 Mortgage Score takes into account total payment history. If you show that you are not like the average borrower and the foreclosure was an isolated default, the system will raise your credit score.
What Is the New Fico 8 Score?
The FICO 8 Mortgage Score is a refined version of the old FICO, or regular credit score. By improving the model, it permits a better prediction rate for repaying loans. This increases the security and amount of credit that a lender can offer.
It uses the old FICO score range of 300 to 850. The main adjustment focus on how a few factors affect the score.
Piggybacking:”
Many people were using a scheme to artificially boost their credit rating. A friend or relative with a high credit score would add the person with a low score as an authorized user to their credit card. This boosted the lower score by piggybacking it to a well-established, creditworthy account. The new FICO 8 includes ways to distinguish between piggybacking, married couples with different names, and domestic partners to avoid this artificial manipulation of the system.
End Of High Risk Credit Inflation:
Another system manipulation targeted by the FICO 8 Mortgage Score is credit inflation. Under the old scoring system, your score would increase with your credit limits. Consumers could acquire multiple cards with expanding limits over time to artificially boost their score. Many of these people maximized their credit lines, creating huge risks.
To balance out the risk, FICO 8 takes into account how much of the credit available to a customer is being used. Large amounts of credit with a low percentage used will provide a big boost to credit scores. Some critics argue that this worsens credit inflation. Industry experts counter that a person with a lot of credit and very little of it used are most likely to repay debts. On the other hand, someone with maxed out credit cards and a second mortgage is very likely to default, even though they have a large amount of credit.
Improved Payment Histories And Targeting:
One of the most important changes is how the FICO 8 analyzes credit history. Late payments matter a bit less, compared to an overall history of repayment. Under the old system, late payments could seriously lower credit scores. Under FICO 8, the main focus is the rate of repayment. After all, someone who often pays late but always pays completely is much less of a risk than a person that is often timely but defaults on debts.
A related aspect is better targeting of consumers. A person with a poor history but a couple of recent years with better income and payments can actually carry relatively low risk. On the other hand, someone with a good history but overextended credit may be a big risk.
How Does This Affect Foreclosures And Mortgages?
Foreclosure typically causes a credit score drop of around 150 points. This is not caused by the mortgage default alone. Statistically, those experiencing foreclosure will also default on most or all of their other debts as well. This is where the FICO 8 changes can benefit those losing their home to foreclosure.
Due to the way the new system calculates scores, it is more important than ever to stay current on other debts when facing foreclosure. Under the old system, a foreclosure can cause serious negative effects for several years. FICO 8 will allow a recovery of credit score within a few years.
Pay your other debts in a timely fashion and make payment arrangements if you cannot meet your current obligations to avoid further negative reporting. Remember, the FICO 8 Mortgage Score takes into account total payment history. If you show that you are not like the average borrower and the foreclosure was an isolated default, the system will raise your credit score.
Monday, February 14, 2011
How FHA New Guidelines Affect You
Over the course of the past few years, the Federal House Administration has implemented a number of changes to home loan rules. At first, many observers expected severe rules and difficulties for many home buyers. Thankfully, the new rules and conditions are not as bad as originally considered. They also seem very well-made to improve the housing market for lenders and buyers alike.
These changes help improve the FHA's ability to provide low interest home loans and continue to allow the agency to provide more loans to more people.
End of 2008:
580 was set as the minimum credit score. The down payment help program (Nehemiah) was ended. Down payment minimums were set to 3.5%.
Beginning of 2009:
The minimum credit score was raised again. This new standard was set at 620.
Late Fall 2010:
Further insulating the agency from high risk, the minimum score was raised to 640.
There were three main changes to the standards:
High Mortgage Insurance Standards; Private mortgage insurance, or the mortgage insurance premium, was raised from 1.75% to 2.25%. This causes a slight increase in monthly payments, but it is not considered a burden by industry experts. It is paid along with the loan, spreading out the costs over the loan lifetime.
This was implemented in April of 2010.
Down Payment and FICO Scores; The minimum score standard qualifies a purchaser for the small 3.5% down payment option. Buyers with a lower credit score may still qualify, but will be required to pay 5-10% down on the home. This reduces the risk for the FHA, while leaving low down payment loans available to buyers with a good credit history.
Reduced Seller Closing Offers; Sellers now can only provide half as much towards closing costs. Under the old policy, the person selling the home could provide up to 6% in closing cost assistance. The recent changes only allow a 3% contribution.
Rounding out these new rules, fresh standards were drafted for lender enforcement. Some homeowners will be affected more than others by these changes. Low income purchasers and those with an uneven credit history will be most burdened. However, the average home purchaser benefits greatly from these new policies.
Overall, these changes fulfill FHA's mission to provide low-cost loans and increase homeownership. They reduce the risks of lending and increase available capital. With higher repayment rates, the FHA will be able to offer more loans over the long term.
These changes help improve the FHA's ability to provide low interest home loans and continue to allow the agency to provide more loans to more people.
End of 2008:
580 was set as the minimum credit score. The down payment help program (Nehemiah) was ended. Down payment minimums were set to 3.5%.
Beginning of 2009:
The minimum credit score was raised again. This new standard was set at 620.
Late Fall 2010:
Further insulating the agency from high risk, the minimum score was raised to 640.
There were three main changes to the standards:
High Mortgage Insurance Standards; Private mortgage insurance, or the mortgage insurance premium, was raised from 1.75% to 2.25%. This causes a slight increase in monthly payments, but it is not considered a burden by industry experts. It is paid along with the loan, spreading out the costs over the loan lifetime.
This was implemented in April of 2010.
Down Payment and FICO Scores; The minimum score standard qualifies a purchaser for the small 3.5% down payment option. Buyers with a lower credit score may still qualify, but will be required to pay 5-10% down on the home. This reduces the risk for the FHA, while leaving low down payment loans available to buyers with a good credit history.
Reduced Seller Closing Offers; Sellers now can only provide half as much towards closing costs. Under the old policy, the person selling the home could provide up to 6% in closing cost assistance. The recent changes only allow a 3% contribution.
Rounding out these new rules, fresh standards were drafted for lender enforcement. Some homeowners will be affected more than others by these changes. Low income purchasers and those with an uneven credit history will be most burdened. However, the average home purchaser benefits greatly from these new policies.
Overall, these changes fulfill FHA's mission to provide low-cost loans and increase homeownership. They reduce the risks of lending and increase available capital. With higher repayment rates, the FHA will be able to offer more loans over the long term.
Wednesday, February 9, 2011
I Want To Invest In Real estate
There are key differences between investment property and a second home. Many assume that buying another house for investment purposes is just like purchasing a vacation property for the family. This can lead to a lot of frustration as the process will not meet their expectations. Understanding the differences helps to make the process of moving from personal to investment purchases a bit easier.
A major area of difference is home financing. Each type of property has distinct qualification standards. You may qualify for a second home but not for an investment property. This is caused by the higher risks involved in rentals and investment value. Market conditions, unknown tenants, and other factors cause lenders to see a greater chance of financial problems. Understanding the distinction between lending criteria and why differences exist will help you get through the investment process with less stress.
Investment Properties and Personal Use Homes
Down Payments:
A larger down payment and/or more collateral are required to finance a second home, compared to your primary house. While a loan for your first home may only require a 5 to 10 percent down payment, additional properties may need as much as 25% down. Lenders will usually require more collateral, larger down payment or shorter loan period for investment properties. Remember, the lender is attempting to balance the risks with the potential income from interest.
Interest Rates:
Interest rates usually rise for second and third properties. This is also true for leased and rental properties. Statistically, homeowners with additional property are more likely to default on at least one loan. In addition, properties which are leased or rented out can be subject to a lot of wear, tear, and damage from the temporary residents. The higher interest rate ensures a faster return on the loan for the lender, insulating them from these risks.
Homeowner’s Insurance:
Homeowner’s insurance almost always rises for secondary properties, whether for personal use or investment purposes. With personal use, such as vacation homes, the properties are left unattended and vacant for periods of time. This raises the risk of theft, unnoticed problems, and insufficient property maintenance. For investment properties, there are liability risks and a higher chance of property damage.
Other Factors
There are a few other things unique to rental and investment property that you should keep in mind:
1.A common requirement is the escrow of three months of financial obligations. This includes insurance premiums, loan payments, and taxes.
2.Only 50% to 75% of the expected lease or rental income will be taken into account when applying for a loan. You need to be able to show that you can cover a quarter to one-half of the expected payment without rental income. Documentation supporting the projected income is expected. The best way to get it is to ask the seller about their rental income from the property.
3.If there are no current occupants, the lender may require that you have a qualified lessee or renter lined up for the property. This helps reduce the risk of a loss on vacant property.
There may be other factors considered by the bank or lender for investment properties. However, a good credit rating, reliable income, and substantial down payment are universally required
A major area of difference is home financing. Each type of property has distinct qualification standards. You may qualify for a second home but not for an investment property. This is caused by the higher risks involved in rentals and investment value. Market conditions, unknown tenants, and other factors cause lenders to see a greater chance of financial problems. Understanding the distinction between lending criteria and why differences exist will help you get through the investment process with less stress.
Investment Properties and Personal Use Homes
Down Payments:
A larger down payment and/or more collateral are required to finance a second home, compared to your primary house. While a loan for your first home may only require a 5 to 10 percent down payment, additional properties may need as much as 25% down. Lenders will usually require more collateral, larger down payment or shorter loan period for investment properties. Remember, the lender is attempting to balance the risks with the potential income from interest.
Interest Rates:
Interest rates usually rise for second and third properties. This is also true for leased and rental properties. Statistically, homeowners with additional property are more likely to default on at least one loan. In addition, properties which are leased or rented out can be subject to a lot of wear, tear, and damage from the temporary residents. The higher interest rate ensures a faster return on the loan for the lender, insulating them from these risks.
Homeowner’s Insurance:
Homeowner’s insurance almost always rises for secondary properties, whether for personal use or investment purposes. With personal use, such as vacation homes, the properties are left unattended and vacant for periods of time. This raises the risk of theft, unnoticed problems, and insufficient property maintenance. For investment properties, there are liability risks and a higher chance of property damage.
Other Factors
There are a few other things unique to rental and investment property that you should keep in mind:
1.A common requirement is the escrow of three months of financial obligations. This includes insurance premiums, loan payments, and taxes.
2.Only 50% to 75% of the expected lease or rental income will be taken into account when applying for a loan. You need to be able to show that you can cover a quarter to one-half of the expected payment without rental income. Documentation supporting the projected income is expected. The best way to get it is to ask the seller about their rental income from the property.
3.If there are no current occupants, the lender may require that you have a qualified lessee or renter lined up for the property. This helps reduce the risk of a loss on vacant property.
There may be other factors considered by the bank or lender for investment properties. However, a good credit rating, reliable income, and substantial down payment are universally required
Tuesday, February 8, 2011
Have You Considered a 203K Rehab Home
Many homebuyers bypass a home that requires repairs; those obvious wires sticking out, missing appliances, outdated kitchens and even a hole in the roof probably would turn most homebuyers off. But many of these homes are uncovered gems waiting to be found and rehabbed. It just takes a special type of homebuyer with patience and vision that can see all the possibilities.
There are mortgages available specifically to buy and fix a home. These definitely should be considered if a home is in good condition, but does not meet your goals, i.e. out dated kitchen, flooring, issues with roof, etc. This program allows you to both purchase and repair a home with a single transaction.
In addition to a typical home improvement project for this type of loan package, the 203-k mortgage loan program can be used to convert a one-family dwelling to a multi-family dwelling; perfect if you need to move the in-laws in with you.
You're probably more acquainted with mortgage financing plans that provide permanent financing. That is you pay your closing fees, sign for a home, and deal with the lender on a monthly basis, when you pay your mortgage. The significance of a 203K loan allows the buyer to roll in the costs of repairs to rehabilitate the property into the mortgage loan.
When rehabilitation is involved, the lender requires the home improvements to be finished before the long-term mortgage is made. You really sit down at closing to sign off on 2 loans; a temporary one for construction/rehabbing of the property, then your 15 or 30 year mortgage after all improvements have been completed.
There are 2 FHA 203k loans; the FHA 203k Rehab and the FHA 203k
Streamline. The FHA 203k Rehab enables borrowers to obtain a single mortgage to finance the purchase and the rehabilitation costs of the property. Minimum improvements are $5,000.
The 203k Streamline key points; this loan has many of the same attributes of the 203k Rehab loan, except the Streamline loan has no minimum amount tagged onto repairs. The maximum amount of repairs is limited to $35,000 for major remodeling.
The 203k loan takes an average of 45 days to close; 30 days for minor remodeling projects and 60 days for projects involving major structure remodeling.
The qualification requirements are the same as a typical FHA mortgage loan however, you you'll need to submit a home project plan and budget for the improvements. The only additional item that the borrower needs is enough cash reserved to pay for materials and labor until they are reimbursed through the loan.
With an over-abundance of foreclosed properties that need rehabilitation, the 203K loan package is a perfect opportunity to get more house for less price (as-is market value) and be able to make improvements without borrowing from your personal savings.
Contact an experienced realtor to start looking for those missed gems.
There are mortgages available specifically to buy and fix a home. These definitely should be considered if a home is in good condition, but does not meet your goals, i.e. out dated kitchen, flooring, issues with roof, etc. This program allows you to both purchase and repair a home with a single transaction.
In addition to a typical home improvement project for this type of loan package, the 203-k mortgage loan program can be used to convert a one-family dwelling to a multi-family dwelling; perfect if you need to move the in-laws in with you.
You're probably more acquainted with mortgage financing plans that provide permanent financing. That is you pay your closing fees, sign for a home, and deal with the lender on a monthly basis, when you pay your mortgage. The significance of a 203K loan allows the buyer to roll in the costs of repairs to rehabilitate the property into the mortgage loan.
When rehabilitation is involved, the lender requires the home improvements to be finished before the long-term mortgage is made. You really sit down at closing to sign off on 2 loans; a temporary one for construction/rehabbing of the property, then your 15 or 30 year mortgage after all improvements have been completed.
There are 2 FHA 203k loans; the FHA 203k Rehab and the FHA 203k
Streamline. The FHA 203k Rehab enables borrowers to obtain a single mortgage to finance the purchase and the rehabilitation costs of the property. Minimum improvements are $5,000.
The 203k Streamline key points; this loan has many of the same attributes of the 203k Rehab loan, except the Streamline loan has no minimum amount tagged onto repairs. The maximum amount of repairs is limited to $35,000 for major remodeling.
The 203k loan takes an average of 45 days to close; 30 days for minor remodeling projects and 60 days for projects involving major structure remodeling.
The qualification requirements are the same as a typical FHA mortgage loan however, you you'll need to submit a home project plan and budget for the improvements. The only additional item that the borrower needs is enough cash reserved to pay for materials and labor until they are reimbursed through the loan.
With an over-abundance of foreclosed properties that need rehabilitation, the 203K loan package is a perfect opportunity to get more house for less price (as-is market value) and be able to make improvements without borrowing from your personal savings.
Contact an experienced realtor to start looking for those missed gems.
Monday, February 7, 2011
Don't Forget These Tax Deductions
45 million people use itemized deductions when they file their taxes, totaling almost $1 trillion in combined deductions. About twice as many people only claim standard deductions for a grand total of $500 billion. That means half as many people get twice the deductions and four times as much benefit.
That is quite a difference, but not all of it comes from regular deductions; some is derived from tax credits. Tax credits are often confused with tax breaks and deductions, but they are quite distinct.
1)Deductions subtract from your taxable income.
2)Breaks are reductions in the tax rates paid.
3)Credits are amounts added to your taxes paid balance. Credits provide the biggest benefit.
THE RECENT VEHICLE SALES TAX DEDUCTION
New vehicle purchases can incur a hefty sales tax. On a $20,000 car with a 5% sales tax, that would be $1000 just in taxes! Starting in 2009, sales taxes paid on new vehicle purchases can be deducted on federal taxes. This includes most types of common vehicles including cars, trucks, and motorcycles.
You qualify for the deduction whether or not it is itemized on Schedule A with your tax filing. While the full purchase price and/or cost of financing cannot be deducted, the full amount paid in sales tax is a deduction. There are some limitations involving time frames and income levels, so be sure to check with the latest IRS publications for accurate information.
JOB HUNTING DEDUCTIONS
This is one of the most overlooked deductions and only a small percentage of qualifying people claim it. With the ongoing trend of high unemployment, more individuals qualify for this deduction than ever before. The deduction is available whether or not you get the specific job you were seeking. Any costs directly related to the job search are deductible. This includes, but is not limited to, resume writing services, employment agency fees, transportation costs, job bank access fees, postage, and printing costs.
MILEAGE DEDUCTIONS
There are a large number of mileage deductions available. The two that have the most qualifying taxpayers are medical and charitable travel deductions. Miles traveled between home or work and the doctor's office or hospitals are all deductible at a rate of 24 cents per mile. Travel for the purposes of charity is deductible at a rate of 14 cents per mile. The availability and rate of mileage deductions can vary from year to year, so check the latest IRS publications to find which additional reductions are available to you.
RETIREMENT TAX CREDIT
Various tax incentives exist to promote retirement savings. This includes permitting pretax contributions and breaks for certain types of investment. One of the most valuable options is a tax credit for the initial investment in a retirement plan. As much as half of the first $2000 placed in retirement savings will be returned as a tax credit. Some restrictions and rate formulas apply, so review the most current information from the Internal Revenue Service.
These are just some of the many tax credits and deductions that may be available to you. As you prepare your taxes this year, be sure to check into what you may qualify for.
That is quite a difference, but not all of it comes from regular deductions; some is derived from tax credits. Tax credits are often confused with tax breaks and deductions, but they are quite distinct.
1)Deductions subtract from your taxable income.
2)Breaks are reductions in the tax rates paid.
3)Credits are amounts added to your taxes paid balance. Credits provide the biggest benefit.
THE RECENT VEHICLE SALES TAX DEDUCTION
New vehicle purchases can incur a hefty sales tax. On a $20,000 car with a 5% sales tax, that would be $1000 just in taxes! Starting in 2009, sales taxes paid on new vehicle purchases can be deducted on federal taxes. This includes most types of common vehicles including cars, trucks, and motorcycles.
You qualify for the deduction whether or not it is itemized on Schedule A with your tax filing. While the full purchase price and/or cost of financing cannot be deducted, the full amount paid in sales tax is a deduction. There are some limitations involving time frames and income levels, so be sure to check with the latest IRS publications for accurate information.
JOB HUNTING DEDUCTIONS
This is one of the most overlooked deductions and only a small percentage of qualifying people claim it. With the ongoing trend of high unemployment, more individuals qualify for this deduction than ever before. The deduction is available whether or not you get the specific job you were seeking. Any costs directly related to the job search are deductible. This includes, but is not limited to, resume writing services, employment agency fees, transportation costs, job bank access fees, postage, and printing costs.
MILEAGE DEDUCTIONS
There are a large number of mileage deductions available. The two that have the most qualifying taxpayers are medical and charitable travel deductions. Miles traveled between home or work and the doctor's office or hospitals are all deductible at a rate of 24 cents per mile. Travel for the purposes of charity is deductible at a rate of 14 cents per mile. The availability and rate of mileage deductions can vary from year to year, so check the latest IRS publications to find which additional reductions are available to you.
RETIREMENT TAX CREDIT
Various tax incentives exist to promote retirement savings. This includes permitting pretax contributions and breaks for certain types of investment. One of the most valuable options is a tax credit for the initial investment in a retirement plan. As much as half of the first $2000 placed in retirement savings will be returned as a tax credit. Some restrictions and rate formulas apply, so review the most current information from the Internal Revenue Service.
These are just some of the many tax credits and deductions that may be available to you. As you prepare your taxes this year, be sure to check into what you may qualify for.
Thursday, January 27, 2011
The Fine Line Between Price And Value
Understand first of all that there "IS" a difference between price and value. Price is the amount you are asking for the property. Value is buyer perceived, and this perception of value is influenced by many factors such as location, features, condition, comparison to other purchase option, etc. By attending to details that can have a positive impact on the value, sellers can significantly increase their chance of attracting qualified buyers willing to pay the asking price.
Some tips to achieve a positive impact on value are:
The perceived size impacts value, even more so than actual square footage. Open floor plans make a room feel bigger than larger spaces with smaller rooms. Showing property that is furniture free, or at reduced clutter, helps to make the space feel bigger.
Vacancy increases sale-ability. Property is easier to show and easier to sell, and quicker to take possession of when it is vacant at the time it is offered for sale. Evidence of problems to take possession of the property -- such as encroachments, or tenants who won't allow buyer tours -- negatively impact value. Vacancy also helps the buyer walk through the property imagining ownership. Sellers should remove personal trinkets and family pictures as well as being conveniently absent during a buyer tour.
Cosmetics are important:
Fresh paint will always add more value than it costs.
Clean or new carpet/flooring adds more value than it costs.
Landscaping adds more value than it costs. At the very minimum, make the entrance area neat.
If you can, add some colorful flowers and new sod.
Take care of the obvious! The spot on the ceiling from the roof leak takes thousands of dollars from the perceived value and the offer price.
Condition affects value. Do a seller's home inspection to identify and fix the problem BEFORE closing. No point holding up your check a few extra days; plus a failed buyer's inspection could cost you the sale. Buyers will often bargain down your asking price to accommodate for property condition and repairs.
If you can, remodel/update the kitchen and master bathroom. These two areas have a big impact on home buying decisions.
Strategic renovations impact value and your bottom line. Don't spend more money to renovate the place than you can recapture in value on the sales price.
Some tips to achieve a positive impact on value are:
The perceived size impacts value, even more so than actual square footage. Open floor plans make a room feel bigger than larger spaces with smaller rooms. Showing property that is furniture free, or at reduced clutter, helps to make the space feel bigger.
Vacancy increases sale-ability. Property is easier to show and easier to sell, and quicker to take possession of when it is vacant at the time it is offered for sale. Evidence of problems to take possession of the property -- such as encroachments, or tenants who won't allow buyer tours -- negatively impact value. Vacancy also helps the buyer walk through the property imagining ownership. Sellers should remove personal trinkets and family pictures as well as being conveniently absent during a buyer tour.
Cosmetics are important:
Fresh paint will always add more value than it costs.
Clean or new carpet/flooring adds more value than it costs.
Landscaping adds more value than it costs. At the very minimum, make the entrance area neat.
If you can, add some colorful flowers and new sod.
Take care of the obvious! The spot on the ceiling from the roof leak takes thousands of dollars from the perceived value and the offer price.
Condition affects value. Do a seller's home inspection to identify and fix the problem BEFORE closing. No point holding up your check a few extra days; plus a failed buyer's inspection could cost you the sale. Buyers will often bargain down your asking price to accommodate for property condition and repairs.
If you can, remodel/update the kitchen and master bathroom. These two areas have a big impact on home buying decisions.
Strategic renovations impact value and your bottom line. Don't spend more money to renovate the place than you can recapture in value on the sales price.
Wednesday, January 26, 2011
Homeownership Is Still A Great Investment
Even in today's economy, it's a fact that homeownership remains one of the best investments you can make.
If you're a homeowner, perhaps you identify with budgeting, living paycheck to paycheck. In fact, it's cheaper nowadays to buy a home instead of renting.
Uncle Sam has thrown you an amazing tax shelter that's beyond compare. You may deduct the mortgage interest paid on your loan and deduct the property taxes paid to your state. These deductions are based on you itemizing your deductions on your tax return. And if you are not a homeowner yet, this tax benefit is significant enough to make you look seriously at home ownership. There are of course, exceptions to every deduction. One of the complexities of home ownership tax deductions surrounds points.
Points are one type of fee paid at closing to your lender. If you pay points when you buy your new home, these may be deducted in full in the year of purchase. However, if you refinance your loan, the points must then be deducted over the life of the new loan.
Appreciation:
As a general rule, homes will appreciate about three or five percent a year. Now with our current economic downfall, this obviously isn't the case, but if you wait it out, the real estate market is gonna come back. Homes will begin to appreciate again and this is why it's so important to take advantage of low prices now.
Some years appreciation will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region. You might say five percent may not seem like that much at first but look around at financial institutions and tell me where you can do better?
Say you bought a $250,000 house with a comfortable mortgage. Suppose you put as little as five percent down...that would be an investment of $12,500.
At an appreciation rate of 4% annually, a $250,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $12,500. Your annual "return on investment" would be a whopping (80%) eighty percent.
Additionally, you are making mortgage payments and paying property taxes, along with a couple of other costs. And remember those tax deductions? Well, with all the deductibles you're eligible for, the government is essentially subsidizing your home purchase.
Homeownership's Greatest Tax Advantage:
Probably the greatest advantage of home ownership occurs when you decide to sell your home. If you have owned and lived in your personal residence for two out of five years, you can sell the home and not be taxed on a profit up to $250,000 for singles and $500,000 for couples.
As you can see, homeownership has its perks and just about every homeowner receives a tax refund every year. Yes! You actually save money while Uncle Sam hands over a check, just because you bought a home.
If you're a homeowner, perhaps you identify with budgeting, living paycheck to paycheck. In fact, it's cheaper nowadays to buy a home instead of renting.
Uncle Sam has thrown you an amazing tax shelter that's beyond compare. You may deduct the mortgage interest paid on your loan and deduct the property taxes paid to your state. These deductions are based on you itemizing your deductions on your tax return. And if you are not a homeowner yet, this tax benefit is significant enough to make you look seriously at home ownership. There are of course, exceptions to every deduction. One of the complexities of home ownership tax deductions surrounds points.
Points are one type of fee paid at closing to your lender. If you pay points when you buy your new home, these may be deducted in full in the year of purchase. However, if you refinance your loan, the points must then be deducted over the life of the new loan.
Appreciation:
As a general rule, homes will appreciate about three or five percent a year. Now with our current economic downfall, this obviously isn't the case, but if you wait it out, the real estate market is gonna come back. Homes will begin to appreciate again and this is why it's so important to take advantage of low prices now.
Some years appreciation will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region. You might say five percent may not seem like that much at first but look around at financial institutions and tell me where you can do better?
Say you bought a $250,000 house with a comfortable mortgage. Suppose you put as little as five percent down...that would be an investment of $12,500.
At an appreciation rate of 4% annually, a $250,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $12,500. Your annual "return on investment" would be a whopping (80%) eighty percent.
Additionally, you are making mortgage payments and paying property taxes, along with a couple of other costs. And remember those tax deductions? Well, with all the deductibles you're eligible for, the government is essentially subsidizing your home purchase.
Homeownership's Greatest Tax Advantage:
Probably the greatest advantage of home ownership occurs when you decide to sell your home. If you have owned and lived in your personal residence for two out of five years, you can sell the home and not be taxed on a profit up to $250,000 for singles and $500,000 for couples.
As you can see, homeownership has its perks and just about every homeowner receives a tax refund every year. Yes! You actually save money while Uncle Sam hands over a check, just because you bought a home.
Tuesday, January 25, 2011
Downsize Your Lifestyle To Upgrade Your Life
Many people are responding to our economic downfall by spending less money. Downsizing in every which way they can. Less has really become "More"; in fact, Less is the new trend.
Cutting back on your spending can easily leave you feeling deprived if you view it in a negative light. But focusing on the fact that you can't afford the lifestyle you'd like right now will only lead to a worse quality of life. The question is what are you willing to change in your life to achieve your goals?
Shifting your focus away from what you wish you had, though, frees you to take a closer look at what you actually do have right now. It's then that you can discover hidden treasures in your situation. Could it be that living with less money could lead to more satisfaction? That's what our family has found. Downsizing our lifestyle has led to a richer life than we ever could have experienced if we'd spent lots of money.
Here are some ways you can downsize your lifestyle to upgrade your life:
Move to a less expensive home. Freedom from the pressures of a large mortgage payment is priceless. The monthly mortgage payment is generally the largest single expense consumers face. It routinely accounts for 30% or more of your gross income. A small home also means less space to have to clean, lower utility bills and property taxes, and fewer repairs to handle. How many of your resources are tied up in your house? If you make the right move, you might be able to trade in your house and use the profit from the sale to purchase your next home in cash.
Eat out less. But the benefits of eating at home aren't just financial. When you make your own meals, you can control what ingredients go into them and prepare food in healthier ways than you'd typically find at restaurants. If restaurant meals are breaking your budget, try eating all your meals at home for a certain period of time and see how much money you have saved.
Eliminate extras. Unnecessary indulgences like fancy coffee shop drinks and high tech gadgets that do what you can do yourself can waste a lot of your hard-earned money. When you let go of them, you learn how to separate what you truly need from what you merely want.
And finally, change the way you think about life and money.
Think about these mind set changes; if it cost money, then do not buy it. Find it for free or do without.
Ask yourself, do I really need it and can I really live without it?
Remember, life is not over when you eliminate a few material possessions.
Cutting back on your spending can easily leave you feeling deprived if you view it in a negative light. But focusing on the fact that you can't afford the lifestyle you'd like right now will only lead to a worse quality of life. The question is what are you willing to change in your life to achieve your goals?
Shifting your focus away from what you wish you had, though, frees you to take a closer look at what you actually do have right now. It's then that you can discover hidden treasures in your situation. Could it be that living with less money could lead to more satisfaction? That's what our family has found. Downsizing our lifestyle has led to a richer life than we ever could have experienced if we'd spent lots of money.
Here are some ways you can downsize your lifestyle to upgrade your life:
Move to a less expensive home. Freedom from the pressures of a large mortgage payment is priceless. The monthly mortgage payment is generally the largest single expense consumers face. It routinely accounts for 30% or more of your gross income. A small home also means less space to have to clean, lower utility bills and property taxes, and fewer repairs to handle. How many of your resources are tied up in your house? If you make the right move, you might be able to trade in your house and use the profit from the sale to purchase your next home in cash.
Eat out less. But the benefits of eating at home aren't just financial. When you make your own meals, you can control what ingredients go into them and prepare food in healthier ways than you'd typically find at restaurants. If restaurant meals are breaking your budget, try eating all your meals at home for a certain period of time and see how much money you have saved.
Eliminate extras. Unnecessary indulgences like fancy coffee shop drinks and high tech gadgets that do what you can do yourself can waste a lot of your hard-earned money. When you let go of them, you learn how to separate what you truly need from what you merely want.
And finally, change the way you think about life and money.
Think about these mind set changes; if it cost money, then do not buy it. Find it for free or do without.
Ask yourself, do I really need it and can I really live without it?
Remember, life is not over when you eliminate a few material possessions.
Monday, January 24, 2011
Buying Unfinished Homes
Unfinished homes present a great way to save a ton of money and get yourself a new home in the process. If you buy an unfinished home, you can keep your monthly mortgage payment low and also lower your initial investment. You may also be able to buy a larger foundation size as well, which you can easily add on to and save money in the process.
Normally, unfinished starter homes leave the upstairs area unfinished. The question here is just how much equity you want to put into an unfinished area. Before you make a purchase, you should always decide how much money you have to finish what needs to be finished.
If the home you are looking at has plans for a garage, you can save thousands if you decide not to go with the garage; and the best part is – you can get it finished at half of what the builder is charging. On the other hand, if there is another attached room that is planned to go onto the house, you can save just as much if you decide to forgo it. There are always ways that you can save money just by looking at the plans. Unfinished homes may have other planned on additions as well, in which you can save a lot of money just by leaving them out.
This is something that you should always keep in mind. When builders acquire a piece of property that they plan to build a home on, they will do everything they can do to make as much money as possible on their homes. You might be able to get them to agree to some of these ideas, although they probably won’t agree to all of them. Building homes can be a very profitable business - which is why most companies like to build their homes exactly as the plans call for.
As most of us already know, buying an unfinished home provides an excellent way to get into the housing market and get your very own home. Unfinished homes also allow potential buyers the chance to grow into their home along with their family. If you are interested in saving money, you should be sure to talk to the builder. This way, you can go over the plans and decide what doesn’t need to be there.
In most cases you can save a lot of money and still get a home that will provide years and years of memories for yourself and your entire family.
Normally, unfinished starter homes leave the upstairs area unfinished. The question here is just how much equity you want to put into an unfinished area. Before you make a purchase, you should always decide how much money you have to finish what needs to be finished.
If the home you are looking at has plans for a garage, you can save thousands if you decide not to go with the garage; and the best part is – you can get it finished at half of what the builder is charging. On the other hand, if there is another attached room that is planned to go onto the house, you can save just as much if you decide to forgo it. There are always ways that you can save money just by looking at the plans. Unfinished homes may have other planned on additions as well, in which you can save a lot of money just by leaving them out.
This is something that you should always keep in mind. When builders acquire a piece of property that they plan to build a home on, they will do everything they can do to make as much money as possible on their homes. You might be able to get them to agree to some of these ideas, although they probably won’t agree to all of them. Building homes can be a very profitable business - which is why most companies like to build their homes exactly as the plans call for.
As most of us already know, buying an unfinished home provides an excellent way to get into the housing market and get your very own home. Unfinished homes also allow potential buyers the chance to grow into their home along with their family. If you are interested in saving money, you should be sure to talk to the builder. This way, you can go over the plans and decide what doesn’t need to be there.
In most cases you can save a lot of money and still get a home that will provide years and years of memories for yourself and your entire family.
Thursday, January 20, 2011
Buying A Home At A Discount
Real estate is no exception when we talk about how inflation has affected each and every aspect of our life. At first, buying a home was only a matter of selecting your area, surveying places around it and making a decision. Times have changed now and the first thing that you bring under consideration is affordability. Not that you didn'’t worry about finances back then, but you at least knew you weren’'t over paying for your property. So the name of the game, when it comes to buying real estate today, is not only to get the best house of your liking but also to get the best financial deal for yourself.
Short Sales:
So what do you do to get a discount while buying your dream home? The first step that you can take in order to find good financial deal on your next house is reviewing Short Sales.
A short sale means a sale that falls short of the amount owed on the mortgage. They happen only when the seller can't come up with the cash to pay off the difference. Most important, though, is that they can happen only when the lender agrees to accept the reduced payoff. However, it doesn’'t mean the lender will agree to sell to you in all cases.
Lenders aren't in the business of accepting less than they are owed, so few short sales make it to the finish line. The best way to go about it is to hire an agent who has experience with short sales. He knows how to find people who are looking to sell. First, find out if the bank even has a clue that the seller is trying for such a deal; it would be a complete waste of time to try and bargain with the seller just to have the bank refuse the deal.
Foreclosures:
Another way to look for a discounted deal is to look for foreclosures. Everyone has heard about foreclosures and the overwhelming inventory available. Situations like this usually give rise to discounted prices, especially in today’s times, because of the large inventory of homes sitting on bank books.
Buyer Beware; this process is lengthy and buying a foreclosed home can be full of pitfalls. If you have this picture in your mind of a well-maintained family home, surrounded by a white picket fence that is owned by an elderly woman who couldn’'t keep up with mortgage payments, think again. Those types of foreclosures are few and far between. Unless you are a licensed general contractor, bring someone who is highly knowledgeable about construction with you.
Many foreclosed homes need repairs and most have been gutted by squatters looking to sell the best features of the home. Assuming that you’'ve done all your homework and you still want to purchase that foreclosed property, your real estate agent will make an offer to the bank.
Best advice before getting to this point is while seeking that foreclosed home, get your financing complete with pre-approvals. The deal will go a lot smoother if the bank sees that all the foot work has been completed.
Short sales and foreclosures are just two options available to you. And, while they may be challenging deals to put together, they can be a great avenue towards home ownership.
Short Sales:
So what do you do to get a discount while buying your dream home? The first step that you can take in order to find good financial deal on your next house is reviewing Short Sales.
A short sale means a sale that falls short of the amount owed on the mortgage. They happen only when the seller can't come up with the cash to pay off the difference. Most important, though, is that they can happen only when the lender agrees to accept the reduced payoff. However, it doesn’'t mean the lender will agree to sell to you in all cases.
Lenders aren't in the business of accepting less than they are owed, so few short sales make it to the finish line. The best way to go about it is to hire an agent who has experience with short sales. He knows how to find people who are looking to sell. First, find out if the bank even has a clue that the seller is trying for such a deal; it would be a complete waste of time to try and bargain with the seller just to have the bank refuse the deal.
Foreclosures:
Another way to look for a discounted deal is to look for foreclosures. Everyone has heard about foreclosures and the overwhelming inventory available. Situations like this usually give rise to discounted prices, especially in today’s times, because of the large inventory of homes sitting on bank books.
Buyer Beware; this process is lengthy and buying a foreclosed home can be full of pitfalls. If you have this picture in your mind of a well-maintained family home, surrounded by a white picket fence that is owned by an elderly woman who couldn’'t keep up with mortgage payments, think again. Those types of foreclosures are few and far between. Unless you are a licensed general contractor, bring someone who is highly knowledgeable about construction with you.
Many foreclosed homes need repairs and most have been gutted by squatters looking to sell the best features of the home. Assuming that you’'ve done all your homework and you still want to purchase that foreclosed property, your real estate agent will make an offer to the bank.
Best advice before getting to this point is while seeking that foreclosed home, get your financing complete with pre-approvals. The deal will go a lot smoother if the bank sees that all the foot work has been completed.
Short sales and foreclosures are just two options available to you. And, while they may be challenging deals to put together, they can be a great avenue towards home ownership.
Wednesday, January 19, 2011
Update on the Region's Home Sales
Bargain prices and low interest rates helped Southern California home sales surge 20.5% last month over November, but activity lagged far behind that of December 2009.
San Diego based MDA DataQuick said 19,528 homes sold last month in the 6-county area, up from 16,208 sold in October but down 12.5% from the 22,328 sold a year ago.
Sales have increase an average of 12.9% since DataQuick began compiling statistics in 1988, the firm said.
"Ultra-low mortgage rates, coupled with lower prices, gave the market a boost this fall, helping to explain the above-average gain in closings between November and December," DataQuick President John Walsh said. "We will see the potential for sales to perk up this spring if rates stay low and brighter economic news lifts consumer confidence."
The region's median home price increased 0.3% to $290,000 last month from $289,000 in December 2009 and grew 1% from $287,000 in November, stated DataQuick.
In Los Angeles County, homes sales tumbled 14.9%, from 7,679 sold in December 2009 to 6,536 last month. The median price fell 2.7%, from $339,000 to $330,000.
Neighboring Ventura County saw a 15.1% dip in sales, from 896 to 761. Prices remained stagnant, edging up from $289,000 to $290,000.
The firm said the sluggish job market and tight credit conditions were keeping the median from appreciating much over the previous year's prices.
The median was also being tugged down by weak sales of new homes, which reached their lowest level for a December since DataQuick began keeping records.
Note: This article originally provided by The Associated Press
San Diego based MDA DataQuick said 19,528 homes sold last month in the 6-county area, up from 16,208 sold in October but down 12.5% from the 22,328 sold a year ago.
Sales have increase an average of 12.9% since DataQuick began compiling statistics in 1988, the firm said.
"Ultra-low mortgage rates, coupled with lower prices, gave the market a boost this fall, helping to explain the above-average gain in closings between November and December," DataQuick President John Walsh said. "We will see the potential for sales to perk up this spring if rates stay low and brighter economic news lifts consumer confidence."
The region's median home price increased 0.3% to $290,000 last month from $289,000 in December 2009 and grew 1% from $287,000 in November, stated DataQuick.
In Los Angeles County, homes sales tumbled 14.9%, from 7,679 sold in December 2009 to 6,536 last month. The median price fell 2.7%, from $339,000 to $330,000.
Neighboring Ventura County saw a 15.1% dip in sales, from 896 to 761. Prices remained stagnant, edging up from $289,000 to $290,000.
The firm said the sluggish job market and tight credit conditions were keeping the median from appreciating much over the previous year's prices.
The median was also being tugged down by weak sales of new homes, which reached their lowest level for a December since DataQuick began keeping records.
Note: This article originally provided by The Associated Press
Tuesday, January 18, 2011
6 Common Mistakes Homebuyers Still Make
Getting a new home is easy but tricky at times. Many buyers are encountering stumbling blocks en route to their chosen house. This is because they commit minor mistakes along the way that hinders smooth processing. This can be prevented only if you are familiar with these common mistakes.
1. Having no pre-arrangements with the bank for mortgages before making an offer is the most popular mistake. Communicate with a bank to know the price range you are capable of paying and other mortgage details that you need to know.
2. Knowing your exact budget is critical. Most people look around for houses even without the budget in mind. First thing you need to know before finding a home to purchase is how much you can pay for a new home. You can save much time if you trim down your list of houses based on its price; imagine finding that dream home only to find out you won’t be approved for the mortgage?
3. Getting unreliable and inexperienced real estate agents is a big no-no. Choose an agent that has the background to back him or her up. Also, consider the real estate companies you are dealing with. Make sure that they have a good standing in terms of the services they are providing.
4. Most people are shopping around within a limited market. You can find homes for sale anywhere such as internet, print ads, and even on TV. You may also want to ask for help from your agent to provide you a list of preferred houses. You can save time if you know what kind of house you are looking for.
5. Purchasing a home long distance without thorough inspection is a mortal mistake. After choosing a home, it is a must to visit it personally so that you can see it in a closer view. Some pictures only show the good angles of the house. It can be very deceiving at times. Check the structure and foundation to ensure safety. Also, look around the neighborhood and get comfortable with it.
6. Buyers tend not to compute the total cost of the house. Other expenses such as home insurance, association dues and even lawyer's fee for proper documentation of the purchase should be considered. We are not talking about coins here. These range from hundreds of dollars to even thousands. You need to prepare your pocket for it.
Buyers are usually not aware of all the details. It is your home and you are responsible for it. You need to know and understand everything about it, from home warranty to insurances and even the history of the house.
Tuesday, January 4, 2011
Equity Sharing For First Time Home Buyers
Looking to take advantage of the low interest rates coupled with a healthy inventory of low-priced homes? Are you worried about the down payment requirements? Consider Equity Sharing.
Equity Sharing is a creative approach for those who can afford a monthly mortgage but have not saved up enough for the initial down payment. It is also a way for people to make relatively a low risk investment in real estate which provides wonderful tax benefits.
For example, an equity-sharing arrangement enables parents or another party to contribute all or part of the down payment for the intended occupants; the rules will probably differ depending if you are equity sharing with your parents or an investor.
The investor will be listed on the title and are paid rent for their ownership stake, which can be put toward such expenses as insurance, maintenance, and property taxes that can be deducted from their income taxes.
For an agreed number of years, the first-time homebuyer will live in the home, and keep it up; at the end of the agreed term, the occupier buys out the investor by repaying his contributions plus an agreed percentage of the appreciation. If the occupier doesn't want or can't afford the buyout, the property is sold, each owner gets their contributions, and any profits are shared.
Equity sharing's greatest advantage to a first time homebuyer is to become a homeowner long before he/she could save up money for a down payment. The Investor's greatest advantage is to earn a portion of the home's equity appreciation without paying its expenses...a win-win if the contract terms are agreed upon.
Most Importantly: Consult a Real Estate Attorney
When buying real estate with another person, first time homebuyers need to decide how title will be held, and your decision will determine what is written on the deed to the property.
Usage Rights are very important because they are the most common subjects of shared ownership disputes particularly among groups of friends or relatives.
The donation of funds to purchase the home will determine how much each co-owner will contribute to the purchase of the property and how the future rights and benefits of this ownership will be allocated among the co-owners.
Sure, this arrangement sounds good, especially when a first time homebuyer finds their dream home but remember, no matter how friendly co-owners might be, it is essential to have a formal backup plan in case things don't turn out as planned.
Equity Sharing is a creative approach for those who can afford a monthly mortgage but have not saved up enough for the initial down payment. It is also a way for people to make relatively a low risk investment in real estate which provides wonderful tax benefits.
For example, an equity-sharing arrangement enables parents or another party to contribute all or part of the down payment for the intended occupants; the rules will probably differ depending if you are equity sharing with your parents or an investor.
The investor will be listed on the title and are paid rent for their ownership stake, which can be put toward such expenses as insurance, maintenance, and property taxes that can be deducted from their income taxes.
For an agreed number of years, the first-time homebuyer will live in the home, and keep it up; at the end of the agreed term, the occupier buys out the investor by repaying his contributions plus an agreed percentage of the appreciation. If the occupier doesn't want or can't afford the buyout, the property is sold, each owner gets their contributions, and any profits are shared.
Equity sharing's greatest advantage to a first time homebuyer is to become a homeowner long before he/she could save up money for a down payment. The Investor's greatest advantage is to earn a portion of the home's equity appreciation without paying its expenses...a win-win if the contract terms are agreed upon.
Most Importantly: Consult a Real Estate Attorney
When buying real estate with another person, first time homebuyers need to decide how title will be held, and your decision will determine what is written on the deed to the property.
Usage Rights are very important because they are the most common subjects of shared ownership disputes particularly among groups of friends or relatives.
The donation of funds to purchase the home will determine how much each co-owner will contribute to the purchase of the property and how the future rights and benefits of this ownership will be allocated among the co-owners.
Sure, this arrangement sounds good, especially when a first time homebuyer finds their dream home but remember, no matter how friendly co-owners might be, it is essential to have a formal backup plan in case things don't turn out as planned.
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