Juicy Words

Time To Sell

We all know it’s the American Dream to own a home. Ever since WWII ended and millions of US Servicemen came home, got married and found a place to live, the ideal situation was that they’d buy a small home to raise that family. NorthEast builders came up with the idea of “developments” and places like Levit town were born, where thousands upon thousands of smallish homes were built on 50 by 100 lots. It was the first “housing boom.” Well, the tradition of owning one’s home runs deep in our psyches, but the question becomes this: Is buying a house in this particular day and age really wiser than renting? Don’t laugh, you might be surprised at the answer.

There are two particularly attractive reasons to own your own home. One is that it might appreciate in value and your “net worth” becomes greater. The other is that you can write off the interest payments and the taxes that you pay your municipalities. Okay, those are definite pluses. On top of that you get to make the house the way you want it. If you want to punch a hole in the wall, you do it. There is a lot to be said for the personal freedom of doing what you want.

On the other hand, a house is just as much a liability as it is an asset. Each month the mortgage is coming in, the taxes are going up, you have to insure it, and then there are repairs to consider. But, much more importantly, we have to consider the “timing” issue involved in housing. What do I mean by that? Well we’ve seen an incredible rise in housing over the past three years, spurred by low interest rates, looser standards and of course the stock market melt down of 2000 - 2002.

Let’s suppose you were to buy your average 250K dollar home up in the North East. ( or you just happen to already own one) Let’s suppose you put down 10% and mortgaged the rest. Okay, so you coughed up 25 grand, and are mortgaging 225 grand at 5.5%. Your mortgage payment is 1,327 dollars a month for 30 years. Toss about 5 grand worth of taxes on top of that, and you are probably at 1700 per month. If you were to hold that mortgage for all 30 years, you would pay 234,906 dollars in interest.

What did you get for your 234K in interest rates? Well you got to write down your income taxes. But you don’t get 234 grand “back” you just don’t have to pay taxes on the income that would amount to 234 grand. (over the life of the loan) If you held that house for 30 years, how much do you think you put in it for repairs? New appliances, hot water heaters, two roofs, repave the driveway, cut the lawn, removed trees, replaced the windows, etc etc etc? A ton. No one can even put a price on it. But, for our little exercise let’s just say that in 30 years you paid 30 grand in repairs. So, we’ve paid 264K above the homes 250 K dollar price tag. Oops. Taxes. Lets say that your property taxes are 5 grand a year. In 30 years, guess what? There’s another 150K dollars. Insurance? Say 500 a year, there’s 15 more grand. Water and sewer? Another 10 to 12 grand.

Without going silly, we see that a 250K dollar house is going to cost us about 664,000 when we finally light that last mortgage payment on fire. So, even if the house doubles in price and “then some” , and you can sell it for that amount, you didn’t “make” a penny did you? Nope. The only way you make out on this scenario is if it’s worth more than 664K grand 30 years from now. But we have a problem don’t we? What’s that? Well if a house is 250K right this second, and interest rates are at 40 year lows, you can bet that the house is already as expensive as it’s ever been. Are interest rates going to be below 5.5% in 30 years? Probably not ( although we have no idea) In other words, who’s to say that housing is going to double in 30 years? No one knows, it’s a gamble. But worse..even if you sell it for 664K grand, you still have to live somewhere. Not only didn’t you actually make any money, you have to move somewhere and pay money there too.

The fact of the matter is that real estate has been a tremendous performer, but I tend to think it’s run it’s course. Would I be against someone selling at the present, taking their huge profits and renting for a few years just to see if housing falls? Not at all. In fact, if you read these numbers over and over, it might just sway you to consider it. There is no doubt that sometime in 05 rates are going up. When rates go up, prices fall, but this time it’s even going to be worse. So many people are going to be trapped because of refinancing that they are going to “walk away”. Foreclosures will soar. It could get ugly.

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Your Trans National Property Space — Served by The Property Index Online Company

If you are looking to buy property abroad try Property Index, specialists in overseas property.

Regardless the fact that the Property Index online service is really a rather young corporation, (they were registered in March 2007), they have gained in reputation very quickly. In point of fact a extraordinarily accessible corporation concentrated on helping essentially anyone who is dedicated to let, sell etc. land in most areas of the world. Their promise: to help you out find squarely what’s looked for fast as well as sans hassle. Real estate is up for grabs in most areas of the world at present, one of the choicest areas being properties for sale in Spain. It should be no problem to determine the great properties on the market in Spain, one rationale for opting for realty here being the houses and apartments you can purchase and the ripping possibility to live amongst this optimistic and exciting people.

It’s one of the most popular regions at present, and with the beauty and weather surrounding you here, how could you say no.? Real estate in Spain is steeped in history, art and culture, this geographical region is and has always been home to a good number of cultures. About thirty years back you would find just a trickle of English in search of properties in Spain. Just ask any individual who has removed to Spain and they’ll corroborate it. Many people would see it as a craze and others see it as a near to an infatuation. Buyers that are willing to relocate over here will range from young freshly weds keen on a life perspective to older generations looking to loosen up.

Bear in mind, however, that you may hit on a few hitches when acquiring properties abroad — it stands to reason that there are dozens of heterogeneous, not always very logical, steps whether strategising, calling in or buying. Even if one single minor procedure is missed this can easily kick up comprehensive hitches plus, of course, preeminently, monetary loss. Obviously and expectably with this trendy region, properties may well be extraordinarily pricey in this place which is, of course, basically because of the high buyer demand. Despite this the homebuyer really is somewhat spoilt for choice in a part of the world blessed by pleasant vista. It’s patently got all, stock and barrel, a client may ever need, and then some.

Mortgage Loan - Your Mortgage Lender and Their Dirty Little Secrets

If you are in the market for a mortgage or a home equity loan, you need to do your homework before signing on the dotted line. There are a number of common mortgage mistakes that can cost you thousands. Many mortgage lenders rely on you making mistakes so they can charge you more.
There are a number of gimmicks mortgage lenders use to trick unsuspecting homeowners into paying more.

Here are tips to help you avoid being taken advantage of by your mortgage broker or lender.

Prepayment Penalties

A prepayment penalty is a fee your lender charges if you refinance the mortgage or sell your home. This penalty usually only applies for the first five years of the mortgage; however, some lenders try and slip more stringent conditions in their loan contracts. The actual penalty varies by lender; however, you may be required to pay as much as six months interest on 85% of the original loan balance if you refinance or sell before the penalty expires.

Don’t accept a mortgage with a prepayment penalty. If you have good credit there is no reason to choose a lender that uses this penalty. The mortgage industry is extremely competitive and your credit rating is an excellent bargaining chip for any mortgage company to have your business. If the lender refuses to remove the prepayment penalty from the contract, take your business elsewhere.

If you have bad credit you may be stuck with the prepayment penalty. You should negotiate with the lender for less stringent terms on the contract. If you can get the lender to lower the duration of the penalty to one year or set the amount to a lesser value you will be better of when you refinance to a better mortgage.

Discount Interest Rates

If you see a lender advertising a mortgage with an abnormally low interest rate, say three percent for example, this is a “discount interest rate.” Discount rates are used to lure in homeowners that don’t know any better.

Discount interest rates are only good for an introductory period. At the end of the introductory period the lender will adjust the discount interest rate to the actual rate; this actual interest rate is usually buried somewhere in the fine print. When the lender adjusts the interest rate at the end of the introductory period the monthly payment goes up dramatically. These gimmicky types of mortgage loans often come with variable interest rates which may or may not have interest rate caps.

To learn more about mortgage lender gimmicks and how to avoid paying too much for your mortgage, sign up for a free mortgage guidebook.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

St Louis Mortgage Refinance

Louie Latour is a mortgage professional and the owner of RefiAdvisor.com, a mortgage resource site offering a free gift for homeowners: “Mortgage Refinance: What You Need to Know.” This guidebook helps homeowners avoid common mortgage mistakes and predatory lending practices.

Claim your free gift today at: http://www.refiadvisor.com

What To Look For When Buying Home? So Many — but They’re Necessary

A foremost consideration for what to look for when buying home would be your funds. It’s easy to spot what kind of a house you’d like to make your new home — no need for education there, just a matter of taste — but how much could you afford to buy is another matter altogether that should not be ignored. You cannot go out and make an offer on a mansion that’s in the heart of the city, definitely not when you are working on a budget that’s a pittance. Finance wizards will tell you readily that you should not buy too much of a house when you don’t have the money for it.

Now, when you have considered the limitations of what you could actually afford, the next step to do in your list of what look when buying home would be location. The property you are about to buy should be in a place that’s just “a stone’s throw away,” so to speak, for the sake of convenience. Take into consideration that, since you’d be shelling out a big slice of your liquid assets to pay for the house up front or for down payment (if it’d be on an installment basis), you won’t have too much left for other basic needs like transportation for yourself and your family, for example. Even the time you’d have to spend stuck in traffic would be precious commodity if your house would be located too far from most of those places you frequent, like your place of work, the church you go to on Sundays, the marketplace and malls where you have to do your shopping, and a good school for your children. So consider strategic location seriously.

Last, but not the least, in your list of what to look for when buying ahome would be comfort and beauty. Of course, you’d want to be the proud owner of a home that you would not hesitate to show off to your friends or to your boss or, if you’re single, to your boss’ single daughter you might have been drooling over, too, for some time now. Your house should not be garish. Keep in mind that a house that is “garish” is tasteless and ugly, and does not give a good impression of the owner. Simple and practical are beautiful — opt for simplicity and functionality in your house style and in your choice of furniture and fixtures, and you’d earn the admiration of your peers and higher-ups. Your home is an extension of yourself. It is a place of your comfort and peace of mind. Do not make it anything less by a display of poor taste.

Brian Shelton makes home
buying in the Dallas easy! Visit http://www.StopRentingDFW.com/

How I Became a Real Estate Investor

Recently I closed on the sale of two homes. They were located about a mile apart and had comparable market values. However, beyond these two similarities, the two deals were very different from each other. Let me discuss in more detail the similarities and differences of the two deals.

My business partner and I purchased both properties from families who were in preforeclosure. The leads for each property came from letters that I had mailed to families who had recently received Notices of Default. The one family responded to me within 24 hours of receiving my first letter. I met with them within two hours of receiving their phone call and signed a contract with them on the spot to purchase their home. The other family responded to me after receiving the fourth letter from me. After a couple of broken appointments and two meetings we signed a contract to buy their home. With each home we did a “kitchen table” type closing within a couple of days of signing the contract. Both homes were purchased “subject to” the existing financing remaining in place. The earnest money given for each home was one dollar.

First Deal

We began marketing the first house by advertising it in the newspaper at market value and putting signs in the neighborhood and nearby intersections. We had a verbal agreement with the seller that they would clear all of their belonging out of the house within two weeks. The house was very messy and dirty. When the sellers failed to make any progress clearing the house we went ahead with the marketing and reduced the asking price. Within two weeks we had only received a few phone calls from mostly non-interested prospects.

At this point we reduced the asking price further and changed our signs to notify the public that owner financing was available. At that point we started to get a larger number of phone calls from truly interested prospects. Our owner financed terms and the lower than market value asking price separated us from the hundreds of realtor represented homes that needed bank financing.

With the second home, purchased a month later than the first, we immediately marketed it with owner financing. When we purchased the home we stipulated in the contract that the seller had to vacate the property in two weeks or be charged a fee for failure to do so. The seller was agreeable and cooperative and moved quickly to remove their belongings from the house. The seller of the first house was still dragging their feet and the house was still a mess.

Shortly after changing the marketing of the first house, we received an offer from a highly interested buyer. This house was truly ideal for this family and we wanted to help them get into it. They offered to buy it with bank financing and we agreed to sell it to them. There was still enough time before the foreclosure auction to close the sale with bank financing.

I cautioned the buyer that he should seek a loan other than an FHA loan since we had not held title to the property long enough for FHA to approve a new loan. In case you didn’t know, FHA recently changed a rule that now requires a property to be on title at least 90 days before they will approve a new loan. So guess what the buyer did?

Right. His mortgage broker and his real estate agent steered him toward an FHA loan program. Luckily, the buyer qualified for a good FNMA program as well. So I stipulated in the contract that the buyer had to gain approval for the FHA program within 5 days or else drop the FHA program and proceed with the FNMA program. Both the broker and the agent needed education on this point, which I provided in writing, and four days later the broker notified me that the buyer would not be approved by FHA and that they were proceeding with the FNMA program.

The next obstacle we faced was the home inspection. The inspection resulted in asking for several hundred dollars worth of repairs that we agreed to do. The repairs took two weeks to complete. While repairs were ongoing we ordered a property appraisal. The appraisers in our area are backlogged eight weeks but we knew an appraiser who would perform an appraisal within a week for 150% of his normal fee. Of course we didn’t have the luxury of being able to wait eight weeks so we bought the expensive appraisal.

The next obstacle was to order a preliminary title search, which showed a clear title luckily. The previous owner did not have an as-built survey so we had to order an expensive set of survey documents from the county.

Now that the obstacles to closing were nearly erased and we were close to a hard closing date, we still had a problem with the previous seller. They had only moved a few things out of the house and the house was still well cluttered. They were getting around to moving out eventually but not fast enough to be out of the house before closing the sale. Their lack of cooperation and their inability to follow through with their verbal promises made it clear why they had neglected their home and let it go into foreclosure.

Since the utilities were turned off and the seller was no longer living in the home I had the legal right to declare their belongings as abandoned property and I notified them that I would move the items out for them. My partner and I spent a day boxing and bagging up the seller’s personal items, and grudgingly they picked the boxes and bags up the day before closing. Whew!

Second Deal

Now, on the other hand, events with the second property proceeded much more smoothly. We bought the home, found a buyer for it within eight days, and closed on the sale eight days later.

We decided to sell the second home on a land contract or wrap mortgage with the existing financing remaining in place. We also decided to stipulate that the home had to be refinanced within two years or it would be foreclosed back to us. We did this to protect the previous seller’s interest in the underlying financing. They didn’t want it hanging out there for a long period of time.

Our “owner finance” signage attracted several buyers quickly. We required a large enough down payment to “cure” the loan, that is, to pay off the existing arrearage and attorney fees. We found an eager buyer who had sufficient cash on hand and a good income, but without enough time in the area to have a high credit rating. He understood the concept of the wrap mortgage and the underlying financing and we negotiated a contract with him at Starbucks. He negotiated a lower sale price by offering a larger down payment. Basically we were able to immediately receive all of the “back end” profit that would have been paid to us in two year’s time when he refinanced. We received this up front in exchange for a lower sales price. It was a fair exchange for both parties.

He agreed to buy the home “as is” and to do some repairs himself. No home inspection was needed; no appraisal was needed; no repairs had to be made; no real estate agent needed to be paid; and no survey had to be ordered. The buyer paid all of the closing costs which were far less than he would have paid if he had used a real estate agent and a mortgage broker.We used a closing agent who is very familiar with transactions of this type, which she calls “unacknowledged wrap sales.” Our closing agent has become a friend and has spoken at our local Real Estate Investment Club.

In summary, each of the two deals netted about the same profit, but it is obvious which deal one would prefer to do if given a choice. If I were Robert Kiyosaki I might call one deal my rich dad’s deal and the other my poor dad’s deal. We learned enough to make deals of the first type go more smoothly in the future but I’ll take deals of the second type every day of the week.

I hope all of your real estate investing deals proceed smoothly and quickly.

*****************************
Garry Gamber is a public school teacher and entrepreneur. He writes articles about real estate, health and nutrition, and internet dating services. He is the owner of Anchorage-Homes.com and TheDatingAdvisor.com.

Overseas property investment

Property markets around the world are seeing prices either slow or fall. Real estate in the USA has already fallen badly, and set off panic across global investment markets around the world. However, there still remain plenty of opportunities for the discerning property investor when investing in overseas property, but the keys to success don’t involve having lots of cash as much as doing proper research. To start with, when investing in property, keep a good eye on property news to get an idea of general trends. However, be warned that general trends are created from the assimilation of lots of micro trends - property types, and local variations in the property market. Therefore once you’ve identified what sort of property investment you are looking for - and where - you need to ensure you focus on studying your target market carefully. That’s the easy part. The long drawn out part occurs when you finally look to purchase a property. If you already own a home and are looking to move overseas, then you obviously may want to look at selling your house quickly. Luckily, there are various groups who sell house and home quickly. Once that’s cleared and opened your funds for the purchase of your overseas property. This is important, as regardless of the asking price, you still have a whole load of costs to take into account afterwards. This includes various sales taxes, commissions, and legal fees. However, don’t forget the cost of moving abroad as well - and that means travel costs not simply for yourself and your family, but also for your possessions, too. However, if you plan everything properly and meticulously, and look to your property investment for the long term, then you should hopefully be able to make a success of your property investment.

Need to Reduce Debt? Consider a Home Equity Loan

Now that we’re over half way through our first decade of the new millennium, it is interesting to look back and see how our attitude to debt has changed. It seemed that many of us had an invincible view towards our debt, brushing it under the carpet, extending our credit line further and secretly hoping that our numbers would come up on the Lotto.

Now that we’re all a little older with perhaps more responsibilities, we’ve decided that it is hard time we addressed the little problem of our credit card debt, head on. One of the most affective ways to do this is by taking out a home equity loan. In many cases, the equity in our home represents the only form of savings we have. It is important to reduce debt as quickly as possible in order to start saving money.

It is always good advice to shop around when looking for a home equity loan; this is because lenders will have different criteria. Some lenders are only in the poor credit home equity loan business as this allows them to charge more interest on the loan, while other lenders are more interested in the quality of the equity at stake.

A very good piece of advice when you have completed your home equity loan is to cut up or close the credit cards that contributed to your high debt. The worst possible situation is for you to start using the credit cards again. If you think you are at risk of doing this, cut them up immediately, your house is now at risk.

Adam Jackson of http://www.besthomeequity.net is a home repair expert striving to bring you the best free home repair and improvement information on the web.

Mortgage Company Quizzing - Here are the Questions You Need to Ask

If you process of finding a mortgage there are three important questions you need answered. Here are the questions you need to quiz your lender on.

Mortgages can be the most intimidating aspect of home ownership. As a homeowner it is easy to second guess your decisions; part of choosing the right mortgage is knowing the right questions to ask. Here are the questions you need answered.

Does This Mortgage Have a Prepayment Penalty?

Don’t accept a mortgage with a prepayment penalty. Plain and simple, unless you have really bad credit your should be able to negotiate for a mortgage that does not have a prepayment penalty.
Prepayment penalties serve to boost the lender’s income if you refinance or sell your home. In today’s mortgage market lenders are having to concessions in order to remain competitive. Because of this much of your mortgage is subject to negotiation. Do not settle for a loan with a prepayment penalty unless you absolutely have to. Accepting a loan with this penalty could cost you as much as six months worth of interest on 85% of the original loan balance if you refinance or sell your home.

Will the Lender Guarantee the Interest Rate?

Interest rates fluctuate on a weekly basis. The rate your lender quotes you could easily change from one day to the next. Ask your mortgage lender to lock in the interest rate quoted to you. Make sure the lender grants you enough time to close on the mortgage and that there is no fee for guaranteeing this interest rate. While you’re at it, ask the lender to lock in the points required to secure the guaranteed interest rate.

What Documentation is Required?

You want to close on the mortgage as quickly as possible to ensure you do not lose the guaranteed interest rate. Documentation is one aspect of the loan that could delay your closing. If the lender requires an appraisal or a survey make sure you have all of the required documentation in hand well before closing. If you are unable to provide all the necessary documentation before the expiration of the lock period you could lose your ideal interest rate.

To learn more about finding the perfect mortgage, sign up for a free mortgage guidebook.

To get your free mortgage guidebook visit RefiAdvisor.com using the links below.

Tucson Mortgage Refinance

Louie Latour has twenty years of experience in the mortgage industry as a mortgage broker. He is the owner of Mortgages Refinance Advisor, a mortgage help site devoted to saving homeowners money with a free guidebook Mortgage Refinance: What You Need to Know.

Sign up for your free guide today at: http://www.refiadvisor.com