CoverageMortgage unemployment insurance will pay your monthly mortgage for a period of time that depends upon the length of your unemployment or the length of time that was agreed upon when you signed up for the insurance. Generally, the policies will pay your mortgage anywhere from three to six months, though it may be possible (and more expensive) to purchase a policy that will pay out for a longer period than the six months. If you own a home and have sufficient equity you have three choices if you want to tap your equity: sell your home, take out a home equity loan or get a reverse mortgage. Although there are three types of reverse mortgages there are only two that are usually referred to. The most common reverse mortgage is formally called a Home Equity Conversion Mortgage (HECM).
This caused a collapse in the mortgage industry which then lead to stricter standards for getting home loans, and that in turn led to a lack of eligible buyers in markets where home prices have been artificially driven up because of the previously questionably approval process by mortgage lenders. This in turn is driving the price of home down. It'll also help you pay extra towards the principal. Making extra payments does help you get rid of debt faster. Now as far as current mortgage rates are concerned, 30 year fixed mortgage rates have dropped down to 6.04% from 6.14% as on November 22, 2008. Since rates are on a slowdown, and are expected to go down further, therefore, you can try out for a 30 year refinance. Also, you need additional cash. Therefore, you can look out for lenders offering refinance with a cash-out option.
Friday, October 2, 2009
Friday, September 18, 2009
Selling a Mortgage Note
If you had a significant gain on the sale of the home that you have spread over the life of the note, you may have to show all of the remaining gain once the note is sold. (Consult your tax adviser.) 3. You will take a discount on the remaining note balance due to the time value of money. Advantages of Selling a Mortgage Note:1. You receive a significant lump sum of cash, usually very quickly. 2. You can utilize this cash for lucrative business opportunities or just as a cushion for these tough economic times to ease anxieties. 3.An acceptable hardship can be any number of circumstances, however the most common include a divorce or separation, job loss or income decrease, military service, adjustable rate mortgage payment increase, death of family member, or medical bills or illness.
Washington Mutual in 2005.In following, Washington Mutual was bought out by JP Morgan Chase in September, 2008.Both companies were known for their high approval-rate-percentages regarding credit cards. Washington Mutual was also known for its high approval rate in home mortgages. Outside of a monthly or weekly payment to their 401K, an average person's understanding of the financial markets is based on the information sent to them by their employers. It is not your fault. You are just not given the right information. The money you invest needs to have a clear goal in order to have a successful outcome.
States to obtain a mortgage rate of less then 5% if one has solid credit.? Less then a year ago, rates at these levels were truly impossible to achieve.? Rates heading south gives United States citizens the chance to take advantage of the mortgage market and refinance under 5%; saving them several hundred dollars each month.
Washington Mutual in 2005.In following, Washington Mutual was bought out by JP Morgan Chase in September, 2008.Both companies were known for their high approval-rate-percentages regarding credit cards. Washington Mutual was also known for its high approval rate in home mortgages. Outside of a monthly or weekly payment to their 401K, an average person's understanding of the financial markets is based on the information sent to them by their employers. It is not your fault. You are just not given the right information. The money you invest needs to have a clear goal in order to have a successful outcome.
States to obtain a mortgage rate of less then 5% if one has solid credit.? Less then a year ago, rates at these levels were truly impossible to achieve.? Rates heading south gives United States citizens the chance to take advantage of the mortgage market and refinance under 5%; saving them several hundred dollars each month.
Mortgage Refi
DebtMany, many folks just like you signed on the subprime mortgage bandwagon, only to find just a few short years later that their payments have risen to an amount that they can no longer afford to pay. The problems with these types of mortgages is that the lender extended you more credit than you could handle in the first place - which is the main culprit behind the current financial crisis that is going on around the world right now. Layoffs are common during a recession, and there is no guarantee that you will be exempt from them. Make sure to have a Plan B ready, in case you need to make employment changes.4. Look for the silver lining-new opportunitiesIronically, sometimes a recession can cause particular industries to thrive. GSE conforming loan requirements before selling these mortgages on the secondary loan market to Fannie Mae and Freddie Mac. Investment banks such as Bear Stearns and Lehman Brothers then assisted the GSEs by pooling these mortgages together to attempt to diversify risk, thereby creating collateralized debt obligations called mortgage-backed securities that were sold to institutional investors. Companies like A.I.G. provided credit-default swaps ('CDS') that acted like insurance for institutional investors that purchased the mortgage-backed securities to protect them from defaults by the original borrowers. Owned, especially if they own more than one home 1003 Loan Application Recent appraisal or county property value assessment Copy of personal budget for all borrowers, including everything from debt payments to utility bills, from the monthly food budget to gym membership dues, and everything else the client's spends money onBesides all that documentation that you'll send directly to the lender via fax and/or overnight certified delivery, you'll also want to collect and file the following items for your own use and records. For your own records: Signed contract for your services (have an attorney create this for you) Signed legal disclaimer and release (could be part of the contract, have an attorney create this for you) Credit report, if they have a recent copy Most recent statements for all mortgages Check for your services (some states do not allow you to collect a fee for handling a loan modification for a client unless and until the work is complete and the modification was successful)If you do a good job collecting all this stuff beforehand, but are unsuccessful in modifying your client's loan, you can often convert the client into a short sale listing (if you are a real estate broker) or refer the client to a short sale expert.
Thursday, July 2, 2009
Foreclosures on the market
July is certainly good news, it came with predictions from economists that foreclosures will likely return to the market. Economists believe the drop in foreclosures was a result of a 'market leveling effect', which happen when supply and demand for a product draw closer to each other. If they are correct we may be seeing the first signs of real estate market recovery. When real estate prices began falling last year, no one could predict how drastic the effects of foreclosure would be on the real estate market. Distressed homeowners foreclosed on their homes and property values along with consumer confidence plummeted in historic rates.
In one form or another either through free market impacts or direct subsidies from the government paid by tax dollars, these bailout plans all asked the cautious to support the reckless. Many of the early bailout plans called for changing the terms of the mortgage note. This might have been easy in the days when banks held mortgages in their own portfolios, but it was much more difficult once these mortgages were bundled together in collateralized debt obligations and sold to parties all over the world. Even if it would have been possible to easily change the terms, the resulting turmoil in the secondary mortgage market would have caused higher mortgage interest rates.
There are two reasons a bank may accept a short sale: 1) the costs of foreclosure can cost a lender up to 18% of the loan amount, and 2) lenders do not want to carry properties on their books. Not all homes qualify for a short sale, says our personal financial expert Nathan Threebes. 'There must be evidence that home values have dropped in your area, the loan must be in or near default status, and the seller must show that financial hardship and a lack of assets prevent her from making up the difference,' Threebes says. There are two major consequences to conducting a short sale.
In one form or another either through free market impacts or direct subsidies from the government paid by tax dollars, these bailout plans all asked the cautious to support the reckless. Many of the early bailout plans called for changing the terms of the mortgage note. This might have been easy in the days when banks held mortgages in their own portfolios, but it was much more difficult once these mortgages were bundled together in collateralized debt obligations and sold to parties all over the world. Even if it would have been possible to easily change the terms, the resulting turmoil in the secondary mortgage market would have caused higher mortgage interest rates.
There are two reasons a bank may accept a short sale: 1) the costs of foreclosure can cost a lender up to 18% of the loan amount, and 2) lenders do not want to carry properties on their books. Not all homes qualify for a short sale, says our personal financial expert Nathan Threebes. 'There must be evidence that home values have dropped in your area, the loan must be in or near default status, and the seller must show that financial hardship and a lack of assets prevent her from making up the difference,' Threebes says. There are two major consequences to conducting a short sale.
Mortgage Companies
I will give you some clues about what to do, but before is good to understand what really is going on here?Real State Developers are now in turn, asking for a bailout. When homeowners attempt to work with a mortgage company or servicer on their own to put together a plan to pay back the arrears on the loan, many find that they are offered a bad to impossible deal by the lender. Too often, though, borrowers take anything they can get, even when they know they will not be able to afford the payments for longer than a month or two. There is a far better way to negotiate, however, which can result in a more reasonable modification or payment plan. If you 're already in foreclosure the timeline is crucial, the modification will stop the foreclosure and allow the lender to modify the delinquent account, bringing your account current, which is your goal!The timeline for a short sale is undetermined, due to the lender. After finding a perspective buyer for your home, the lender makes the decision on whether the short sale is a gain or a loss to them. IF there is a gain, the lender may entertain the option of a short sale. If you decide to rent the property back fro the repossession service, they will normally give you a rental quote on the spot too, as well as ask you how long you would like to rent the property back for. Statistics show that only 5% of government auctioned tax liens are not paid off in full.? This means that the investor's cash, or equity is safe throughout the entire foreclosure process.
Tax lien Investors
A stock broker must be knowledgeable to ensure that the investor has a good chance of making profits. On the other hand, a tax lien investor can easily create the deal and manage the performance of his investment. The entry costs are also quite low, which means that an investor can start with a small amount of $100.5.? Investments in tax foreclosures and tax liens can be managed across state borders without any hassle or risk. The local government does not worry about where the investor resides, as long as they comply with the regulations surrounding liens.6.
Sometimes the losses are sufficiently large that the short sale approval process may involve the management chain as well as the investor. And finally some Bank Workout Options:These service providers have more options than just short sales. Below are a list of the more common options and their relative meanings:Reinstatement--Catch-up on late payments and bring the loan current--can also be called a 'Cure. What happened is the owner borrowed a certain amount of money to purchase the home and then was unable for any number of reasons to continue the payments and basically were either forced or walked from the home and their loan. We are seeing too much of this in today's market and unfortunately, homeowners think this is an answer to the fact that they may have paid more for the home than the guy next door paid. Threebes. 'There must be evidence that home values have dropped in your area, the loan must be in or near default status, and the seller must show that financial hardship and a lack of assets prevent her from making up the difference,' Threebes says. There are two major consequences to conducting a short sale. First, according to the Mortgage Forgiveness Debt Relief Act of 2007, the IRS allows lenders to issue a 1099 form for the forgiven amount, which you must report as income.
Sometimes the losses are sufficiently large that the short sale approval process may involve the management chain as well as the investor. And finally some Bank Workout Options:These service providers have more options than just short sales. Below are a list of the more common options and their relative meanings:Reinstatement--Catch-up on late payments and bring the loan current--can also be called a 'Cure. What happened is the owner borrowed a certain amount of money to purchase the home and then was unable for any number of reasons to continue the payments and basically were either forced or walked from the home and their loan. We are seeing too much of this in today's market and unfortunately, homeowners think this is an answer to the fact that they may have paid more for the home than the guy next door paid. Threebes. 'There must be evidence that home values have dropped in your area, the loan must be in or near default status, and the seller must show that financial hardship and a lack of assets prevent her from making up the difference,' Threebes says. There are two major consequences to conducting a short sale. First, according to the Mortgage Forgiveness Debt Relief Act of 2007, the IRS allows lenders to issue a 1099 form for the forgiven amount, which you must report as income.
Tuesday, October 2, 2007
Foreclosures May be your Answer
Have you given thought to what high levels of foreclosures in your city this fall could mean to you personally? It’s a dream that many couples starting a family hold dear; raising that family in the traditional single family home with yard. There may be a way that dream can become reality far sooner than you imagined. There is a window of opportunity right now that has opened because others tried to join the ranks of homeowners and failed, some through imprudence, others through sheer bad luck and .bad timing. Here are a number of reasons why you can buy without fear of this happening to you and your family.
Inventories of unsold single family homes are at their highest level in 18 years according to the National Association of Realtors in late September. Home prices have fallen in many cities at the fastest rate in 16 years over this last 12 months, says another source. The level of unsold homes, going into the traditionally slower winter holiday season, together with the significant increase in foreclosure filings through out this year in many states, mean a would be buyer has a power of negotiation to buy really well not known for several years.
As foreclosures due to the double whammy of defaults on sub prime and ARM housing loans and declining prices have escalated, so we now have a credit crunch that means recent housing deals collapsed as previously approved financing fell through.
This is all a generality, based on national and state averages and medians, and as most realtors will tell you, the real estate market can be very local. Educate yourself now on the real estate market conditions in a range of communities that may suit your future plans. Most predictions are that the housing slump nationally is nearing the bottom of the cycle. Learn about housing cycles; learn about the trend of foreclosures in the particular city you are focussed on. You may soon be convinced that, since you plan to buy a “starter” home, just to see the early years of your family through, you will be staying put for at least 5 to 7 years. Long enough to see prices rise again. Then learn about the advantages of foreclosure homes and why now, and before next spring when there will be more buyer competition, could be the best time to buy a foreclosed home.
If you have the savings put aside for a minimum 10% deposit and more (remember that a foreclosure home likely needs some repairs before you move in), and a good to excellent credit record, then find out now what your preapproved loan value will be. Set your own purchase budget wisely and stick to it. Work with a local agent who knows the particular complexities of the foreclosures market. You will be astounded at what you can achieve.
Inventories of unsold single family homes are at their highest level in 18 years according to the National Association of Realtors in late September. Home prices have fallen in many cities at the fastest rate in 16 years over this last 12 months, says another source. The level of unsold homes, going into the traditionally slower winter holiday season, together with the significant increase in foreclosure filings through out this year in many states, mean a would be buyer has a power of negotiation to buy really well not known for several years.
As foreclosures due to the double whammy of defaults on sub prime and ARM housing loans and declining prices have escalated, so we now have a credit crunch that means recent housing deals collapsed as previously approved financing fell through.
This is all a generality, based on national and state averages and medians, and as most realtors will tell you, the real estate market can be very local. Educate yourself now on the real estate market conditions in a range of communities that may suit your future plans. Most predictions are that the housing slump nationally is nearing the bottom of the cycle. Learn about housing cycles; learn about the trend of foreclosures in the particular city you are focussed on. You may soon be convinced that, since you plan to buy a “starter” home, just to see the early years of your family through, you will be staying put for at least 5 to 7 years. Long enough to see prices rise again. Then learn about the advantages of foreclosure homes and why now, and before next spring when there will be more buyer competition, could be the best time to buy a foreclosed home.
If you have the savings put aside for a minimum 10% deposit and more (remember that a foreclosure home likely needs some repairs before you move in), and a good to excellent credit record, then find out now what your preapproved loan value will be. Set your own purchase budget wisely and stick to it. Work with a local agent who knows the particular complexities of the foreclosures market. You will be astounded at what you can achieve.
Friday, July 6, 2007
Understanding Loan Terms
When considering an investment property loan from an institutional lender, you need to consider many of the variables involved in the loan terms being offered.
Interest Rate
The cost of borrowing money, i.e., the interest rate, is one of the most important factors. Interest rates affect monthly payments, which in turn affects how much you can afford to pay for a property. It may also affect cash flow, which affects your decision to hold or sell property.
Loan Amortization
There are many different ways a loan can be structured as far as Simple interest and Amortized. A simple interest loan is calculated by multiplying the loan balance by the interest rate. So, for example, a $100,000 loan at 12% interest would be $1,000.00 per month. The payments here, of course, represent interest-only, so the principal amount of the loan does not change.
An amortized loan is slightly more involved. The actual mathematical formula is complex, so it requires a calculator (try mine, at www.legalwiz.com - click on “calculators” from the left navigation bar). The amortization method breaks down payments over a number of years, with the payment remaining constant each month. However, the interest is calculated on the remaining balance, so the amount of each monthly payment that accounts for principal and interest changes. For the most part, the more payments you make, the more you decrease the amount of principal (the amount of the loan still left to pay) owed.
Balloon Mortgage
A balloon is a premature end to a loan’s life. For example, a loan could call for interest-only payments for three years, then be due in full at the end of three years. Or, a loan could be amortized over 30 years, with the principal balance remaining due in five years. When the loan balloon payment becomes due, the borrower must pay the full amount or face foreclosure.
With interest rates uncertain in the future, many lenders are offering variable-rate financing. Known as an “ARM” loan (adjustable rate mortgage), there are dozens of variations to suit the lender’s profit motives and borrower’s needs. ARM loans have two limits (“caps”) on the rate increase. One cap regulates the limit on interest rate increases over the life of the loan; the other limits the amount the interest rate can be increased at a time. For example, if the initial rate is 6%, it may have a lifetime cap of 11% and a one-time cap of 2%. The adjustments are made monthly, every six months, once a year or every few years, depending upon the “index” the ARM loan is based. An index is an outside source that can be determined by formulas, such as:
“LIBOR” (London Interbank Offered Rate) – based on the interest rate at which international banks lend and borrow funds in the London Interbank market.
“COFI” (Cost of Funds Index) – based on the 11th District’s Federal Home Loan Bank of San Francisco. These loans often adjust on a monthly basis, which can make bookkeeping a real headache!
T-Bills Index – this is based on average rates the Federal government pays on U.S. treasury bills. Also known as the Treasury Constant Maturity or “TCM”, these are the rates banks are paying on six month CDs.
www.loganmooreteam.com
Interest Rate
The cost of borrowing money, i.e., the interest rate, is one of the most important factors. Interest rates affect monthly payments, which in turn affects how much you can afford to pay for a property. It may also affect cash flow, which affects your decision to hold or sell property.
Loan Amortization
There are many different ways a loan can be structured as far as Simple interest and Amortized. A simple interest loan is calculated by multiplying the loan balance by the interest rate. So, for example, a $100,000 loan at 12% interest would be $1,000.00 per month. The payments here, of course, represent interest-only, so the principal amount of the loan does not change.
An amortized loan is slightly more involved. The actual mathematical formula is complex, so it requires a calculator (try mine, at www.legalwiz.com - click on “calculators” from the left navigation bar). The amortization method breaks down payments over a number of years, with the payment remaining constant each month. However, the interest is calculated on the remaining balance, so the amount of each monthly payment that accounts for principal and interest changes. For the most part, the more payments you make, the more you decrease the amount of principal (the amount of the loan still left to pay) owed.
Balloon Mortgage
A balloon is a premature end to a loan’s life. For example, a loan could call for interest-only payments for three years, then be due in full at the end of three years. Or, a loan could be amortized over 30 years, with the principal balance remaining due in five years. When the loan balloon payment becomes due, the borrower must pay the full amount or face foreclosure.
With interest rates uncertain in the future, many lenders are offering variable-rate financing. Known as an “ARM” loan (adjustable rate mortgage), there are dozens of variations to suit the lender’s profit motives and borrower’s needs. ARM loans have two limits (“caps”) on the rate increase. One cap regulates the limit on interest rate increases over the life of the loan; the other limits the amount the interest rate can be increased at a time. For example, if the initial rate is 6%, it may have a lifetime cap of 11% and a one-time cap of 2%. The adjustments are made monthly, every six months, once a year or every few years, depending upon the “index” the ARM loan is based. An index is an outside source that can be determined by formulas, such as:
“LIBOR” (London Interbank Offered Rate) – based on the interest rate at which international banks lend and borrow funds in the London Interbank market.
“COFI” (Cost of Funds Index) – based on the 11th District’s Federal Home Loan Bank of San Francisco. These loans often adjust on a monthly basis, which can make bookkeeping a real headache!
T-Bills Index – this is based on average rates the Federal government pays on U.S. treasury bills. Also known as the Treasury Constant Maturity or “TCM”, these are the rates banks are paying on six month CDs.
www.loganmooreteam.com
Tuesday, July 3, 2007
Real Estate Market Stages
The stages of a real estate market are most often recognized only after the fact. Even when all the historical data confirms that a downturn is in progress, most speculators won't stop gambling. Real estate speculators call themselves investors because they believe they are taking calculated and controllable risks when purchasing homes.
In the mid to late 1990's real estate investing was virgin territory because it was easy to use formulas of 60% to 70% of Fair Market Value minus repair costs to determine an offering price for a seller. The "chant" was "Get as many properties under contract because they can only go higher!" In the earlier years, buying properties cheaply enough allowed them to be rented and they supported themselves while the investor simply collected checks. In only three years, a groundswell of speculation led to frenzied buying. Families looking for a home to live in got caught up in the buying panic because of the scarcity of homes for sale. The market quickly and efficiently climbed with the help of lending institutions who were offering low interest rates, 100% financing, with no proof of the buyer's income. Almost no other speculative opportunity in history caught on as fast because of real estate investors needing little or no money down and ease of loan qualification for "retail buyers".
Even when many of the potential borrowers had credit issues and minimal down payments, the lenders created more lenient loan requirements. The number of single family homes that were owned by investors rose from 2.5% in 1995 to almost 29% by the end of 2006. Effectively, these investors took away at least 26.5% of available single family homes with the intent of selling them at higher prices to retail home buyers.
Here is a summary of the stages of a real estate cycle:
Stage #1 – This is where supply closely equals demand and home prices fluctuate between +/- 3% per year and prices are basically stable over a five year period.
Stage #2 – Here demand out-strips supply, or a "sellers' market" develops because of fewer homes on the market. This can be created by investor speculation.
Stage #3 - Here demand far out-strips supply with resulting large annual price increases. Homes now offer new speculators more attractive yields than stocks and money market instruments. More so called "investors" begin buying multiple properties with expectations of selling for huge profits because of the low down payments required for mortgages or using creative financing. The market begins to feed on itself as homeowners begin to rush to take profits.
Stage #4 – As home prices become unaffordable, interest rates increase making financing costs too expensive for homeowners to purchase, and investors have inventory that can't be sold. Seemingly everyone tries to sell and the market readjusts to former market conditions by pulling back as much as 30% to 60% of peak values as the market begins to stabilize for 3 – 8 years.
Summary - Based on the current market conditions and continuing available data, the real estate market is well into Stage #4. There is no way to determine how long this swing will last but historically they have lasted for 6 to 15 years. This stage offers huge opportunities for real estate investors and homeowners alike that want to purchase homes either for living in for 5 years+ for homeowners, or for "flipping" for investors. Both homeowners and investors looking to buy a property need to be very selective about how much they pay for a property, the amount of costs to rehab it, how they will be financing it, how long they intend to stay in it, the carrying costs, other properties currently listed on the MLS®, and neighborhood conditions. Unfortunately, retail buyers who wait to get the lowest possible price often wind up paying higher mortgage rates which offsets the cost savings by waiting, especially when you include their cost to rent, and the interest tax-deduction that they lose by not owning. Investors will have to buy low and sell low, while the retail buyer has become "king of the mountain" in picking the best possible home for the lowest price.
http://www.loganmooreteam.com/
In the mid to late 1990's real estate investing was virgin territory because it was easy to use formulas of 60% to 70% of Fair Market Value minus repair costs to determine an offering price for a seller. The "chant" was "Get as many properties under contract because they can only go higher!" In the earlier years, buying properties cheaply enough allowed them to be rented and they supported themselves while the investor simply collected checks. In only three years, a groundswell of speculation led to frenzied buying. Families looking for a home to live in got caught up in the buying panic because of the scarcity of homes for sale. The market quickly and efficiently climbed with the help of lending institutions who were offering low interest rates, 100% financing, with no proof of the buyer's income. Almost no other speculative opportunity in history caught on as fast because of real estate investors needing little or no money down and ease of loan qualification for "retail buyers".
Even when many of the potential borrowers had credit issues and minimal down payments, the lenders created more lenient loan requirements. The number of single family homes that were owned by investors rose from 2.5% in 1995 to almost 29% by the end of 2006. Effectively, these investors took away at least 26.5% of available single family homes with the intent of selling them at higher prices to retail home buyers.
Here is a summary of the stages of a real estate cycle:
Stage #1 – This is where supply closely equals demand and home prices fluctuate between +/- 3% per year and prices are basically stable over a five year period.
Stage #2 – Here demand out-strips supply, or a "sellers' market" develops because of fewer homes on the market. This can be created by investor speculation.
Stage #3 - Here demand far out-strips supply with resulting large annual price increases. Homes now offer new speculators more attractive yields than stocks and money market instruments. More so called "investors" begin buying multiple properties with expectations of selling for huge profits because of the low down payments required for mortgages or using creative financing. The market begins to feed on itself as homeowners begin to rush to take profits.
Stage #4 – As home prices become unaffordable, interest rates increase making financing costs too expensive for homeowners to purchase, and investors have inventory that can't be sold. Seemingly everyone tries to sell and the market readjusts to former market conditions by pulling back as much as 30% to 60% of peak values as the market begins to stabilize for 3 – 8 years.
Summary - Based on the current market conditions and continuing available data, the real estate market is well into Stage #4. There is no way to determine how long this swing will last but historically they have lasted for 6 to 15 years. This stage offers huge opportunities for real estate investors and homeowners alike that want to purchase homes either for living in for 5 years+ for homeowners, or for "flipping" for investors. Both homeowners and investors looking to buy a property need to be very selective about how much they pay for a property, the amount of costs to rehab it, how they will be financing it, how long they intend to stay in it, the carrying costs, other properties currently listed on the MLS®, and neighborhood conditions. Unfortunately, retail buyers who wait to get the lowest possible price often wind up paying higher mortgage rates which offsets the cost savings by waiting, especially when you include their cost to rent, and the interest tax-deduction that they lose by not owning. Investors will have to buy low and sell low, while the retail buyer has become "king of the mountain" in picking the best possible home for the lowest price.
http://www.loganmooreteam.com/
Thursday, June 28, 2007
Buying a Home With Resale Value
Location – Local Community, Town or City
Before you can actually pick out a house, you need to choose what cities or communities you would like to live in. There are many factors you should pay attention to, not only for yourself, but because you intend to eventually sell the home to someone else. Carefully choosing your community is the first step in "location, location, location" and can help maximize your future potential resale value.
Economic Stability
When choosing a community for your purchase, it makes the most sense to buy in a city with a viable and stable economy. Five, ten, or even fifteen years from now – when you want to sell your home – you can have a reasonable expectation that your community will still be a desirable place to live.
In addition to residential neighborhoods, there should be a healthy mixture of commercial and business districts. These not only provide jobs to the local residents, but also add an income source that the city can use to upgrade and maintain roads and city services.
In fact, you should take a drive and see how well the community is maintained. You have probably heard of "pride of ownership" when referring to an individual home or an automobile. Look to live in a city that demonstrates community pride, as well.
Local Government Services
In addition to community pride, check on the services provided by local government. One
example would be the local library system. Are there several library branches? Do they stock a good selection of books, including recent best sellers?
You should also look into local crime statistics and see how the city compares to the national average and other local communities. Is the police force effective and responsive to community needs? Are fire stations located strategically around the community so that they also can respond quickly in an emergency?
Another area of inquiry is community services. Does the city sponsor youth sports and have well maintained athletic facilities and parks? Do they sponsor community events, such as an annual parade? Are there activities available for children, teenagers and senior citizens?
Your local agent, if they are a good one, will have amassed a wealth of information on these subjects of inquiry. It is also another reason to always use a local agent.
Schools
Even if you do not have school-age children and do not intend to have children, you must pay attention to the local school system. That is because when you sell the property, many of your potential buyers will have concerns of this nature.
You will want to know if the local schools are overcrowded. Take a drive around and see if there are auxiliary trailers outside the local schools. Call up the local school district and see if elementary aged children always attend the school closest to their home. If not, ask why. Are there enough schools to support the local population? If not, are there plans to build new schools? How will building new schools affect local property taxes?
You should also check to see how local students score on the standardized tests. You can ask your agent about these things, but you should also get the local phone numbers so you can ask yourself.
There are also school reports available for free on the Internet.
Property Taxes
Property taxes may be higher in one town than another nearby city. This can sometimes affect whether potential homebuyers view a community as a desirable place to live. Often, they will choose not to purchase in a community with higher taxes, though this decision is not always justified. Higher property taxes often mean newer and more modern schools, well-maintained roads, and bountiful community services.
In addition, you will often find that the "cost per square foot" of homes is lower in cities that have higher property taxes. This means you can buy a bigger house for less money. Since the mortgage payment may be lower, but the property taxes a bit higher, the monthly housing costs may be approximately the same in each city.
However, many agents and prospective buyers have a bias against a community with higher property taxes. If resale value is important to you, make property taxes a consideration when choosing the location of your new home.
www.loganmooreteam.com
Before you can actually pick out a house, you need to choose what cities or communities you would like to live in. There are many factors you should pay attention to, not only for yourself, but because you intend to eventually sell the home to someone else. Carefully choosing your community is the first step in "location, location, location" and can help maximize your future potential resale value.
Economic Stability
When choosing a community for your purchase, it makes the most sense to buy in a city with a viable and stable economy. Five, ten, or even fifteen years from now – when you want to sell your home – you can have a reasonable expectation that your community will still be a desirable place to live.
In addition to residential neighborhoods, there should be a healthy mixture of commercial and business districts. These not only provide jobs to the local residents, but also add an income source that the city can use to upgrade and maintain roads and city services.
In fact, you should take a drive and see how well the community is maintained. You have probably heard of "pride of ownership" when referring to an individual home or an automobile. Look to live in a city that demonstrates community pride, as well.
Local Government Services
In addition to community pride, check on the services provided by local government. One
example would be the local library system. Are there several library branches? Do they stock a good selection of books, including recent best sellers?
You should also look into local crime statistics and see how the city compares to the national average and other local communities. Is the police force effective and responsive to community needs? Are fire stations located strategically around the community so that they also can respond quickly in an emergency?
Another area of inquiry is community services. Does the city sponsor youth sports and have well maintained athletic facilities and parks? Do they sponsor community events, such as an annual parade? Are there activities available for children, teenagers and senior citizens?
Your local agent, if they are a good one, will have amassed a wealth of information on these subjects of inquiry. It is also another reason to always use a local agent.
Schools
Even if you do not have school-age children and do not intend to have children, you must pay attention to the local school system. That is because when you sell the property, many of your potential buyers will have concerns of this nature.
You will want to know if the local schools are overcrowded. Take a drive around and see if there are auxiliary trailers outside the local schools. Call up the local school district and see if elementary aged children always attend the school closest to their home. If not, ask why. Are there enough schools to support the local population? If not, are there plans to build new schools? How will building new schools affect local property taxes?
You should also check to see how local students score on the standardized tests. You can ask your agent about these things, but you should also get the local phone numbers so you can ask yourself.
There are also school reports available for free on the Internet.
Property Taxes
Property taxes may be higher in one town than another nearby city. This can sometimes affect whether potential homebuyers view a community as a desirable place to live. Often, they will choose not to purchase in a community with higher taxes, though this decision is not always justified. Higher property taxes often mean newer and more modern schools, well-maintained roads, and bountiful community services.
In addition, you will often find that the "cost per square foot" of homes is lower in cities that have higher property taxes. This means you can buy a bigger house for less money. Since the mortgage payment may be lower, but the property taxes a bit higher, the monthly housing costs may be approximately the same in each city.
However, many agents and prospective buyers have a bias against a community with higher property taxes. If resale value is important to you, make property taxes a consideration when choosing the location of your new home.
www.loganmooreteam.com
Wednesday, June 27, 2007
5 Reasons To Use A Buyer’s Agent
Real estate transactions come with risks, competition, and expenses. With your financial and family future on the line, there are five reasons to use a buyer’s agent in order to give you a fighting chance.
The buyer’s agent is a realtor that has gone through special training with the National Board of Realtors. The training authorizes the realtor to use the specialized sub-title in addition to the realtor title they already carry. The realtor is a real estate specialist. Therefore when you attain the help of a buyer’s agent, you are also getting the experience and training of a realtor.
A buyer’s agent does many things that decrease the risk of purchasing a home for their clients. They also increase the overall satisfaction of the sale, because they look for specific qualifications and amenities. Here are some of the steps a buyer’s agent will take to give you the highest level of happiness with your new home.
1. The buyer’s agent will make sure that there are the correct inspections, appraisals, and market analysis complete to ensure that your purchase is made with a full understanding of what to expect after the completion of the purchase. The buyer’s agent or realtor will make good recommendations to let you know whether the home is safe for your family.
2. A realtor, or buyer’s agent knows the market. They will also know if the price the sellers are asking for is the price you should be paying. They will also know how to negotiate a better price for your benefit. Therefore, you will be making your purchase for the best deal possible.
3. A realtor, or buyer’s agent will know what the newest listings are. They pay for listing information that keeps them up to date on the newest and the best. This is why the realtor or buyer’s agent will be able to help you find a home easier and give you a much broader set options to look at. Realtors also work close with each other to help meet the needs of their clients. Since the majority of homes for sale are exclusively listed with a realtor or real estate agent, some times the only way you will get this information is through a realtor. Also a realtor will use all their tools to gain the best list of homes for you. This would be the use of the MLS or nationwide multiple listing service, their company listing service, and many other options.
4. A realtor will likely know a home is for sale, before it ever hits the Internet. An MLS listing of a home can take between one and ten days to show up. By that time the home could already be sold. Word of mouth just like in any other business works for you. You need to find the right home, so your realtor will tell other realtors about you, and then that realtor will look at what he has. It is just like having a personal liaison in your corner doing all the work for you.
5. Realtors or buyer’s agents understand the contracts, legal documents and the complexity of the overall closing process. Your realtor will know how to complete the consumer-mandated seller’s disclosure, the environmental and structural reports, among all the many other legal reports. Your agent will also interpret the information in the transaction that may be more difficult to understand.
There are many reasons to use a buyer’s agent. The biggest thing to remember is that in most cases the buyer’s agent is paid from the commission from the sale of the house. Therefore, you really would not be paying anything extra. So having the security of having someone on your side is more logical than any other move you will make when purchasing a home.
www.loganmooreteam.com
The buyer’s agent is a realtor that has gone through special training with the National Board of Realtors. The training authorizes the realtor to use the specialized sub-title in addition to the realtor title they already carry. The realtor is a real estate specialist. Therefore when you attain the help of a buyer’s agent, you are also getting the experience and training of a realtor.
A buyer’s agent does many things that decrease the risk of purchasing a home for their clients. They also increase the overall satisfaction of the sale, because they look for specific qualifications and amenities. Here are some of the steps a buyer’s agent will take to give you the highest level of happiness with your new home.
1. The buyer’s agent will make sure that there are the correct inspections, appraisals, and market analysis complete to ensure that your purchase is made with a full understanding of what to expect after the completion of the purchase. The buyer’s agent or realtor will make good recommendations to let you know whether the home is safe for your family.
2. A realtor, or buyer’s agent knows the market. They will also know if the price the sellers are asking for is the price you should be paying. They will also know how to negotiate a better price for your benefit. Therefore, you will be making your purchase for the best deal possible.
3. A realtor, or buyer’s agent will know what the newest listings are. They pay for listing information that keeps them up to date on the newest and the best. This is why the realtor or buyer’s agent will be able to help you find a home easier and give you a much broader set options to look at. Realtors also work close with each other to help meet the needs of their clients. Since the majority of homes for sale are exclusively listed with a realtor or real estate agent, some times the only way you will get this information is through a realtor. Also a realtor will use all their tools to gain the best list of homes for you. This would be the use of the MLS or nationwide multiple listing service, their company listing service, and many other options.
4. A realtor will likely know a home is for sale, before it ever hits the Internet. An MLS listing of a home can take between one and ten days to show up. By that time the home could already be sold. Word of mouth just like in any other business works for you. You need to find the right home, so your realtor will tell other realtors about you, and then that realtor will look at what he has. It is just like having a personal liaison in your corner doing all the work for you.
5. Realtors or buyer’s agents understand the contracts, legal documents and the complexity of the overall closing process. Your realtor will know how to complete the consumer-mandated seller’s disclosure, the environmental and structural reports, among all the many other legal reports. Your agent will also interpret the information in the transaction that may be more difficult to understand.
There are many reasons to use a buyer’s agent. The biggest thing to remember is that in most cases the buyer’s agent is paid from the commission from the sale of the house. Therefore, you really would not be paying anything extra. So having the security of having someone on your side is more logical than any other move you will make when purchasing a home.
www.loganmooreteam.com
Tuesday, June 26, 2007
After Bankruptcy, Rebuild Your Credit Before Buying Real Estate
You have gone through bankruptcy and you do not owe anyone. Now is the perfect time to purchase that home you have always wanted — right? Wrong! Yes, you can probably locate a real estate mortgage lender, since you cannot declare chapter 7 bankruptcy again for at least 6 years. The problem is that you will pay the highest finance charges for the privilege of obtaining that real estate mortgage, charges that will extend over the life of the real estate loan.
Before even looking at real estate, get your credit straightened up first. The bankruptcy will appear on all three of your credit reports from seven-to-ten years, which will make you a higher risk to real estate lenders. You cannot do anything about this; however, you can show real estate lenders that you are handling credit much better now by rebuilding it. This can lower your risk factor, when obtaining a real estate mortgage. Using the following improvement steps, you actually can rebuild your credit in a relatively short time.
First, get copies of your credit report from the credit agencies, and clean them up. You have the right to one free report from all three agencies annually, which can be obtained through www.annualcreditreport.com.
Ensure that creditors, who were listed in your bankruptcy, have cleared their information from your credit reports. Otherwise, it will appear as if you still owe them money and are not paying.
Ensure any creditors not listed in your bankruptcy and you are paying regularly have been reporting your good credit record to all three agencies. Contact any not reporting this and ask them to do so. This will increase your chances of getting a loan for your real estate.
If there was a specific event or cause for your bankruptcy, you can add up to a 100-word explanation to your credit report at each agency. The real estate lender will get this explanation as part of your credit report.
It will look especially good to real estate lenders if you have received credit counseling, and the counseling will help you in several ways. A good credit counseling agency will help you create a budget and counsel you in how to use and stick to it. They offer counseling on using credit in your future, as well as how to re-establish your credit. They can help you move toward your goal of buying real estate. Once you have successfully completed credit counseling, ask them for something in writing to that effect. It can help when applying for your real estate loan
The problem is finding a reputable agency. Some are downright questionable. Here are a few ideas to assist you in locating a reputable agency:
• They should be a member of either the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. Both are national trade associations.
• Agencies approved by the U.S. Trustee’s office (part of the Department of Justice) are good agencies. You can see those for your area at: http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm.
• Interview the agencies, asking what they offer and the cost for each service. Good agencies should meet with you for 60-to-90 minutes, reviewing your financial situation and offering budgeting advice — before doing any credit repair.
• Ask for costs in writing from the agency you choose. They should charge around $50 or less, with budget counseling sessions for less than $20 each.
• Steer clear of those who push their debt management program, where they want you to pay all your remaining creditors through them.
• Check http://www.ftc.gov/bcp/conline/pubs/credit/fiscal.htm for more ideas from the Federal Trade Commission. Use the credit counseling agencies to help you rebuild your credit the right way. It can take less than a year to achieve; yet, it will make a big difference when you obtain that real estate mortgage.
www.loganmooreteam.com
Before even looking at real estate, get your credit straightened up first. The bankruptcy will appear on all three of your credit reports from seven-to-ten years, which will make you a higher risk to real estate lenders. You cannot do anything about this; however, you can show real estate lenders that you are handling credit much better now by rebuilding it. This can lower your risk factor, when obtaining a real estate mortgage. Using the following improvement steps, you actually can rebuild your credit in a relatively short time.
First, get copies of your credit report from the credit agencies, and clean them up. You have the right to one free report from all three agencies annually, which can be obtained through www.annualcreditreport.com.
Ensure that creditors, who were listed in your bankruptcy, have cleared their information from your credit reports. Otherwise, it will appear as if you still owe them money and are not paying.
Ensure any creditors not listed in your bankruptcy and you are paying regularly have been reporting your good credit record to all three agencies. Contact any not reporting this and ask them to do so. This will increase your chances of getting a loan for your real estate.
If there was a specific event or cause for your bankruptcy, you can add up to a 100-word explanation to your credit report at each agency. The real estate lender will get this explanation as part of your credit report.
It will look especially good to real estate lenders if you have received credit counseling, and the counseling will help you in several ways. A good credit counseling agency will help you create a budget and counsel you in how to use and stick to it. They offer counseling on using credit in your future, as well as how to re-establish your credit. They can help you move toward your goal of buying real estate. Once you have successfully completed credit counseling, ask them for something in writing to that effect. It can help when applying for your real estate loan
The problem is finding a reputable agency. Some are downright questionable. Here are a few ideas to assist you in locating a reputable agency:
• They should be a member of either the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. Both are national trade associations.
• Agencies approved by the U.S. Trustee’s office (part of the Department of Justice) are good agencies. You can see those for your area at: http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm.
• Interview the agencies, asking what they offer and the cost for each service. Good agencies should meet with you for 60-to-90 minutes, reviewing your financial situation and offering budgeting advice — before doing any credit repair.
• Ask for costs in writing from the agency you choose. They should charge around $50 or less, with budget counseling sessions for less than $20 each.
• Steer clear of those who push their debt management program, where they want you to pay all your remaining creditors through them.
• Check http://www.ftc.gov/bcp/conline/pubs/credit/fiscal.htm for more ideas from the Federal Trade Commission. Use the credit counseling agencies to help you rebuild your credit the right way. It can take less than a year to achieve; yet, it will make a big difference when you obtain that real estate mortgage.
www.loganmooreteam.com
Monday, June 25, 2007
Why Do You Need a Real Estate Appraisal?
Anytime you buy or sell real estate, you need a real estate appraisal. The primary purpose is to find out exactly how much your property is worth. Banks and similar lending companies also require it, before a buyer can obtain a mortgage.
A real estate appraisal develops an “educated and trained opinion” on the value of the property. It also, in some circumstances, may ascertain the best use of the property, garnering the best selling price. For example, a long-time residential property may be in an area that has been rezoned for limited commerce, which could potentially bring in a higher sales price than marketing the real estate to potential residential buyers.
An appraiser differs from an inspector, who is looking for things that need to be corrected, repaired or replaced — things that are required by law to be completed before the property can be sold or to enhance your sale price. Though an appraiser will look at these same things, he/she is only interested in developing the value of the property.
A real estate appraisal is based on the highest and best use of real property — what use of the property will produce the highest possible value? The final appraisal must be both profitable and probable. The real estate appraisal includes a definition of the type of value that is being developed — whether it is a market value (what most sellers need), a condemnation value, quick sale value, and so on.
The Process
The appraiser looks at each property individually, beginning with an objective inspection of the interior and exterior of the home or building, as well as driving through the surrounding neighborhood. The appraiser looks for the assets, as well as the detriments, of the property. For homes, gross living space, quality of construction, location, layout, the number of bedrooms and bathrooms, the lot size, condition of the home and land, central air conditioning, landscaping, number of fireplaces or the lack thereof, decks, pool, fencing, recent renovations, amenities provided by the surrounding neighborhood, and crime statistics of the area are all considered by the real estate appraiser.
Living space is calculated by measuring the outside of the home. It does not include such areas as the garage, porches, sheds, and so on. Basements are generally calculated separately from the living space. The contributory value of basements is determined by the local market, government regulation, if it is finished or not (and the quality of the finish), and so on.
The real estate appraiser usually only considers permanent buildings within his/her appraisal. Fixtures that can be relocated, such as above ground pools and sheds, are not included in the appraisal. If you are the real estate seller, you should point out any features, amenities or improvements of your home that are not readily discernable.
Next, the real estate appraiser analyzes the available market data for your area and the surrounding neighborhood, including current and historical comparable sales, current offers for comparable homes, pending sales, and proposed improvements. The appraiser gathers data from a variety of sources, as well as his/her own personal knowledge of the local market. The appraiser then compares your real estate to the broader market.
Each real estate appraiser has his/her own process of analyzing, collecting and reconciling the needed appraisal data. If you get five different appraisals for your real estate, you may receive five different appraisal opinions. They should, however, all be within a similar value range, if they are completed within the same timeframe and under the same conditions. Though the real estate appraisal is not for public consumption, it may be shared with all parties concerned. For instance, a buyer has offered $150,000 for a home, but the buyer-side, commissioned appraisal value is only $146,000. Sharing this appraisal with the seller means that the owner can do needed improvements to bring the price up or offer the real estate to the buyer for the appraisal amount.
For the highest appraisal possible, real estate sellers should have an inspection and appraisal done before putting the property on the market. First, the inspection in order to make any needed repairs or renovations. Then, get the appraisal to ensure you are getting the most for your real estate.
http://www.loganmooreteam.com/
A real estate appraisal develops an “educated and trained opinion” on the value of the property. It also, in some circumstances, may ascertain the best use of the property, garnering the best selling price. For example, a long-time residential property may be in an area that has been rezoned for limited commerce, which could potentially bring in a higher sales price than marketing the real estate to potential residential buyers.
An appraiser differs from an inspector, who is looking for things that need to be corrected, repaired or replaced — things that are required by law to be completed before the property can be sold or to enhance your sale price. Though an appraiser will look at these same things, he/she is only interested in developing the value of the property.
A real estate appraisal is based on the highest and best use of real property — what use of the property will produce the highest possible value? The final appraisal must be both profitable and probable. The real estate appraisal includes a definition of the type of value that is being developed — whether it is a market value (what most sellers need), a condemnation value, quick sale value, and so on.
The Process
The appraiser looks at each property individually, beginning with an objective inspection of the interior and exterior of the home or building, as well as driving through the surrounding neighborhood. The appraiser looks for the assets, as well as the detriments, of the property. For homes, gross living space, quality of construction, location, layout, the number of bedrooms and bathrooms, the lot size, condition of the home and land, central air conditioning, landscaping, number of fireplaces or the lack thereof, decks, pool, fencing, recent renovations, amenities provided by the surrounding neighborhood, and crime statistics of the area are all considered by the real estate appraiser.
Living space is calculated by measuring the outside of the home. It does not include such areas as the garage, porches, sheds, and so on. Basements are generally calculated separately from the living space. The contributory value of basements is determined by the local market, government regulation, if it is finished or not (and the quality of the finish), and so on.
The real estate appraiser usually only considers permanent buildings within his/her appraisal. Fixtures that can be relocated, such as above ground pools and sheds, are not included in the appraisal. If you are the real estate seller, you should point out any features, amenities or improvements of your home that are not readily discernable.
Next, the real estate appraiser analyzes the available market data for your area and the surrounding neighborhood, including current and historical comparable sales, current offers for comparable homes, pending sales, and proposed improvements. The appraiser gathers data from a variety of sources, as well as his/her own personal knowledge of the local market. The appraiser then compares your real estate to the broader market.
Each real estate appraiser has his/her own process of analyzing, collecting and reconciling the needed appraisal data. If you get five different appraisals for your real estate, you may receive five different appraisal opinions. They should, however, all be within a similar value range, if they are completed within the same timeframe and under the same conditions. Though the real estate appraisal is not for public consumption, it may be shared with all parties concerned. For instance, a buyer has offered $150,000 for a home, but the buyer-side, commissioned appraisal value is only $146,000. Sharing this appraisal with the seller means that the owner can do needed improvements to bring the price up or offer the real estate to the buyer for the appraisal amount.
For the highest appraisal possible, real estate sellers should have an inspection and appraisal done before putting the property on the market. First, the inspection in order to make any needed repairs or renovations. Then, get the appraisal to ensure you are getting the most for your real estate.
http://www.loganmooreteam.com/
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