Feb
14
Why Work With a Realtor?
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Joe Samson asked:
Many people, in an effort to avoid paying commissions to a Realtor, go the for sale by owner route. While this may seem like an exciting challenge to homeowners, the reality can be a little bit darker. True, real estate is an exciting market to be in, but it is also one fraught with legal complications. Buying and selling can be quite stressful, especially if you don’t know exactly what you are doing.
First of all, a Realtor is trained in all legal matters involved in the sale of real estate. Sometimes, these sales go smoothly, but sometimes, clauses, liens, and contingency contracts can make them very complicated. I recently heard about a couple who sold their own home. They entered into a contract with a couple who ended up having serious trouble getting financing. They ended up missing the opportunity for a quick sale while they waited in vain for the couple who made the original offer to get a mortgage loan. Once the potential buyers finally admitted defeat the couple were exhausted, and still had to deal with selling their home. It is hard to know when life is going to through you curve-balls. The best thing to do is be prepared, and a Realtor comes not only trained in theoretical real estate cases, but, ideally, with a whole history of experiences from which to draw from. This makes them extremely helpful when negotiating the legal aspects of buying or selling.
Even if your home sale goes off without a hitch, all the paperwork involved can be overwhelming. What are you signing? Sometimes it’s hard to tell when the language is full of legal and industry terms that the average person just isn’t familiar with. A Realtor can translate these forms, helping you understand what each step in the transaction is all about.
A Realtor is connected to a whole network of other Realtors. This means that weather you are buying or selling, a Realtor can help. They have a network of other professionals to market your home to. They have clients waiting to buy homes, and colleagues with more clients, waiting to buy more homes. Some homes barely need to be marketed because there are buyers already waiting to purchase just that type of home.
When it does come time to market, a savvy Realtor has numerous tools at their disposal that the average citizen does not. Sure, there are a lot of web sites out there where real estate can be advertised, however only a Realtor can post a home on the Multiple Listing Service. Once a home is posted there, buyers from all over the world can see it, as can even more of those Realtors with clients waiting to buy.
Many people think that they can only find what they need themselves, but a good Realtor will be able to listen to your needs. A good Realtor knows the market, and knows the area, and may be able to suggest places you didn’t even know existed. They are also familiar with local services, and can recommend lawyers, notaries, inspectors or even contractors that they personally know do good work.
Overall, an experienced Realtor may cost a little bit in commission, but the service they provide is worth while. If someone can help you not lose money, or save you a lot of time, aren’t they worth what you paid them?
WILEY
Many people, in an effort to avoid paying commissions to a Realtor, go the for sale by owner route. While this may seem like an exciting challenge to homeowners, the reality can be a little bit darker. True, real estate is an exciting market to be in, but it is also one fraught with legal complications. Buying and selling can be quite stressful, especially if you don’t know exactly what you are doing.
First of all, a Realtor is trained in all legal matters involved in the sale of real estate. Sometimes, these sales go smoothly, but sometimes, clauses, liens, and contingency contracts can make them very complicated. I recently heard about a couple who sold their own home. They entered into a contract with a couple who ended up having serious trouble getting financing. They ended up missing the opportunity for a quick sale while they waited in vain for the couple who made the original offer to get a mortgage loan. Once the potential buyers finally admitted defeat the couple were exhausted, and still had to deal with selling their home. It is hard to know when life is going to through you curve-balls. The best thing to do is be prepared, and a Realtor comes not only trained in theoretical real estate cases, but, ideally, with a whole history of experiences from which to draw from. This makes them extremely helpful when negotiating the legal aspects of buying or selling.
Even if your home sale goes off without a hitch, all the paperwork involved can be overwhelming. What are you signing? Sometimes it’s hard to tell when the language is full of legal and industry terms that the average person just isn’t familiar with. A Realtor can translate these forms, helping you understand what each step in the transaction is all about.
A Realtor is connected to a whole network of other Realtors. This means that weather you are buying or selling, a Realtor can help. They have a network of other professionals to market your home to. They have clients waiting to buy homes, and colleagues with more clients, waiting to buy more homes. Some homes barely need to be marketed because there are buyers already waiting to purchase just that type of home.
When it does come time to market, a savvy Realtor has numerous tools at their disposal that the average citizen does not. Sure, there are a lot of web sites out there where real estate can be advertised, however only a Realtor can post a home on the Multiple Listing Service. Once a home is posted there, buyers from all over the world can see it, as can even more of those Realtors with clients waiting to buy.
Many people think that they can only find what they need themselves, but a good Realtor will be able to listen to your needs. A good Realtor knows the market, and knows the area, and may be able to suggest places you didn’t even know existed. They are also familiar with local services, and can recommend lawyers, notaries, inspectors or even contractors that they personally know do good work.
Overall, an experienced Realtor may cost a little bit in commission, but the service they provide is worth while. If someone can help you not lose money, or save you a lot of time, aren’t they worth what you paid them?
WILEY
Nov
7
For Deals, Foreclosure!
Filed Under Real Estate | Leave a Comment
Kevin Bilberry asked:
The media is full of foreclosure news, and with good reason – foreclosures are up almost 35 per cent this year, with twice as many properties in some areas. With this expanded inventory buyers have more properties to choose from.
When a homeowner defaults on their loan, the house will go into foreclosure. Many investors see this as a chance to get a great deal on a property, but don’t let your dreams run away with you – the most attractive houses often sell for a price close to their market value. There are deals to be had (you may be able to shave at least 10 to 20 percent off the market value), but you have to follow certain steps in order to secure them. A foreclosure financing specialist can help you through the process.
As an investor or a potential homeowner you can buy a home in any of the three stages of foreclosure, though they all carry different risks and savings potential. The best buys may be found at preforeclosure, after the property has been listed in public record but before it goes to auction. This is a private deal done with the homeowner, who is obviously in a stressful situation, and in some cases isn’t even aware that the property has been publicly listed. If you are willing to approach the buyer you may be able to get the home for less than market value (but more than the amount owed on the bank loan). This isn’t an easy process and is often more than the average home buyer is comfortable with.
The next stage is the auction, which is probably the riskiest stage and has a major financing obstacle: auctions require you pay your deposit in cash or by cashier’s check, and often the balance is due within days, even hours, of the purchase. Add this to the idea of buying a property with no inspection, often sight unseen, without being eligible for title insurance. You could be on the line for unpaid bills, liens, and pricey repairs. Furthermore, if the defaulting owners refuse to move out you’ll may have to oversee their eviction. Still there are bargains to be found here. If you can come up with the cash, be sure to do your homework prior to the sale – research the house in advance and know your state laws to minimize surprises.
When an auction is unsuccessful, the property reverts back to the financial institution that holds the mortgage. This is the final stage of foreclosure: the property is now REO, real estate owned. Buying at this stage means you can have an inspection done and qualify for title insurance. The bank has most likely dealt with any evictions and tax liens, and may have even done some repairs. This is a much safer deal, buy you might not get the savings you were hoping for. Small banks may offer better opportunities here – these houses are non-performing assets on the bank’s books. Remember, the bank has to pay for the upkeep of the property (or let it go and risk losing more money). So while they not be moved to action while holding just a couple of properties, as inventory piles up they should be more open to selling rather than holding.
Remember, you don’t want to become an example of history repeating itself: make sure you can afford your payments. Resist the urge to buy more than you can comfortably afford. Making a back up plan (and a rainy day fund) for unforeseen circumstances (such as an illness, injury, etc) will allow you some breathing room in a crunch. If you do find yourself in financial trouble, talk to a HUD approved housing counselor for free advice before you’re in too deep.
BRAIN
The media is full of foreclosure news, and with good reason – foreclosures are up almost 35 per cent this year, with twice as many properties in some areas. With this expanded inventory buyers have more properties to choose from.
When a homeowner defaults on their loan, the house will go into foreclosure. Many investors see this as a chance to get a great deal on a property, but don’t let your dreams run away with you – the most attractive houses often sell for a price close to their market value. There are deals to be had (you may be able to shave at least 10 to 20 percent off the market value), but you have to follow certain steps in order to secure them. A foreclosure financing specialist can help you through the process.
As an investor or a potential homeowner you can buy a home in any of the three stages of foreclosure, though they all carry different risks and savings potential. The best buys may be found at preforeclosure, after the property has been listed in public record but before it goes to auction. This is a private deal done with the homeowner, who is obviously in a stressful situation, and in some cases isn’t even aware that the property has been publicly listed. If you are willing to approach the buyer you may be able to get the home for less than market value (but more than the amount owed on the bank loan). This isn’t an easy process and is often more than the average home buyer is comfortable with.
The next stage is the auction, which is probably the riskiest stage and has a major financing obstacle: auctions require you pay your deposit in cash or by cashier’s check, and often the balance is due within days, even hours, of the purchase. Add this to the idea of buying a property with no inspection, often sight unseen, without being eligible for title insurance. You could be on the line for unpaid bills, liens, and pricey repairs. Furthermore, if the defaulting owners refuse to move out you’ll may have to oversee their eviction. Still there are bargains to be found here. If you can come up with the cash, be sure to do your homework prior to the sale – research the house in advance and know your state laws to minimize surprises.
When an auction is unsuccessful, the property reverts back to the financial institution that holds the mortgage. This is the final stage of foreclosure: the property is now REO, real estate owned. Buying at this stage means you can have an inspection done and qualify for title insurance. The bank has most likely dealt with any evictions and tax liens, and may have even done some repairs. This is a much safer deal, buy you might not get the savings you were hoping for. Small banks may offer better opportunities here – these houses are non-performing assets on the bank’s books. Remember, the bank has to pay for the upkeep of the property (or let it go and risk losing more money). So while they not be moved to action while holding just a couple of properties, as inventory piles up they should be more open to selling rather than holding.
Remember, you don’t want to become an example of history repeating itself: make sure you can afford your payments. Resist the urge to buy more than you can comfortably afford. Making a back up plan (and a rainy day fund) for unforeseen circumstances (such as an illness, injury, etc) will allow you some breathing room in a crunch. If you do find yourself in financial trouble, talk to a HUD approved housing counselor for free advice before you’re in too deep.
BRAIN
Nov
5
Homes for Sale Alessandro Heights FAQ
Filed Under Real Estate | Leave a Comment
Howard Henderson asked:
Homes For Sale Alessandro Heights
We all want to live the American Dream and a piece of that dream is to have your own home. However, not everyone is capable of buying one but you should consider in acquiring a house now. Looking at the Homes for sale Alessandro Heights will motivate your self in acquiring your own home. Even if our economy is in difficulty right now, experts say this is the best time to invest in a house. So either you are a renter or just want to buy your own house then this could be your most feasible chance to seize one.
Why is it ideal to buy a house when in fact we are experiencing recession? There are many houses for sale yet there are fewer buyers. It will take some time before this houses will be purchased. For that reason, sellers have no choice but to cut down their prices. Recession in the U.S. made house prices to drop by 15% to 30% depending on which part of the country. This opening is your best chance to buy a house at great deals.
Homes being sold at Alessandro Heights are considerably low compared to the past several years. Comparing a house acquired few years back and a house acquired few days back, there’s no contest that the newer house is the better bargain. In addition to that mortgage will be easier to pay because interest rates are at its lowest peak.
Owning a house is a priceless milestone that most of us strive. If you have the means to buy house then visit Alessandro Heights and find that dream house of yours. You will find different kinds of homes here to match your likings. Aside from that, Public Utilities are world class like high quality water and reliable electric services being served at low rates. And the City Hall aids its locals to develop their community.
With these in mind the only next thing to do is buy a house. Just hold that thought. First, look at your financial situation. Will you still enjoy those happy holidays when you start paying for your mortgage? Secondly, is the company you are working for been hit hard by recession? You will still have to pay your house even if you lose your job. One more thing is you need to know how willing you are to manage your house because you will maintain and look after it unlike renters who don’t own the place. Give all of these a plenty of thinking and if everything is in place then there will be no reason why you shouldn’t consider buying the dream home you have always wanted particularly at Alessandro heights.
Experience superior living like no other. Homes for Sale at Alessandro Heights introduces you to several topnotch options.Clearly, Riverside is the magnanimous choice for a safe and clean community. It is where you belong.
VICTOR
Homes For Sale Alessandro Heights
We all want to live the American Dream and a piece of that dream is to have your own home. However, not everyone is capable of buying one but you should consider in acquiring a house now. Looking at the Homes for sale Alessandro Heights will motivate your self in acquiring your own home. Even if our economy is in difficulty right now, experts say this is the best time to invest in a house. So either you are a renter or just want to buy your own house then this could be your most feasible chance to seize one.
Why is it ideal to buy a house when in fact we are experiencing recession? There are many houses for sale yet there are fewer buyers. It will take some time before this houses will be purchased. For that reason, sellers have no choice but to cut down their prices. Recession in the U.S. made house prices to drop by 15% to 30% depending on which part of the country. This opening is your best chance to buy a house at great deals.
Homes being sold at Alessandro Heights are considerably low compared to the past several years. Comparing a house acquired few years back and a house acquired few days back, there’s no contest that the newer house is the better bargain. In addition to that mortgage will be easier to pay because interest rates are at its lowest peak.
Owning a house is a priceless milestone that most of us strive. If you have the means to buy house then visit Alessandro Heights and find that dream house of yours. You will find different kinds of homes here to match your likings. Aside from that, Public Utilities are world class like high quality water and reliable electric services being served at low rates. And the City Hall aids its locals to develop their community.
With these in mind the only next thing to do is buy a house. Just hold that thought. First, look at your financial situation. Will you still enjoy those happy holidays when you start paying for your mortgage? Secondly, is the company you are working for been hit hard by recession? You will still have to pay your house even if you lose your job. One more thing is you need to know how willing you are to manage your house because you will maintain and look after it unlike renters who don’t own the place. Give all of these a plenty of thinking and if everything is in place then there will be no reason why you shouldn’t consider buying the dream home you have always wanted particularly at Alessandro heights.
Experience superior living like no other. Homes for Sale at Alessandro Heights introduces you to several topnotch options.Clearly, Riverside is the magnanimous choice for a safe and clean community. It is where you belong.
VICTOR
Oct
29
What’s Up With Real Estate?
Filed Under Real Estate | Leave a Comment
Kelli Bennett asked:
This is a question that is being asked in a somewhat panicked way across the nation. Over past 10 or more years this country had experienced a real estate boom of epic proportions. This boom inflated prices and kept the market in a seller’s market for quite some time. This also increased the number of homes and condos being developed and there was an incredible supply and a matching demand. This also made it more difficult for some people to get into a home as rising prices kept some people out of the market. This also caused what is now being referred to as the sub-prime lending crisis. So many people chose to take out 100% financing or high-interest loans to be able to purchase a home and when those mortgages could not be paid it led to an all-time high in foreclosures.
What does all this mean? Well, that is not exactly a short answer. As we have seen there is a slow down happening on a national real estate level. Certain areas are still showing good growth but the major markets that had exploded in past years are definitely seeing a reduced interest. This is a cause of concern for sellers and investors that have purchased numerous homes with the intent of selling them, as the market has moved back into a buyer’s market. It also means that those who are currently looking for homes have much more sway and the ability to find homes at great deals if they are willing to deal with foreclosures and short sales.
This has been a huge surprise for buyers in this country as they have not been used to having this much sway in the market. There really has not been a better time for buyers to get into the home market. However, today’s buyers should take example from the buyers of the past years and learn a few lessons from what has transpired over the long stretch of seller’s markets. Sub-prime lending is really not the way to go. Standard mortgage loans are really the preferable choice. If you cannot get a standard mortgage loan yet then take the time to correct your credit and finances. Don’t try to jump into a purchase they you may not be able to pay for in the long run. There are some real lessons to be learned from the recent history of the real estate market. Be sure to learn them before launching a home purchase.
VERNON
This is a question that is being asked in a somewhat panicked way across the nation. Over past 10 or more years this country had experienced a real estate boom of epic proportions. This boom inflated prices and kept the market in a seller’s market for quite some time. This also increased the number of homes and condos being developed and there was an incredible supply and a matching demand. This also made it more difficult for some people to get into a home as rising prices kept some people out of the market. This also caused what is now being referred to as the sub-prime lending crisis. So many people chose to take out 100% financing or high-interest loans to be able to purchase a home and when those mortgages could not be paid it led to an all-time high in foreclosures.
What does all this mean? Well, that is not exactly a short answer. As we have seen there is a slow down happening on a national real estate level. Certain areas are still showing good growth but the major markets that had exploded in past years are definitely seeing a reduced interest. This is a cause of concern for sellers and investors that have purchased numerous homes with the intent of selling them, as the market has moved back into a buyer’s market. It also means that those who are currently looking for homes have much more sway and the ability to find homes at great deals if they are willing to deal with foreclosures and short sales.
This has been a huge surprise for buyers in this country as they have not been used to having this much sway in the market. There really has not been a better time for buyers to get into the home market. However, today’s buyers should take example from the buyers of the past years and learn a few lessons from what has transpired over the long stretch of seller’s markets. Sub-prime lending is really not the way to go. Standard mortgage loans are really the preferable choice. If you cannot get a standard mortgage loan yet then take the time to correct your credit and finances. Don’t try to jump into a purchase they you may not be able to pay for in the long run. There are some real lessons to be learned from the recent history of the real estate market. Be sure to learn them before launching a home purchase.
VERNON
Oct
20
When not to Buy
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Virginia Wherland asked:
While it may be seen as a bad career move for a real estate agent to publish an article advising people not to buy a home, there are a few times when the decision to make a real estate investment should be put on hold.
If you have recently changed jobs, you may have a hard time getting financing for a new home. Rather than wasting valuable time looking for a home, a smarter option at that time might be to continue saving for a down payment while maintaining a regular work schedule. You could also work at building your good credit history by purchasing things on credit and promptly paying them off. Once your current employment history and monthly income has been consistent for at least a year, and you have a healthy down payment saved up, then contact an agent to be shown homes for sale in the area you are wanting to buy in.
Similarly, if you suspect you will need to change jobs soon it is best not to purchase a home. The process of buying a home is expensive even if you don’t consider the actual cost of the home. Imagine being laid off or transferred shortly after buying a home. If you are forced to make a quick sale of a home you just purchased, chances are you could lose thousands of dollars. Waiting until there is stability in your life is the best idea.
Let’s say you got a promotion, or recently hit your savings goal, and thought it would be a great time to buy a car. You need to decide what you’d rather buy, a house or a vehicle, because chances are good you will be unable to do both. When getting pre-qualified for a loan, the assessor looks not only at your credit history and income stability, but also at your debts. If you have a couple-hundred dollar vehicle payment every month, it will probably compromise your ability to be approved for a loan. A lender needs to see your income as far higher than your debts to know you will not default on their loan to you. While you may be willing to live frugally to make up for having both a mortgage and car payment, the bank isn’t going to see it that way. So if you are wanting to get into the real estate market in the near future, either purchase a much older and cheaper vehicle, or do with what you have for the time being. If you have just gotten into a vehicle loan, focus on paying it back as soon as possible before you try to enter the real estate market.
If you are new to an area, it might be a good idea to explore it a little before jumping into purchasing a home there. It can take time for the character details of different neighborhoods to reveal themselves, and buying in the “wrong neighborhood” is a decision that could affect you for life. Renting for at least a few months can seem like a waste of money, but in fact it gives you valuable time to make a wise decision about where you want to live and invest.
Of course no one likes to think about things like divorce or separation, but the reality is that some couples think buying a home together may save a failing marriage. Just like deciding to have a baby under similar circumstances, buying a home with a partner you aren’t completely stable with is not a good idea. Separations are never easy, but adding financial negotiations to divide up your assets only makes it more stressful.
MARCO
While it may be seen as a bad career move for a real estate agent to publish an article advising people not to buy a home, there are a few times when the decision to make a real estate investment should be put on hold.
If you have recently changed jobs, you may have a hard time getting financing for a new home. Rather than wasting valuable time looking for a home, a smarter option at that time might be to continue saving for a down payment while maintaining a regular work schedule. You could also work at building your good credit history by purchasing things on credit and promptly paying them off. Once your current employment history and monthly income has been consistent for at least a year, and you have a healthy down payment saved up, then contact an agent to be shown homes for sale in the area you are wanting to buy in.
Similarly, if you suspect you will need to change jobs soon it is best not to purchase a home. The process of buying a home is expensive even if you don’t consider the actual cost of the home. Imagine being laid off or transferred shortly after buying a home. If you are forced to make a quick sale of a home you just purchased, chances are you could lose thousands of dollars. Waiting until there is stability in your life is the best idea.
Let’s say you got a promotion, or recently hit your savings goal, and thought it would be a great time to buy a car. You need to decide what you’d rather buy, a house or a vehicle, because chances are good you will be unable to do both. When getting pre-qualified for a loan, the assessor looks not only at your credit history and income stability, but also at your debts. If you have a couple-hundred dollar vehicle payment every month, it will probably compromise your ability to be approved for a loan. A lender needs to see your income as far higher than your debts to know you will not default on their loan to you. While you may be willing to live frugally to make up for having both a mortgage and car payment, the bank isn’t going to see it that way. So if you are wanting to get into the real estate market in the near future, either purchase a much older and cheaper vehicle, or do with what you have for the time being. If you have just gotten into a vehicle loan, focus on paying it back as soon as possible before you try to enter the real estate market.
If you are new to an area, it might be a good idea to explore it a little before jumping into purchasing a home there. It can take time for the character details of different neighborhoods to reveal themselves, and buying in the “wrong neighborhood” is a decision that could affect you for life. Renting for at least a few months can seem like a waste of money, but in fact it gives you valuable time to make a wise decision about where you want to live and invest.
Of course no one likes to think about things like divorce or separation, but the reality is that some couples think buying a home together may save a failing marriage. Just like deciding to have a baby under similar circumstances, buying a home with a partner you aren’t completely stable with is not a good idea. Separations are never easy, but adding financial negotiations to divide up your assets only makes it more stressful.
MARCO
Oct
12
Getting Off To The Best Start When It Comes To Property Developers Finance
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Sean Horton asked:
Getting off to the best start possible with property developers finance can be done with the help of a specialist broking website. Not only does it give you help and advice but a broker will also work with you from the very word go and get your project off to a great start in the shortest time possible. Finance for property development is very different from taking out a personal loan. The interest rates will be based on the circumstances of the individual and the project to hand.
When it comes to the property developers finance loans can be taken out for commercial or residential property. The actual rate for the loan will be based on the individual’s circumstances, what the finance is wanted for and the industry sector. 1.5% and 2.5% are the average interest rates you would expect to pay and a broker will be able to dig out the cheapest based on your needs.
Property developer’s finance is not the easiest of topics to understand. The information can be very confusing and is often filled with a whole lot of technical jargon that the majority of people do not understand when first starting out. A specialist website will take the confusion out of finance terms and will explain them clearly. They will also work to put together your proposal with you which the majority of lenders will prefer. This can make the project take off easily and smoothly. Lenders are more likely to work quicker when dealing with a specialist broker than they do with the individual. This is because a broker will have gone though the proposal and all the necessary information including planning permission will be in place.
With the property developers finance, the majority of time an interest only loan is offered. While this is beneficial to the monthly repayments as it keeps them down, the downside is that you are only repaying the interest on the loan. Once the term of the loan has come to an end you will then have to find the lump sum to repay the capital which was originally borrowed. The majority of lenders will ask for proof that you have funds in place by which to repay this. A repayment loan on the other hand would pay off the interest and the capitol at the same time which means you clear off the loan within the period of taking it out.
Lenders will usually only allow the individual to borrow around 70% to 75% of the funding. This will be based on the projected gross property development costs. Sometimes a broker can help the individual to secure 100% property developers finance. This is especially so if you are an experienced developer and are willing to put up equity by the way of another property towards the amount borrowed. For all the aspects of financing for property development then getting a honest advice is imperative and this can be done by making good use of the FAQs and the articles which can be found on a specialist’s website.
ORLANDO
Getting off to the best start possible with property developers finance can be done with the help of a specialist broking website. Not only does it give you help and advice but a broker will also work with you from the very word go and get your project off to a great start in the shortest time possible. Finance for property development is very different from taking out a personal loan. The interest rates will be based on the circumstances of the individual and the project to hand.
When it comes to the property developers finance loans can be taken out for commercial or residential property. The actual rate for the loan will be based on the individual’s circumstances, what the finance is wanted for and the industry sector. 1.5% and 2.5% are the average interest rates you would expect to pay and a broker will be able to dig out the cheapest based on your needs.
Property developer’s finance is not the easiest of topics to understand. The information can be very confusing and is often filled with a whole lot of technical jargon that the majority of people do not understand when first starting out. A specialist website will take the confusion out of finance terms and will explain them clearly. They will also work to put together your proposal with you which the majority of lenders will prefer. This can make the project take off easily and smoothly. Lenders are more likely to work quicker when dealing with a specialist broker than they do with the individual. This is because a broker will have gone though the proposal and all the necessary information including planning permission will be in place.
With the property developers finance, the majority of time an interest only loan is offered. While this is beneficial to the monthly repayments as it keeps them down, the downside is that you are only repaying the interest on the loan. Once the term of the loan has come to an end you will then have to find the lump sum to repay the capital which was originally borrowed. The majority of lenders will ask for proof that you have funds in place by which to repay this. A repayment loan on the other hand would pay off the interest and the capitol at the same time which means you clear off the loan within the period of taking it out.
Lenders will usually only allow the individual to borrow around 70% to 75% of the funding. This will be based on the projected gross property development costs. Sometimes a broker can help the individual to secure 100% property developers finance. This is especially so if you are an experienced developer and are willing to put up equity by the way of another property towards the amount borrowed. For all the aspects of financing for property development then getting a honest advice is imperative and this can be done by making good use of the FAQs and the articles which can be found on a specialist’s website.
ORLANDO
Aug
14
Real Estate FAQ
Filed Under Real Estate | Leave a Comment
realestatebase asked:
A edge owns out a house that basically come out of foreclosure surrounded by my nouns, why did it be in motion from 43k to 12k?
It be later sold within 2004 for 43k. Now it is priced at 12k. The realtor stated that the house is priced properly…
A few question going on for renting out my property?
Firstly- i have lb70,000 equity in my current house contained by which i am hoping to split for a deposit on a new place for my self and a buy to let mortage. How should i split the…
A few question just about buying a home.?
What is a usual down costs on a house? What humane of money do I involve to be making organized to procure a nice loan amount for buying a home? What is a standard monthly payoff? (I know this…
A few years ago I took out a loan on my house & didn’t realize it be a Interest Only Loan until in a minute.
I’m sure you own see on the communication lately nearly adjectives these individuals that enjoy lost their home or are in the region of…
A FINANCE company for mobile homes?
I AM TRYING TO FIND A FINANCE COMPANY THAT WILL REFINANCE A MOBILE HOME AND TIE PERSONAL LOANS INTO IT AS WELL. ALSO A COMPANY THAT WILL ALLOW AN ALLOWANCE INTO THE LOAN TO DO SOME HOME REPAIRS?? THIS IS…
A flawless home collateral system i.e. not self installed, not a dog and doesn’t require a 3 year contract?
I have a great watch dog. I do not contemplate I could install a system myself but surely there is a reliable system that doesn’t lock you into three…
A friend and I are starting a clean video gaming business contained by Hawaii. We call for a christen!
?
Its going to be a type of video gaming place like an internet cafe of video games. Any help?
A Friend is living beside a in a minute ex-boyfriend, she is not on the lease, be in attendance for 2 years. Need serve!?
She has been living contained by the apt. for almost 2 years, the lease is in his name. She have yet to…
A friend of mine and me is thinking of starting a business of renting scooters on a shore. How much money..?
How much money do you think we would need to attain started? I figure upwards of $100k or close to it. I dont want to…
A friend of mine be given a Will,the will states he will preserve:?
his Grandpas house. The Gp. single put this in black and white. My friend wants to budge through Probate. Can he hold on to the house or does The State acquire the house? Are at hand…
A give somebody the third degree something like my building..Am I not dangerous?
I have a crappy hotelier. I have a shaft in the front room and it have a crack in it. It is not purely the first layer. I notice it’s in the roof beam…
A guy owes me money?
I did some electrical work for a guy a good 3 months ago and he has not salaried me I have told him several times to pay up but have still not made any payment. My dad told me about something call a…
A home worth $123,000 and a mortgage of $72, 400 would own what equity?
a home worth $123,000 and a mortgage of $72, 400 would have what equity? and also.. A home will an assessed value of $178,000 near a tax rate of $52 per…
A honourable baptize for a crew?
we are opening a nightclub and need a describe for the commercial for example when they say the name at club pajarito brought to you by _________ and thats wher the heading would go please help any design will do…
A hostess at a resturant?
I’m 15, turning 16 in June. I really want money for summer and other things.. I can’t handle brass at all, so i wouldn’t want to work at a fast food place I be thinking of a hostess, because it’s pretty easy, right?…
A house is $1,000 4 bed, 2bath striking neighborhood is in that any arrest to this?
the house is located on Dorais ST. N.E. $200 down, and $5 a month
A House next to wood frame…?
I found a house that im within love next to! it have a wood frame… How much more is house insurance going to be? We live in tampa nouns florida.
A house that be assessed at 70,800.00 ending year 07 would be worth what this year 08?
Keep in mind the decline contained by the housing market, and the certainty that the house has exotic windows, flooring, paint and other small repairs done since 07. Note:…
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My husband and I are have to find a house, and we don’t hold satisfactory money to put down on the house. So we plan on getting 100% financing can someone narrate me what this will do to us. What style of mortgage should…
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A interrogate in the order of Avon?
I really need help if not I’m going to be screwed. If you sell Avon or have sold it contained by the past, what would you do if you lost the cut out portion of your invoice that you have to…
A interrogate reg Housing Rent vocabulary practiced within Bangalore?
On the below items, Is it praciticed? and if so, is it correct? 1. 1 month rent is deducted from the deposit during vacate? in compensation to the possible unfilled house because frequently the tennents…
A legal representative from another country ,ivory coast west africa name barrister kings henshaw,how doi findoutmore info?
the companies name is , the royal chambers and partner,legalpractitioner,solicitors,ad… of the superior court, 32 ave . dugaullie 11 plateaux,ivoire coast west africa tele:011-225-04-32-64-47 fax:011-225-21-26-80-16 web:www.royalchambers.tk lawyer name: barrister kings…
A legitimate estate broker stand annual remuneration is $18,000. She earn 3% commission on total sale. How muc
A unadulterated estate broker underside annual gross is $18,000. She earn 3% commission on total sale. How much must she trade contained…
A limp palm tree fell on our coupé at our condo.?
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A loan for a home: I lately co-signed on a sports car, That sports car have be refinance, am I equipped for a lender all the same?
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A lost title surrounded by Texas?
I’m currently in the process of selling some land beside a mobile home on it. But lo and behold…by pure bad luck, I end up losing the deeds to everything I own. I be able to get the creation…
A moniker for my college house??!!?
I am in college and I only lease a house for subsequent year. All of the houses surrounded by the town hold name. Some of them are funny, or sexual, or purely crazy joke. I’m looking for a cute, creative…
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My boyfriend and I are in the process of buying a home. We found a double wide trailer close to work within the city. (Not in a park. It is on its own acre of…
A mound owns a house that simply come out of foreclosure contained by my nouns, why did it step from 43k to 12k?
It be second sold within 2004 for 43k. Now it is priced at 12k. The realtor stated that the house is priced suitably and that it’s…
More Real Estate Q&A Please visit : Real-Estate-Base.com
CLINT
A edge owns out a house that basically come out of foreclosure surrounded by my nouns, why did it be in motion from 43k to 12k?
It be later sold within 2004 for 43k. Now it is priced at 12k. The realtor stated that the house is priced properly…
A few question going on for renting out my property?
Firstly- i have lb70,000 equity in my current house contained by which i am hoping to split for a deposit on a new place for my self and a buy to let mortage. How should i split the…
A few question just about buying a home.?
What is a usual down costs on a house? What humane of money do I involve to be making organized to procure a nice loan amount for buying a home? What is a standard monthly payoff? (I know this…
A few years ago I took out a loan on my house & didn’t realize it be a Interest Only Loan until in a minute.
I’m sure you own see on the communication lately nearly adjectives these individuals that enjoy lost their home or are in the region of…
A FINANCE company for mobile homes?
I AM TRYING TO FIND A FINANCE COMPANY THAT WILL REFINANCE A MOBILE HOME AND TIE PERSONAL LOANS INTO IT AS WELL. ALSO A COMPANY THAT WILL ALLOW AN ALLOWANCE INTO THE LOAN TO DO SOME HOME REPAIRS?? THIS IS…
A flawless home collateral system i.e. not self installed, not a dog and doesn’t require a 3 year contract?
I have a great watch dog. I do not contemplate I could install a system myself but surely there is a reliable system that doesn’t lock you into three…
A friend and I are starting a clean video gaming business contained by Hawaii. We call for a christen!
?Its going to be a type of video gaming place like an internet cafe of video games. Any help?
A Friend is living beside a in a minute ex-boyfriend, she is not on the lease, be in attendance for 2 years. Need serve!?
She has been living contained by the apt. for almost 2 years, the lease is in his name. She have yet to…
A friend of mine and me is thinking of starting a business of renting scooters on a shore. How much money..?
How much money do you think we would need to attain started? I figure upwards of $100k or close to it. I dont want to…
A friend of mine be given a Will,the will states he will preserve:?
his Grandpas house. The Gp. single put this in black and white. My friend wants to budge through Probate. Can he hold on to the house or does The State acquire the house? Are at hand…
A give somebody the third degree something like my building..Am I not dangerous?
I have a crappy hotelier. I have a shaft in the front room and it have a crack in it. It is not purely the first layer. I notice it’s in the roof beam…
A guy owes me money?
I did some electrical work for a guy a good 3 months ago and he has not salaried me I have told him several times to pay up but have still not made any payment. My dad told me about something call a…
A home worth $123,000 and a mortgage of $72, 400 would own what equity?
a home worth $123,000 and a mortgage of $72, 400 would have what equity? and also.. A home will an assessed value of $178,000 near a tax rate of $52 per…
A honourable baptize for a crew?
we are opening a nightclub and need a describe for the commercial for example when they say the name at club pajarito brought to you by _________ and thats wher the heading would go please help any design will do…
A hostess at a resturant?
I’m 15, turning 16 in June. I really want money for summer and other things.. I can’t handle brass at all, so i wouldn’t want to work at a fast food place I be thinking of a hostess, because it’s pretty easy, right?…
A house is $1,000 4 bed, 2bath striking neighborhood is in that any arrest to this?
the house is located on Dorais ST. N.E. $200 down, and $5 a month
A House next to wood frame…?
I found a house that im within love next to! it have a wood frame… How much more is house insurance going to be? We live in tampa nouns florida.
A house that be assessed at 70,800.00 ending year 07 would be worth what this year 08?
Keep in mind the decline contained by the housing market, and the certainty that the house has exotic windows, flooring, paint and other small repairs done since 07. Note:…
A housing issue?
My husband and I are have to find a house, and we don’t hold satisfactory money to put down on the house. So we plan on getting 100% financing can someone narrate me what this will do to us. What style of mortgage should…
A interrogate for former FSBO? why did you swich to a Realtor? 10 pts to best answer.?
Why did you swich from selling FSBO? what made you do it? please tell me the short version of your experience. what made you choose the agent you go with?
A interrogate in the order of Avon?
I really need help if not I’m going to be screwed. If you sell Avon or have sold it contained by the past, what would you do if you lost the cut out portion of your invoice that you have to…
A interrogate reg Housing Rent vocabulary practiced within Bangalore?
On the below items, Is it praciticed? and if so, is it correct? 1. 1 month rent is deducted from the deposit during vacate? in compensation to the possible unfilled house because frequently the tennents…
A legal representative from another country ,ivory coast west africa name barrister kings henshaw,how doi findoutmore info?
the companies name is , the royal chambers and partner,legalpractitioner,solicitors,ad… of the superior court, 32 ave . dugaullie 11 plateaux,ivoire coast west africa tele:011-225-04-32-64-47 fax:011-225-21-26-80-16 web:www.royalchambers.tk lawyer name: barrister kings…
A legitimate estate broker stand annual remuneration is $18,000. She earn 3% commission on total sale. How muc
A unadulterated estate broker underside annual gross is $18,000. She earn 3% commission on total sale. How much must she trade contained…
A limp palm tree fell on our coupé at our condo.?
A dead palm tree fell on our car within its assigned parking space and damage the hood. WHEN the condo board was contacted they said to hail as our car insurance that they are not responsible….
A loan for a home: I lately co-signed on a sports car, That sports car have be refinance, am I equipped for a lender all the same?
I recently co-signed on a motor for a family associate, and they didn’t miss a payment or even manufacture a…
A lost title surrounded by Texas?
I’m currently in the process of selling some land beside a mobile home on it. But lo and behold…by pure bad luck, I end up losing the deeds to everything I own. I be able to get the creation…
A moniker for my college house??!!?
I am in college and I only lease a house for subsequent year. All of the houses surrounded by the town hold name. Some of them are funny, or sexual, or purely crazy joke. I’m looking for a cute, creative…
A mortgage for a trailor on its own environment surrounded by the city?
My boyfriend and I are in the process of buying a home. We found a double wide trailer close to work within the city. (Not in a park. It is on its own acre of…
A mound owns a house that simply come out of foreclosure contained by my nouns, why did it step from 43k to 12k?
It be second sold within 2004 for 43k. Now it is priced at 12k. The realtor stated that the house is priced suitably and that it’s…
More Real Estate Q&A Please visit : Real-Estate-Base.com
CLINT
Aug
1
Unbeatable Strategies to Get in the Real Estate Game With Little Cash or Credit
Filed Under Real Estate | Leave a Comment
Sean Flanagan asked:
Real estate investing is an exciting, yet lucrative, way to create sustainable wealth and residual income, while securing your family’s economic future. Unlike many other business opportunities, real estate entrepreneurs don’t need a mountain of cash or flawless credit in order to get in the game. Here are four effective strategies for launching your own real estate investing empire
Bird Dogging — This is probably one of the simplest ways of getting started as a real estate investor. Instead of marketing property, you’re more of an information broker. A bird dog simply locates property that is available at below market prices, gathers some information about the property and the owner, and forwards the information to a real estate investor that would be willing to make the purchase.
Bird dogs gather much of the information a real estate investor needs in order to evaluate whether or not a property would make a good investment. Examples of the kind of information gathered include:
· Name and address of property owner
· Asking price of the property
· Condition of property (sometimes with photographs)
· Information about current financing and payment status
· Background information regarding liens and other encumbrances
· Detailed report about owner’s motivation to sell
· Sometimes an analysis of rehabilitation costs and anticipated after repair value
Depending on the arrangement you work out with the investor and the amount of work involved, bird dog fees average between $500 and $1000 — and sometimes much more. You don’t need any cash or credit, and because you’re simply providing another investor with information, there’s absolutely no risk to you of becoming entangled in any type of property dispute. You risk only your time, and if the investor to which you give the information fails to pay you for your services, you simply avoid doing business with that investor again in the future. However, investors are hungry for moneymaking properties; therefore, the overwhelming majority will gladly pay you for quality information.
Wholesaling — This method of real estate investing involves many of the same elements of bird dogging, but in this case, you actually approach the owner of the property, negotiate a sales price, and place the property under contract for sale. Instead of making the purchase yourself, however, you assign — or sell — your interest in the property to another investor, who then completes the transaction in your place.
For instance, pretend you locate a property worth $100,000 and you were able to negotiate a sales price with the owner of $60,000. You would gather all the required information, and “sell” your real estate contract to another investor. That investor will generally be willing to pay you between $1000 and $3000 for the right to complete the transaction with the seller in your place. Again, the amount of money you can make for each transaction will vary depending upon the investor with whom you are working and the amount of work you have invested in the process. I’ve heard of investors receiving as much as $5000-$10,000, depending on the margin of profit available to the investor.
Double Closing — Sometimes you’ll locate a property that has an extremely motivated owner. If you do, it’s possible that the seller might be willing to sell you the property for as little as 40% of its value. If this happens, you can still assign your contract to another buyer, but you may want to keep more of the profit for yourself. When this is the case, you simply arrange for a double closing. Here’s how it works:
· You sign a contract to purchase the property from the seller
· You then sign a contract to sell the property to another buyer or investor
· On closing day, the investor or buyer of the property pays you for your interest in the property
· You then take the proceeds you’ve received from the sale of the property to pay the seller, retaining the difference for yourself
Because there is an increased risk that your buyer could potentially back out of the deal before the transaction is complete, you receive a much greater reward. Another way of accomplishing the same goal is by you obtaining a hard money loan in order to pay the seller first for the property. You can then turn around and sell your interest in the property to another buyer. While you’ll incur some financing charges to the hard money lender, you may determine that the expense is worth it in light of the amount of money you’ll be making off of the deal.
Subject to — The fourth strategy I want to identify for getting involved in real estate investing with little cash or credit is by purchasing a property from a seller subject to the existing financing. You don’t have to actually assume legal responsibility for the existing financing, but you are purchasing from the seller and are acknowledging the existence of the current financing.
Each month, you would pay the owner of the property a house payment equal to the amount you’ve worked out, and the homeowner will then make the underlying mortgage payment, retaining the difference for themselves.
If the owner’s lender finds out that equitable title of the property has passed to you, there is an outside chance that the lender could call the note and require payment in full for the loan. However, the reality is that right now millions of Americans are unable to make their house payments. Lenders are overwhelmed by foreclosures and other delinquencies. They don’t have the time or the inclination to look at each payment check that comes through the door to ensure that the payment is actually being made by the borrower. In all honesty, they’re just grateful to get their money; they really don’t care how the loan gets paid as long as it gets paid.
As you can see, getting into the real estate game and making money is possible regardless of whether or not you have impeccable credit or a mountain of cash at your disposal. I’ve identified just four ways that you can get involved in real estate investing on a scale congruent to your level of experience and your willingness to take on risk. There are many others that you can learn. A good real estate Coach can provide advice and insider knowledge about these and many other more advanced real estate investing techniques. Regardless of whether you seek out a mentor or you fly solo, real estate investing provides you with multiple ways of creating wealth and a much brighter future. You won’t get rich overnight, but by being smart and learning the ropes real estate investing can be your ticket to a secure future.
NICKOLAS
Real estate investing is an exciting, yet lucrative, way to create sustainable wealth and residual income, while securing your family’s economic future. Unlike many other business opportunities, real estate entrepreneurs don’t need a mountain of cash or flawless credit in order to get in the game. Here are four effective strategies for launching your own real estate investing empire
Bird Dogging — This is probably one of the simplest ways of getting started as a real estate investor. Instead of marketing property, you’re more of an information broker. A bird dog simply locates property that is available at below market prices, gathers some information about the property and the owner, and forwards the information to a real estate investor that would be willing to make the purchase.
Bird dogs gather much of the information a real estate investor needs in order to evaluate whether or not a property would make a good investment. Examples of the kind of information gathered include:
· Name and address of property owner
· Asking price of the property
· Condition of property (sometimes with photographs)
· Information about current financing and payment status
· Background information regarding liens and other encumbrances
· Detailed report about owner’s motivation to sell
· Sometimes an analysis of rehabilitation costs and anticipated after repair value
Depending on the arrangement you work out with the investor and the amount of work involved, bird dog fees average between $500 and $1000 — and sometimes much more. You don’t need any cash or credit, and because you’re simply providing another investor with information, there’s absolutely no risk to you of becoming entangled in any type of property dispute. You risk only your time, and if the investor to which you give the information fails to pay you for your services, you simply avoid doing business with that investor again in the future. However, investors are hungry for moneymaking properties; therefore, the overwhelming majority will gladly pay you for quality information.
Wholesaling — This method of real estate investing involves many of the same elements of bird dogging, but in this case, you actually approach the owner of the property, negotiate a sales price, and place the property under contract for sale. Instead of making the purchase yourself, however, you assign — or sell — your interest in the property to another investor, who then completes the transaction in your place.
For instance, pretend you locate a property worth $100,000 and you were able to negotiate a sales price with the owner of $60,000. You would gather all the required information, and “sell” your real estate contract to another investor. That investor will generally be willing to pay you between $1000 and $3000 for the right to complete the transaction with the seller in your place. Again, the amount of money you can make for each transaction will vary depending upon the investor with whom you are working and the amount of work you have invested in the process. I’ve heard of investors receiving as much as $5000-$10,000, depending on the margin of profit available to the investor.
Double Closing — Sometimes you’ll locate a property that has an extremely motivated owner. If you do, it’s possible that the seller might be willing to sell you the property for as little as 40% of its value. If this happens, you can still assign your contract to another buyer, but you may want to keep more of the profit for yourself. When this is the case, you simply arrange for a double closing. Here’s how it works:
· You sign a contract to purchase the property from the seller
· You then sign a contract to sell the property to another buyer or investor
· On closing day, the investor or buyer of the property pays you for your interest in the property
· You then take the proceeds you’ve received from the sale of the property to pay the seller, retaining the difference for yourself
Because there is an increased risk that your buyer could potentially back out of the deal before the transaction is complete, you receive a much greater reward. Another way of accomplishing the same goal is by you obtaining a hard money loan in order to pay the seller first for the property. You can then turn around and sell your interest in the property to another buyer. While you’ll incur some financing charges to the hard money lender, you may determine that the expense is worth it in light of the amount of money you’ll be making off of the deal.
Subject to — The fourth strategy I want to identify for getting involved in real estate investing with little cash or credit is by purchasing a property from a seller subject to the existing financing. You don’t have to actually assume legal responsibility for the existing financing, but you are purchasing from the seller and are acknowledging the existence of the current financing.
Each month, you would pay the owner of the property a house payment equal to the amount you’ve worked out, and the homeowner will then make the underlying mortgage payment, retaining the difference for themselves.
If the owner’s lender finds out that equitable title of the property has passed to you, there is an outside chance that the lender could call the note and require payment in full for the loan. However, the reality is that right now millions of Americans are unable to make their house payments. Lenders are overwhelmed by foreclosures and other delinquencies. They don’t have the time or the inclination to look at each payment check that comes through the door to ensure that the payment is actually being made by the borrower. In all honesty, they’re just grateful to get their money; they really don’t care how the loan gets paid as long as it gets paid.
As you can see, getting into the real estate game and making money is possible regardless of whether or not you have impeccable credit or a mountain of cash at your disposal. I’ve identified just four ways that you can get involved in real estate investing on a scale congruent to your level of experience and your willingness to take on risk. There are many others that you can learn. A good real estate Coach can provide advice and insider knowledge about these and many other more advanced real estate investing techniques. Regardless of whether you seek out a mentor or you fly solo, real estate investing provides you with multiple ways of creating wealth and a much brighter future. You won’t get rich overnight, but by being smart and learning the ropes real estate investing can be your ticket to a secure future.
NICKOLAS
Mar
12
Gloria de Gaston Boone asked:
A new Reverse Mortgage Limit (FHA/HECM) has been announced. This new limit, a part of the FHA Modernization Act (which was part of the overall Housing & Foreclosure Rescue Bill) will be a nationwide limit – not the old county by county limit. It has been raised to $417,000.
By making the reverse mortgage one national lending amount, it will simplify things considerably for both the lender and the borrower. This is welcome news as it brings the lending limit more in line with current housing prices (in spite of the downturn of the last couple of years).
A reverse mortgage is for seniors who are 62+, own their home (with or without a mortgage), and use it as their principal residence. There are no mortgage payments; no credit, income or asset qualifying; it does not affect Social Security or Medicare; the funds are non-taxable.
Seniors may take the funds (after paying off any current mortgage) as lifetime monthly payments, a lump sum or as a credit line, or any combination. If they wish to makepayments, that is OK, too.
The mortgage is good for as long as any of the borrowers live in the property. In addition it is a non-recourse loan, meaning that the lender cannot attach other assets if the loan ever exceeds the value of the home.
If that happens, then when the house is sold FHA pays the difference to the lender. Most of the time, the loan does not reach the value of the home, and when it is sold, the seniors, or their heirs receive the difference.
Starting in April, 2007, certain members of Congress, FHA and NRMLA (National Reverse Mortgage Lenders Association) and AARP started working together to make the Reverse Mortgage loan amounts catch up to the real market prices, lower fees, enable it to be used for purchases (instead of only refinances), and to include Co-Ops in the program. Now, finally, some of these goals are in effect.
BACKGROUND OF THE REVERSE MORTGAGE
Over the years, since 1987, when President Reagan signed FHA Home Equity Conversion Mortgage (HECM) bill into law, FHA and others such as Congress, AARP, and NRMLA have worked to improve this financing instrument. For those who need to use part of the equity in their homes to get cash to cover rising living and medical costs, and, yet, have no mortgage payment, it has been a valuable program.
It was part of the overall program called “Aging in Place” because studies and polls had shown that over 85% of seniors wanted to live in their homes, and neighborhoods. Many were “house rich, but cash poor”, yet wanted to stay where their friends and relatives were, and where they had raised their children.
Due to the rise in home prices, even downsizing was often over their financial means since their home price, less their mortgage didn’t leave enough to buy smaller place close to the old neighborhood, and smaller incomes did not allow them to qualify for a regular mortgage to make up the difference.
They also desired to retain as much of their independence for as long as possible. When they got sick, they wanted to invite home-care workers in, rather than going to an assisted living facility or other care facility. Sociological studies have shown the health of the elderly and the quality of neighborhoods is enhanced by keeping people of all ages in a neighborhood.
Prior to the government getting involved in the reverse mortgage program, some unscrupulous brokers had taken advantage of seniors by going on title and sharing in the homes’ appreciation, or steering seniors with new cash from their reverse mortgages into unsafe, irresponsible investments that made the broker more money – but punished the seniors.
Often, seniors, especially those who were older did not understand, nor have the details of the reverse mortgage explained to them. Some even lost their homes. And, today, while these practices are minimal, the rumors persist.
Those old practices have been curtailed by requiring mandatory counseling by HUD approved counselors, and required disclosure forms in the loan package – and by constant encouragement by professional lenders to have the seniors bring a relative, advisor, attorney or trusted friend with them when applying and closing a reverse mortgage.
Now, new laws and enforcement have all but stopped these practices – and further new laws passed to close any loopholes.
From time to FHA reviews the program. For instance, when the program first started, only detached, single family homes were included, but over the year’s owner-occupied 2-4 unit buildings, condominiums and even some modular-type homes were added to the program.
WHAT DO THE NEW FHA MODERNIZATION ACT CHANGES MEAN?
It means that for certain seniors who have wanted to get a reverse mortgage to pay off their older, higher loan-to-value mortgages, but were a bit short of the equity to qualify (or would have to have come to the settlement table with cash), this problem may now be solved. Also, people with higher value homes will receive larger loans, or credit lines. In addition, the lender origination fee has been reduced and is also effective now.
There had been hope that there would be a limit of $625,000 for high-cost areas, but according to sources involved in the negotiations, just how that would be done created very complicated and uneven solutions.
So, the $417,000 was settled on as the final number.
Several other changes mandated by Congress for changes in the Reverse Mortgage are still forthcoming – such as being able to use the Reverse Mortgage for purchases, instead of only refinances; and including Co-op’s in the program.
These changes will be announced when details have been worked out. Will there ever be a differing high-cost area limit? That remains to be seen over time.
To begin with it depends on where you live. Here in Northern Virginia, and Washington, D.C. the old county FHA HECM (Reverse Mortgage) limits ranged from a high of $362,790 down to a low of $264,100.
Below are a few examples; they are based on a couple aged 70, who own a $450,000 home with interest rates between 4.5% and 5.5%. These are examples only, and to see what you would might qualify for:
1. If you have been living in a county (D.C., Arlington, Fairfax) where the lending limit was $362,790, you would have received $208,000-$218,000 in net proceeds (after costs, but prior to paying off your current loan, and depending on which HECM you chose). Under the new program your net proceeds would be about $281,800, giving you approximately $62,000-$69,000 more.
2. If you have been living in a county (Frederick) where the lending limit was $361,000, you would have received $206,000-$216,000 in net proceeds (after costs, but prior to paying off your current loan, and depending on which HECM you chose). Under the new program your net proceeds would be about $281,800, giving you approximately $76,000-$86,000 more.
3. If you have been living in a county where the lending limit was $290,319, (Culpeper) you would have received $165,000-$175,000 in net proceeds (after costs, but prior to paying off your current loan, and depending on which HECM you chose). Under the new program your net proceeds would be about $281,800, giving you approximately $109,000-$117,000 more.
4. If you have been living in a county (Prince George) where the lending limit was $264,100, you would have received $149,500 – $156,700 in net proceeds (after costs, but prior to paying off your current loan, and depending on which HECM you chose). Under the new program your net proceeds would be about $281,800, giving you approximately $126,000-$133,000 more.
The new limit of $417,000 is targeted to be effective on November 1, 2008. Taking a Reverse Mortgage application, doing the mandatory counseling, getting an FHA approved appraisal and setting up settlement takes about 30-45 days. So, if you have been waiting for this limit increase, or feel the reverse mortgage would be even more beneficial to you now, it’s not too early to get started.
Also if you currently have a reverse mortgage and want to se if it makes sense to refinance it and ge more of our equity in cash, or to put in a credit line, or have lifetime monthly payments, please see a reputable lender. If you refinance a reverse mortgage, the cost of the FHA Mortgage Insurance is lower, too.
If you are interested in the way a Reverse Mortgage works, please come to my blog at http://reversemortgagesnow.blogspot.com and look in the left column. Under the title Reverse Mortgage Basics you will find pages that explain how the reverse mortgage works, FAQ’s, who uses reverse mortgages, and more.
ALLEN
A new Reverse Mortgage Limit (FHA/HECM) has been announced. This new limit, a part of the FHA Modernization Act (which was part of the overall Housing & Foreclosure Rescue Bill) will be a nationwide limit – not the old county by county limit. It has been raised to $417,000.
By making the reverse mortgage one national lending amount, it will simplify things considerably for both the lender and the borrower. This is welcome news as it brings the lending limit more in line with current housing prices (in spite of the downturn of the last couple of years).
A reverse mortgage is for seniors who are 62+, own their home (with or without a mortgage), and use it as their principal residence. There are no mortgage payments; no credit, income or asset qualifying; it does not affect Social Security or Medicare; the funds are non-taxable.
Seniors may take the funds (after paying off any current mortgage) as lifetime monthly payments, a lump sum or as a credit line, or any combination. If they wish to makepayments, that is OK, too.
The mortgage is good for as long as any of the borrowers live in the property. In addition it is a non-recourse loan, meaning that the lender cannot attach other assets if the loan ever exceeds the value of the home.
If that happens, then when the house is sold FHA pays the difference to the lender. Most of the time, the loan does not reach the value of the home, and when it is sold, the seniors, or their heirs receive the difference.
Starting in April, 2007, certain members of Congress, FHA and NRMLA (National Reverse Mortgage Lenders Association) and AARP started working together to make the Reverse Mortgage loan amounts catch up to the real market prices, lower fees, enable it to be used for purchases (instead of only refinances), and to include Co-Ops in the program. Now, finally, some of these goals are in effect.
BACKGROUND OF THE REVERSE MORTGAGE
Over the years, since 1987, when President Reagan signed FHA Home Equity Conversion Mortgage (HECM) bill into law, FHA and others such as Congress, AARP, and NRMLA have worked to improve this financing instrument. For those who need to use part of the equity in their homes to get cash to cover rising living and medical costs, and, yet, have no mortgage payment, it has been a valuable program.
It was part of the overall program called “Aging in Place” because studies and polls had shown that over 85% of seniors wanted to live in their homes, and neighborhoods. Many were “house rich, but cash poor”, yet wanted to stay where their friends and relatives were, and where they had raised their children.
Due to the rise in home prices, even downsizing was often over their financial means since their home price, less their mortgage didn’t leave enough to buy smaller place close to the old neighborhood, and smaller incomes did not allow them to qualify for a regular mortgage to make up the difference.
They also desired to retain as much of their independence for as long as possible. When they got sick, they wanted to invite home-care workers in, rather than going to an assisted living facility or other care facility. Sociological studies have shown the health of the elderly and the quality of neighborhoods is enhanced by keeping people of all ages in a neighborhood.
Prior to the government getting involved in the reverse mortgage program, some unscrupulous brokers had taken advantage of seniors by going on title and sharing in the homes’ appreciation, or steering seniors with new cash from their reverse mortgages into unsafe, irresponsible investments that made the broker more money – but punished the seniors.
Often, seniors, especially those who were older did not understand, nor have the details of the reverse mortgage explained to them. Some even lost their homes. And, today, while these practices are minimal, the rumors persist.
Those old practices have been curtailed by requiring mandatory counseling by HUD approved counselors, and required disclosure forms in the loan package – and by constant encouragement by professional lenders to have the seniors bring a relative, advisor, attorney or trusted friend with them when applying and closing a reverse mortgage.
Now, new laws and enforcement have all but stopped these practices – and further new laws passed to close any loopholes.
From time to FHA reviews the program. For instance, when the program first started, only detached, single family homes were included, but over the year’s owner-occupied 2-4 unit buildings, condominiums and even some modular-type homes were added to the program.
WHAT DO THE NEW FHA MODERNIZATION ACT CHANGES MEAN?
It means that for certain seniors who have wanted to get a reverse mortgage to pay off their older, higher loan-to-value mortgages, but were a bit short of the equity to qualify (or would have to have come to the settlement table with cash), this problem may now be solved. Also, people with higher value homes will receive larger loans, or credit lines. In addition, the lender origination fee has been reduced and is also effective now.
There had been hope that there would be a limit of $625,000 for high-cost areas, but according to sources involved in the negotiations, just how that would be done created very complicated and uneven solutions.
So, the $417,000 was settled on as the final number.
Several other changes mandated by Congress for changes in the Reverse Mortgage are still forthcoming – such as being able to use the Reverse Mortgage for purchases, instead of only refinances; and including Co-op’s in the program.
These changes will be announced when details have been worked out. Will there ever be a differing high-cost area limit? That remains to be seen over time.
To begin with it depends on where you live. Here in Northern Virginia, and Washington, D.C. the old county FHA HECM (Reverse Mortgage) limits ranged from a high of $362,790 down to a low of $264,100.
Below are a few examples; they are based on a couple aged 70, who own a $450,000 home with interest rates between 4.5% and 5.5%. These are examples only, and to see what you would might qualify for:
1. If you have been living in a county (D.C., Arlington, Fairfax) where the lending limit was $362,790, you would have received $208,000-$218,000 in net proceeds (after costs, but prior to paying off your current loan, and depending on which HECM you chose). Under the new program your net proceeds would be about $281,800, giving you approximately $62,000-$69,000 more.
2. If you have been living in a county (Frederick) where the lending limit was $361,000, you would have received $206,000-$216,000 in net proceeds (after costs, but prior to paying off your current loan, and depending on which HECM you chose). Under the new program your net proceeds would be about $281,800, giving you approximately $76,000-$86,000 more.
3. If you have been living in a county where the lending limit was $290,319, (Culpeper) you would have received $165,000-$175,000 in net proceeds (after costs, but prior to paying off your current loan, and depending on which HECM you chose). Under the new program your net proceeds would be about $281,800, giving you approximately $109,000-$117,000 more.
4. If you have been living in a county (Prince George) where the lending limit was $264,100, you would have received $149,500 – $156,700 in net proceeds (after costs, but prior to paying off your current loan, and depending on which HECM you chose). Under the new program your net proceeds would be about $281,800, giving you approximately $126,000-$133,000 more.
The new limit of $417,000 is targeted to be effective on November 1, 2008. Taking a Reverse Mortgage application, doing the mandatory counseling, getting an FHA approved appraisal and setting up settlement takes about 30-45 days. So, if you have been waiting for this limit increase, or feel the reverse mortgage would be even more beneficial to you now, it’s not too early to get started.
Also if you currently have a reverse mortgage and want to se if it makes sense to refinance it and ge more of our equity in cash, or to put in a credit line, or have lifetime monthly payments, please see a reputable lender. If you refinance a reverse mortgage, the cost of the FHA Mortgage Insurance is lower, too.
If you are interested in the way a Reverse Mortgage works, please come to my blog at http://reversemortgagesnow.blogspot.com and look in the left column. Under the title Reverse Mortgage Basics you will find pages that explain how the reverse mortgage works, FAQ’s, who uses reverse mortgages, and more.
ALLEN
Feb
27
Joe Samson asked:
Shopping for a house can be an overwhelming experience. There are so many factors to consider, it’s easy to fill your head and become frustrated. One simple mental exercise can help get through this storm of emotions and help you focus on what you really want. Before you go out shopping consider the following three questions:
Where do you want to live?
Think about what type of needs you have and what sort of location will help facilitate your lifestyle. If you have kids, are there schools nearby, and if so, what are they like? What sort of commute will you or your spouse have to work? If you won’t be driving, where is the closest source of public transit?
Do you want to be close to friends and family? If you’re planning on starting a family, will this new location be appropriate for your new lifestyle?
Think about these things to help get a mental picture of your needs in your new location.
What sort of home and features are you looking for?
The type of home you desire may be in part determined by your budget. A town house or semi-detached is usually less expensive than a single-family home. If you want extra space between you and your neighbours, one of the above may not be your ideal choice.
What do you want to see when you look out your window? Do you want a home with a view or some property? If you’re the type that goes away for months at a time or desire a maintenance-free type of home, a condominium or townhouse may be your best bet.
Also going hand in hand with the type of home, is the type of features you’re looking for in a house. Do you feel more comfortable in an open concept home with vaulted ceilings or do you like lots of divided rooms? How many bedrooms and bathrooms do you want? Does it matter whether the basement is finished or if your future home has a deck?
Make yourself a checklist of the most important features you desire, and rate the various houses as you walk through them. This will help you to remember which home had which feature. After spending an afternoon touring through houses, they all start to blend together.
How much can you afford?
You’ll save yourself a lot of frustration by determining what price range you’re comfortable with before you start shopping. It’s so easy to get caught up in an emotional buy if you don’t have a set of guidelines to follow. When deciding on a price range don’t forget to factor in any upcoming events that may affect your budget, changes in employment or large purchases such as a car. Also add in closing costs which may be estimated at about 2% of the purchase price.
Make it easier on yourself by touring homes within your price range. It’s also helpful to apply for a pre-qualified mortgage ahead of time, and you’ll know exactly how much you can realistically afford.
DANTE
Shopping for a house can be an overwhelming experience. There are so many factors to consider, it’s easy to fill your head and become frustrated. One simple mental exercise can help get through this storm of emotions and help you focus on what you really want. Before you go out shopping consider the following three questions:
Where do you want to live?
Think about what type of needs you have and what sort of location will help facilitate your lifestyle. If you have kids, are there schools nearby, and if so, what are they like? What sort of commute will you or your spouse have to work? If you won’t be driving, where is the closest source of public transit?
Do you want to be close to friends and family? If you’re planning on starting a family, will this new location be appropriate for your new lifestyle?
Think about these things to help get a mental picture of your needs in your new location.
What sort of home and features are you looking for?
The type of home you desire may be in part determined by your budget. A town house or semi-detached is usually less expensive than a single-family home. If you want extra space between you and your neighbours, one of the above may not be your ideal choice.
What do you want to see when you look out your window? Do you want a home with a view or some property? If you’re the type that goes away for months at a time or desire a maintenance-free type of home, a condominium or townhouse may be your best bet.
Also going hand in hand with the type of home, is the type of features you’re looking for in a house. Do you feel more comfortable in an open concept home with vaulted ceilings or do you like lots of divided rooms? How many bedrooms and bathrooms do you want? Does it matter whether the basement is finished or if your future home has a deck?
Make yourself a checklist of the most important features you desire, and rate the various houses as you walk through them. This will help you to remember which home had which feature. After spending an afternoon touring through houses, they all start to blend together.
How much can you afford?
You’ll save yourself a lot of frustration by determining what price range you’re comfortable with before you start shopping. It’s so easy to get caught up in an emotional buy if you don’t have a set of guidelines to follow. When deciding on a price range don’t forget to factor in any upcoming events that may affect your budget, changes in employment or large purchases such as a car. Also add in closing costs which may be estimated at about 2% of the purchase price.
Make it easier on yourself by touring homes within your price range. It’s also helpful to apply for a pre-qualified mortgage ahead of time, and you’ll know exactly how much you can realistically afford.
DANTE