Monday, May 31, 2010

Money in Foreclosed Properties

Foreclosed properties are source of bargain properties. One can buy them; and then, either rent them out or upgrade them to for a profit. Records show that in 2005 alone, there were 800,000 foreclosed properties, and these increased quarterly since then. To dabble on foreclosed properties, there are questions that need to be answered –

• What type of property to buy?
• Where to get money to purchase the property?
• What to buy- foreclosed or auction properties?
• Where to buy- from banks or from the government?
• How much taxes needed in buying and selling the property?
• How much are the renovation and upgrading costs?
• How to renovate- thru owner’s labor or thru expert construction workers?
• Will he either to sell or rent out the upgraded property?
• How long will the investment be recovered or makes a profit?

Some schemes of buying foreclosed properties offer a no-down payment plan. This seems very attractive, because whatever happens to the housing loan, the buyer will not absorb any loss. But this is not the case. Once the borrower-buyer fails in his amortization, and his property foreclosed, definitely his credit standing will greatly suffer. And to recover good credit standing, it will take years of being a good loan payer.

Sometimes, it is better to get a housing loan from a good local lender than banks. The former gives lower rates and shorter loan processing period. It is also a good move to hire a reliable mortgage broker, because in spite of the addition 1% broker’s fee expense, it is worth in terms of expert advice, time savings and getting the best possible terms for ones loan. Buying foreclosed properties is most logical and attractive move of a real estate investor now. Because of the dirt-low prices and the easy terms that financial institutions are offering, to unload these properties out of their systems. But still, the prospective must be careful in making the move. Seek experts’ advice.

Saturday, May 29, 2010

Computing Your Mortgage

One of the major reasons why the recent recession occurred was because of the surmounting credit of people. There was a false demand in the market, as people acquired things beyond their ability to pay. When it was time to pay, there was no real money to back up the demand, resulting to economic failure and bankruptcy.

Real estate was no exception. There were many short sales and foreclosures when many people could no longer afford to pay their mortgage (aside from the fact that many were laid off from their jobs). To avoid this, it is always good How much can you comfortably spend for a house of your own?
A simple rule to follow is to multiply your annual salary two and a half times. An annual salary of $72,000 can afford a $180,000 home. Beyond than that it would cause some inconvenience. Married couples would be better of by pooling their incomes together, so they can afford a better home.

As for the monthly pay, lenders have this 33/38 guideline. Your housing costs should not exceed 33 percent of your total monthly income (before taxes). When added to all your other consumer debts, should not exceed 38 percent. This 33-38 figure is called debt-to-income ratio.

Housing costs include mortgage payment, taxes, insurance, if any, and homeowners association fees, if any. Hence, for an income of $6,000 a month, housing cost should not exceed $1,980 given the 33 percent front ratio. Make sure your mortgage is below that too, as you have other payments to consider in housing costs.

As for consumer debt, this includes credit card balance, student loan, and other related debts. If you ever have car payment, that would take up much of your consumer debt. Going back to the $6,000 monthly gross salary, your consumer debt plus housing costs should be around $2,280, given the 38 percent back ratio.
The 33/38 debt-to-income ratio is only a guideline for lenders, not necessarily a rule. They can loosen up the figures if you give more down payment, or if you have good credit background. It also depends on what kind of loan program you choose. The 38 back ratio can even extend up to 41. On the other hand, if you only give a small down payment or have a less-than-likely credit report, lenders may be a little tight for you.

For your own safety, stay within this guideline. Take note that you’re not only paying debts with your monthly salary, you need to feed too. You also have leisure, recreation and other basic needs. If you have children, then you have more mouths to feed. Save yourself from sleepless nights by staying within your budget.

Friday, May 28, 2010

Affordable Tremblant Investment

Tremblant, meaning trembling mountain in French, has the reputation of a winter heavenly vacation spot. It is only more an hour drive from the City of Montreal, Canada. An all weather winter and summer resort, its ski facilities is world class. It has all year round swimming pools and golf courses.

Many dream of owning a piece of real estate property in this fantastic place. But the cost of properties here are sky high, considering that average cost of a vacation house here is US$ 1 million.

But Tremblant real estate men solved this high cost of real estate by means of the Condo-hotel scheme. This scheme involves the construction of high-rise luxury hotels, and have them operated by well – known hotel-chain operators like Westin, Carlton, Fairmont, Ritz and others. In this scheme, hotel structures are built like condominium units, unified into a hotel setup.

With this scheme, individual condo units are made available for sale with affordable prices. Though smacked in expensive areas, the cost per unit is reduced because of the multi-story concept. Furthermore- while the condo unit is vacant, when it’s not used by the owner, it can be rented out thru the hotel administrator; this is if the owner allows it. The fees charged are quite steep, but the condo unit will be maintained well and will have a good reputation and selling point. This will enable the owner to get a good resale price if he decides to sell it.

With the prevailing economic condition now, if one has extra money to invest, now is the time to dabble in real estate ventures, while the market prices are on the down side. Joseph Kennedy, the father of Pres. Kenned, made the bulk of his wealth by buying bargain real estate properties during the Great Depression period. When the good times came, his properties multiplied in value, several times over their acquisition costs.

Now, one could be a Tremblant property owner, a place where only multi-millionaires could afford.

Thursday, May 27, 2010

How to Compare Home Equity Loan Products

If you're looking to cash in on the equity in your home, you need to learn how to compare home equity loan products. There are a wide variety of such products out there, and you need to carefully look over all the different ones to be sure you're getting the best possible deal. You can save a ton of money by getting a good product. Your best bet is to go with a well known, reputable company that is offering low rates and good loan terms. You should also decide whether you want an outright lump sum loan or a line of credit. When you take out a home equity loan, you are borrowing money based on the amount of value you own in your home. This value is determined by the amount of your mortgage you've already paid off, as well as how much the market value of your home is. These two things will determine the amount of equity you have in your home, and it can be quite significant in some cases. That is why people usually take out home equity for large purchases, such as for funding college for a child or paying for a wedding. Home improvements are also a common reason for taking out these loans. To get the best terms and to be sure you won't get in over your head with payments, it is necessary to compare home equity loan options and companies. If you get a lump sum loan, you'll just get a check for the amount of equity you have in your home, then have to pay it back, just like a regular loan। If you opt for a line of credit, it will be like a credit card, where the credit is revolving. You'll spend a little, pay it off, and then have the money you paid back available for use again. When you compare home equity loan products, you'll see that many of them have differing interest rates and terms. While the rates and terms you'll qualify for will depend on your credit, you can still shop around a little and be sure that you're getting the best loan possible for your needs...and your wallet.

Monday, May 24, 2010

Realtors: Surviving in Tough Times

Real estate business is like a commodity retail store. To be successful or just to survive, an agent has to have plenty of varied stocks to sell. This is also true in real estate enterprises. A real estate agent must have many and varied listings of real estate properties for sale. A prospective customer will not look for other real estate agents to service him, if his agent has enough listings of real estate properties where the said buyer could choose from.

Of course, this is in addition to good personal relationship of the agent with the buyer- as a result of his reputation as a real estate man.

The agent must also be aware of the trends of real estate in the locality where he is specializing in. Are the demand and market prices going up or down? Thus, he could advice his buyer as to what moves and what kind of property the said buyer must consider. In this aspect, the agent must act not just as a salesman, but also, as a real estate professional whose advice is valued in this field.

Rental transactions play an important part of the industry that helps it to survive during hard times. These include leases and rentals of residential, business, agricultural and industrial warehouses.