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Refinance NOWbefore it’s too late
If you haven’t found the time to refinance your existing home mortgage, it’s time to take actionlike yesterday! Every time Alan Greenspan, Federal Reserve Board Chairman, opens his mouth, you can bet that the federal funds rates will rise by at least a quarter of a point, or by 25 basis points in investorese. What that means to you is that home mortgages will rocket as well.
A quarter of a percentage point may not seem like much, given that the federal funds rate currently stands at 2 per cent, but a reality check quickly reveals that you, personally, have probably never seen 2 per cent interest on anything in your lifetime. Take a look at your credit card statements. Are you paying 2 per cent on your credit? What about your home mortgage? Without getting technical, there’s little correlation between the federal funds rate and home mortgage rates except the direction in which they travel, and right now that direction is headed to the sky.
You’ve already missed the opportunity of a lifetime to lock in the lowest rates you’ll see for the foreseeable future, but you have a little more time to get your hands on relatively cheap money. The window of opportunity is rapidly closing, so if you’re going to refinance, you must do it as soon as possible.
Things you may not know about refinancing:
A small rate cut can pay off handsomely in smaller monthly mortgage payments.
Smaller monthly mortgage payments will decrease your tax deduction, because you will no longer be paying as much interest as you’ve been paying. Factor this in, because it’s the total savings that matters.
You can and should ask to have fees waived or reduced: application fees, origination fees, appraisal fees, legal fees, points, and closing costs.
If you don’t have cash on hand to pay fees, you can get them tacked on to the mortgage, paying nothing out of pocket for your refinanced home mortgage.
If you refinance and shorten the term of a home mortgage, you will pay a higher monthly payment, but you’ll save a significant amount of money over the term of the mortgage in addition to paying off your home and building equity faster.
Standard mortgage terms run 15 years or 30 years. If you’d prefer a term somewhere in between the standard terms, ask for a custom loan and designate a term that works better for you. Find a term that strikes a balance between a term shorter than 30 years and monthly payments lower than those of a 15-year mortgage.
If you cannot get a custom term, settle for a 30-year mortgage and pay more than the monthly payment to pay off the loan sooner. You must also negotiate no pre-payment penalty.
Where to go from here
1. Review your credit record with each of the three credit bureaus: Equifax, TransUnion and Experian. Mistakes are common in credit reports, and you may be surprised at what you find: accounts that do not belong to you, balances that do not match your statements, an identity mistake or worse. Correct any bad information.
2. Compare mortgage rates and fees online among several finance companies.
3. Use a good mortgage calculator. Using refinance calculators is the only way to determine which loan is the better all-around deal.
Work fast, but negotiate hard to make a deal that works for you. The loan company wants your business as badly as you want a better rate.
M J Plaster is a successful author who provides information on home loans and home equity loans. M J Plaster has been a commercial freelance writer for almost two decades, most recently specializing in home and garden, the low-carb lifestyle, investing, and anything that defines la dolce vita.
Last few months have witnessed phenomenal returns on real estate in Delhi and NCR and whole of India. Though currently Gurgaon is slowing down, with prices having come down by 20% in certain cases … still there is bullishness with caution. However, seemingly money is moving to Dwarka from Gurgaon.
With opening of Delhi metro line to Secretariat and Connaught Place almost a certainty, Connaught place has seen jump of 20 to 40% in capital and rental values. Inner circle showroom space rents at unheard Rs. 450 to 500/- per Sq. Ft., with showrooms space is in scarce supply. This positive sentiment due to Metro opening is pushing up demand in Dwarka and prices.
Where does one invest? Put in his money?
Answer to this is not easy. But it is still possible to find investment opportunities. Read on to know more.
To identify parameters for safe investment were difficult. Finally it boiled down to the question… if I invest my money in Real Estate anywhere, will a possible crash or bearish sentiment in Real Estate erode my real estate investment?
This meant, buying property at prices which in equity market parlance is called “value buy”. Rock bottom prices. Choice was between a developed property or land. Developed property has the advantage of finding a tenant so as some return on investment is there. But then, in developed property, you pay for the developer’s profit. Bearish sentiment can erode values in such investments considerably.
Land seemed to be safer. But what about a recurring return - monthly or annual from the land? This set me on to the exercise that if I had 1 (one) Crore rupees, then what shall I do?
This quest led me out of of Delhi and finally, in Rajasthan, within 100 Kms from International airport, I located large tracts of fertile agricultural land with sweet water in the range of Rs. 2 to 3 Lakhs per acre (including acquisition cost of stamp duty plus brokerage). Undulating land, with few hills around, lake etc.
It is possible that the land prices will not appreciate so quickly and the holding may exceed few years. Could I then earn recurring revenues? Answer was a simple and emphatic Yes. Investigation showed that multiple sources of revenue are possible.
Simplest is leasing the land for one year to the local farmer who pays you either in kind or cash. About 6-8 % annual return on the investment is possible. Fear here is that such lease creates a right for the farmer. But this is not true. Each third year, a new farmer can be found and land leased to. This is not difficult, and is done quite often.
Even better returns are possible, if herbal farming is done. Safed Muesli shows tremendous potential though there are negative reports that it did not work for the few who tried. But there are many, for whom it has worked. When properly done and marketed, it can generate upto Rs. 2 Lakhs per acre of profit in one year. Profits from first year itself possible.
Another possibility is growing the bio-diesel plantation. As per Govt. notification, in few years time it will become mandatory for a 5% mix of bio-diesel with diesel. Yes … the bio-diesel is in short supply. Consistent revenues of Rs. 15 to Rs. 35 thousand per acre per year with minimal caretaking.
Then many other possibilities … growing carnations, poultry, exotic vegetables, open a resort, conference center etc. Rajasthan govt. fairly co-operative on this.
Finally, the big bang is possible. Expansion of urban areas can push up dramatically the land valuations. In any case, large tracts of land give a high level of well being factor to oneself and the family.
http://www.swagatamindia.com
Sheikh Pervez Hameed is a realtor since 1989, has ground knowledge of the real estate market of Delhi and its surroundings.
During the home buying process, you’ll hear the term “appraisal”
mentioned at some point.
Chances are, you already have a general idea what this term
means. But when it comes to mortgages and home buying, you need
to know exactly what an appraisal involves and how it affects
you.
First, a definition:
Appraisal — A professional appraiser’s estimate of the
market value of a property. Appraisals take into account the
local market conditions and the characteristics of a property.
They are required by most lenders.
In other words, the appraisal is the lender’s way of determining
a realistic market value of your future home. The lender uses
the appraisal to ensure that the home is actually worth the
price you’ve agreed to pay.
In the unfortunate event that you can’t pay your mortgage, the
bank will foreclose on the home and resell it. Not a nice
thought — but it’s reality. The appraisal is how the lender
protects its own financial interests.
Generally, you’ll have little control over the appraisal process
and won’t even be present for it. Chances are, your lender will
arrange the appraisal, and the house will either appraise at the
asking price or not. Hopefully the former.
If the home appraises for less than the asking price, you have
two options. You can come up with the difference, or the seller
can reduce the asking price to match the appraisal.
Also keep in mind that an appraisal is not a home inspection. A
home inspection is something you should obtain to protect your
investment. An appraisal is the appraiser’s opinion about the
value of your prospective home. But that’s it. Appraisers will
not test the functionality of appliances, inspect the roof, or
perform other tasks a home inspector would do.
* Copyright 2006, Brandon Cornett. You may republish this
article in its entirety, provided you leave the byline, author’s
note and website hyperlink intact.
According to the Federal Reserve, Americans carry around $5,800 in credit card debt from month to month. Making the minimum monthly payment on that debt would take 30 years to pay off, and include an additional $15,000 in interest. According to the Administrative Office of the Courts, 2,078,415 bankruptcies were filed in 2005–the largest number of bankruptcy petitions in the history of the federal courts. With the new tougher bankruptcy laws, people are looking for alternative ways of managing their debts.
Debt consolidation loans are a popular way for people to free up money each month by consolidating several monthly credit card payments into a single lower interest loan. But, the question is whether it’s best to consolidate those debts into a home equity loan or an unsecured debt consolidation loan.
Debt Consolidation Home Equity Loans
A home equity loan is a one-time lump sum of money you receive in the form of a second mortgage that is secured by the equity in your home. Equity is the difference between how much the home is worth and how much altogether you own on it.
A second mortgage loan is usually a fixed interest loan with rates that runs slightly higher than those of a first mortgage loan, unless it’s a 125% Loan To Value (LTV) loan that allows homeowners to borrow beyond the value of their homes. Those rates usually run much higher that other second mortgages and origination fees can be as much as 10% of the loan balance.
Home equity loans usually are repaid in a shorter time than first mortgages, with repayment periods typically being between 5 and 20 years. Like a first mortgage, you have to pay off the balance of a home equity loan when you sell your home, so it’s best to find out if there are any prepayment penalties or balloon payments on your loan in case you decide to pay the loan early or sell your house before the loan matures.
Benefits and Drawbacks of Home Equity Loans
The main benefit of a debt consolidation home equity loan is that most states allow you to deduct up to 100% of the interest you pay on your taxes. Other benefits include the fact that home equity loans typically have a lower interest rate than unsecured loans, and borrowers can get relatively large amounts of money.
While home equity loans have attractive benefits, there are also major drawbacks. One is that if you fail to meet the payment schedule required by the loan, the lender can foreclose on your home and you will lose it even if you go into bankruptcy. Secured loans are not dischargeable by Chapter 7 bankruptcy.
Another major drawback is that exploitative lenders target homeowners, especially those with low incomes or poor credit. According to the Federal Trade Commission (FTC), there are many predatory scams, including:
Equity Stripping: The loan is based on the equity in your home, not on your ability to repay it.
Credit Insurance Packing: The lender adds credit insurance to your loan, which you may not need.
Bait and Switch: The lender offers one set of loan terms when you apply, then pressures you into higher charges when you sign to complete the transaction.
Deceptive Loan Servicing: The lender doesn’t provide you with accurate or complete account statements and payoff figures. That makes it nearly impossible for you to determine how much you’ve paid and how much you owe.
If you are not sure whether a home equity loan is right for your needs, you may want to consider an unsecured personal debt consolidation loan.
Personal Unsecured Debt Consolidation Loan
If your credit is relatively good, and you are employed, you may be able to obtain an unsecured personal loan to pay off some or all of your high-interest credit card debts. With a personal unsecured debt consolidation loan, there is no collateral against the loan. This means that the lender is relying only on your promise to repay the loan according to the loan’s terms and conditions. While the loan amounts are not as much as those of debt consolidation home equity loans, they can amount up to $10,000. Loans up to $1,000 may not even require a credit check.
When shopping for a personal unsecured debt consolidation loan, it is important to shop around for the best rates and loan terms. Unsecured debt consolidation loans have lower interest rates than credit cards, but they generally have higher interest rates than secured personal loans like home equity loans. Some loans allow you to take anywhere from one to five years to repay, which can ease financial stress.
Benefits and Drawbacks of Personal Unsecured Debt Consolidation Loans
The main benefit of getting an unsecured debt consolidation loan is that if you are forced into bankruptcy, the unsecured debt may be discharged in the bankruptcy proceedings.
The main drawback is that you must have good to excellent credit to get an unsecured debt consolidation loan, and the loan amounts are typically less than a home equity loan. The interest rates on unsecured debt consolidation loans are typically much higher than that of a home equity loan, and it is not unusual for a debt consolidator to obtain a commission of 10% or more on your new loan.
In Conclusion
The answer to the question of whether you should get a debt consolidation home equity loan or unsecured personal loan all depends on your financial circumstances. If you have relatively good credit, are employed and only a few debts you need to consolidate, you may benefit from getting an unsecured personal loan. However, if your credit is not so good or you have a lot of debts, a home equity loan may your best answer.
Maria Ny is an experienced free-lance writer from San Diego, California. She writes articles covering a broad range of subjects ranging from Bankruptcy Reform, Credit Repair to mortgage refinancing. Check out her informative articles at http://www.bdnationwidemortgage.com/
To learn more about home equity loans and debt consolidation online please visit the loan resource center at http://www.bdnationwidemortgage.com/home-equity-loan.html
First a little story about buying investment property.
My wife and I stayed at a motel in Tucson for a week one winter. Our bill was for twice what it should have been, but since I already paid the correct amount in cash, I thought nothing of it. During our stay, we noticed that the lobby and swimming pool were unheated, and passed it off as frugality. A year later, however, when I read a news story about a new owner struggling to make the motel work, I realized what was really going on.
To prepare the motel for sale, the owner had been using the two most basic ways to inflate the appraised value: decrease expenses and increase reported income. Stopping repairs, turning down the heat, and quietly adding $100 in income to the books every day, might have increased the net income for the year by $45,000 more. With a .08 capitalization rate, that means the appraisal would come in $562,000 higher than it should have. Imagine the the poor guy who overpaid!
To avoid a mistake like this when buying investment property, you need to watch for tricks like these. You also need to understand the basics of appraising income property.
Valuation of income properties start with the capitalization rate, or “cap rate.” When investors in an area expect a return of 8% on assets, the cap rate is .08. The net income before debt service is divided by this to arrive at the value of a property. This is expleained further in another article, but the primary point to remember is that every dollar of extra income shown will increase the appraised value by $12.50 with a cap rate of .08 (Or, for example, by $10, if the cap rate is .10).
Avoid Dirty Tricks When Buying Investment Property
When sellers of income properties increase the net income by honest means, the property should sell for more. However, there are many dishonest ways, both legal and fraudulent, that are sometimes used. Sellers of houses may cover foundation cracks with plaster, but the tricks used by sellers of income properties aren’t about appearance. These tricks are about income and expenses.
One way income can be inflated, is by showing you the “pro forma,” or projected income, instead of the actual rents collected. Demand the actual figures, and check to see that none of the apartments listed as occupied are actually vacant. See if any of the income is from one time events, like the sale of something.
The income from vending machines is a gray area. Many smart investors subtract this from the net income before applying the cap rate, then add back the value of the machines themselves. For example, if laundry machines make $6,000, that would add $75,000 to the appraised value (.08 cap rate), if you included it. However, since they are easily replaceable, adding the $10,000 replacement cost instead makes more sense.
The other important tricks sellers play involve hiding expenses. These can include paying for repairs off the books, or just avoiding necessary repairs for a year. This can dramatically increase the net income, meaning you pay more for the property. It also means you have less income than expected, and deferred maintenance to catch up on.
Ask for an accounting of all expenditures. If a number in an expense category is suspicious, replace it with your own best guess. Then re-figure the net income.
Look at each of the following, verifying the figures as much as possible, and substituting your own guesses if they are too suspect: vacancy rates, advertising, cleaning, maintenance, repairs, management fees, supplies, taxes, insurance, utilities, commissions, legal fees and any other expenses. Do your homework, and avoid seller’s tricks when buying investment property.
Steve Gillman has invested in real estate for years. To learn more, get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for $17,500, visit www.HousesUnderFiftyThousand.com
If you are looking at buying a new house, or considering refinancing your current dwelling, you probably have a number of questions. One of the common questions involves mortgage banker terminology. One of these terms is “points”. You are often given the option of whether or not you want to pay “points” on your loan.
At first glance, you may immediately decide you do not want to pay points, as your initial down payment will be higher. However, once you understand what a point is, you may want to reconsider your first impression.
A point is 1% of the total loan amount, and paying a point will reduce your interest rate throughout the entire life of your loan. This will save you money throughout the whole time you have your mortgage. In other words, you can either pay a point now, or pay that amount plus the interest on it later. Either way, you will pay eventually.
Before deciding whether or not to pay points on your mortgage, ask yourself how long you plan to stay in your house. If you are planning to move or refinance within the next four or five years, you may not save any money by paying points. If you are going to live in your house for a long time (and not refinance), points are most likely a good option for you.
When comparing rates from different lenders, be careful to look closely at exactly what rates you are getting, and how many points you have to pay to get those rates. Choose wisely based on how much money you have, how long you plan to stay in your house, and how much interest you want to pay long-term.
Casey Smith has worked for years in the mortgage industry, and often writes for the popular website http://www.mortgage-refinancing-online-guide.com
Congratulations! You’ve just inked a deal to purchase a home. Wake County is a terrific place to live…great schools, cultural amenities, state government nearby, easy access to the beaches and mountains, etc. However, the seller is very nervous as he eagerly waits to see if you can finance the deal. Of special note, he is pressed for time and has given you just 72 hours to seal the deal. What should you do? For starters, you must do some serious research. Yes, from the comfort of your computer you can and must uncover a wealth of information to find a local lender fast. Let’s see how you can hasten the process without getting burned.
Every single day new information is being added to the internet. Because so many companies realize the internet’s importance, just about everyone has a web site. This can be good for you as it allows you to find accurate information quickly and painlessly.
Searching for mortgage companies in Wake County is as easy as a couple of clicks of your mouse. Yes, you could head over to the yellow pages, but remember this: your phone book is revised annually while updates to the internet are made all of the time.
I am not endorsing any particular sites; rather I am listing sample sites to help you find local mortgage lenders. A few of your results may yield national companies but plenty of Wake County mortgage providers are listed.
Eloan - Enter all of your information with Eloan and you will receive an answer from them in as little as 90 seconds! Once you are approved, you can then finish your application.
Lending Tree - Enter all of your personal information and Lending Tree will share with you four companies who will be interested in having you submit an application to them. You get to select a provider, but you do not make a commitment until you are approved and have decided to enter into a contract with them.
Quicken Loans - You can get approved within minutes through this particular lender and they have a simple to fill out mortgage application. You can usually close within weeks of approval.
Wells Fargo - This national lender claims: “In person, by phone, or via email, we’re ready to serve your home financing needs. A home mortgage consultant will gladly contact you, or you can visit and call any of our 2,000 locations nationwide.” Of course, a provider of this stature must be competitive too. Don’t be enamored by the sales spin; if you can find a lower rate with a similar level of service than go for it!
So, keep your seller happy and start exploring your options right now. Are there other online sources available? Yes! To find area companies google a search for “Wake County mortgage companies” and see who shows up in the results. As always, the choice of a lending provider lies strictly with you; start searching for qualified Wake County mortgage companies today.
Copyright 2005 — Matthew Keegan is The Article Writer who writes on a variety of topics including: advocacy, automobiles, aviation, business, Christian themes, family, news, product reviews, travel, writing, and more. Samples from his portfolio are available right online.