Monthly Archives: August 2020

Should I Buy That Two – Family House?

Some people purchase a two – family house, because, they hope to live, in one apartment, and rent the other, in order to significantly reduce their cost of living! While, this is a great solution, for some, it is not for everyone. For some, they need more privacy, and/ or, don’t want the responsibilities involved, in being a landlord. Other individuals purchase two – family houses, for investment purposes, and it’s essential and important, to begin this process, with your eyes – wide – open, understanding, both the advantages and disadvantages. While, a well – considered, properly priced, property, may be a fantastic investment opportunity, there are some others, that may not be, for certain reasons. With that in mind, this article will attempt to consider, examine, review, and discuss, these two scenarios, and the process, one should go through, prior to making the commitment.

1. Owner – occupied: An owner – occupied, two – family house, is eligible, for very similar mortgage conditions, and requirements, as a single – family home. Often, this is about 0.5% or more, lower rate, than when the owner does not live there. What rate of returns, and other relevant concerns, should be considered? Begin, with considering, cash – flow, meaning, the owner’s outflow, versus, the rent, collected, How will this compare, with your costs, if you purchased a single – family home? How comfortable will you be, being a landlord? Are you handy, or will you need, to hire others, whenever there is a necessary repair, etc? Do you have the type of personality, which might handle, some of the inherent stresses and strains, involved? Will you be happy, sharing the property, ensuring your tenant, takes decent care of the part, they occupy, and any potential challenges, in terms of privacy, and other issues?

2. Non – owner occupied: Begin, with a realistic evaluation, and analysis, of the revenues, versus expenditures. Will you generate sufficient cash flow, to avoid having additional financial challenges, and stresses? Unless, you are convinced, there will be a cash flow – positive, situation, you usually should avoid the investment. Consider only about 75% of the realistic rent – roll, in order to account for vacancies, and other unforeseen contingencies. On the expense side, add your mortgage payment (including principal, interest, real estate taxes, and escrow), to your monthly contributions in various reserve finds, for repairs, renovations, upgrades, etc. If this is positive, then move – on, to a rate – of – return, or ROI/ return on investment, analysis. Consider your total cost of purchasing the property (purchase price plus initial renovations/ upgrades/ repairs), and your annual rent – rolls. Seek at least a 6% return.

An investment property may be your smartest move, or a risky, unwise one! Take these easy steps, from the unset, and proceed accordingly.

Calendar Considerations When Buying A Home

Most markets are cyclical in nature. In practical terms, this means there are periods where the market in question is very busy and periods where it is very slow. Many people are surprised to learn this also applies to the real estate market.

Buying a home in a seller’s market is tough. In contrast, buying during a slow market is an incredible opportunity. You have a chance to get in at or near the bottom floor of prices. If you can keep focused on the future, you can really make a killing. Yes, you might see the value of the home drop a bit more, but the key is to focus on 2010 and beyond. That may seem a long way away, but the real estate market will bounce back and have returned to typical highs by then. This is where millionaires will be made.

Since you’ve seen the cyclical nature of a sellers’ market versus a buyers’ market, you can see the power of buying or selling during each of these markets. Well, the good news is there are actually busy and slow times within each calendar year.

Nearly every real estate market can be timed year after year. A classical perfect time to buy is during the winter holidays. Why? Well, think about it. How many people are out looking for homes around Christmas or New Years Eve? Not many. This creates an artificial buyers’ market because the number of buyers interested in purchasing a home is greatly reduced. This period usually lasts from November through February.

Given the rather cold nature of winter, it is hardly surprising to learn that the real estate market is slow during the winter months. You might be surprised to learn that the same is true when things heat up. Specifically, the real estate market tends to cool off from July to August. Why is this? Well, families tend to head off on vacations and get caught up in dealing with the kids. There is little time to house hunt and real estate markets tend to slow down, which makes them prime buying time.

Location may be the number one rule for real estate, but knowing when to buy is important as well. It can make the difference between getting a great deal and buyer’s remorse.

Should I Buy a Home In 2008?

Dreadful information about the slumping American housing market is all over TV news and in almost every paper. During this housing slump many potential first time home buyers often wonder, should i buy a house in 2008? While every persons situation is different the next few paragraphs will hopefully help you decide whether or not to buy a house in 2008

It is a fact that property values across north America have dropped, in some areas they have dropped drastically and others its just a slight dip. Buying a home when prices are at the lowest is the best way for buyers to get the most for their money, and many people are now taking advantage of the lower home prices.

The major factor for most people when buying a home is securing a affordable mortgage to purchase the home with. In today’s current market mortgage rates have also fallen to very low levels making financing a new home more affordable then one year ago. When low mortgage rates are combined with reduced asking prices your money suddenly is able to buy you much more home then you previously thought possible!

The only real roadblock to buying a home in 2008 is going to be actually qualifying for a mortgage. Even though mortgage rates are low the lenders have tightened up their lending guidelines since the housing slump began. Since many borrowers need 100% financing it makes things that much more difficult. To deal with stricter lending guidelines borrowers are going to need excellent credit or have down payments in the range of five to twenty percent to secure home financing.

With property values falling and mortgage rates at very low levels 2008 is a great time to buy a new home. Not only is there more selection on the market but you will also be buying when prices are low so when the next real estate boom starts you will make substantial money on your investment.

House Buyer’s Guide

Question: Where can you find a good house buyers guide? Answer: At your very fingertips. Before the advent of the Internet’s World Wide Web, specialized real estate magazines and the yellow pages of the telephone directory were handy tools for house buyers. Even now that the internet is more popular, you can still refer to those because they are not yet extinct and they are even more relevant to your needs, especially for information from those local publications that could direct you to what properties are up for sale and the corresponding terms for each one that are locally available from which you could choose.

If you are computer savvy, Internet technology is, of course, an even handier tool for you through which you could find a good house buyers guide. There are search engines that could open informative Websites featuring simply written house buyers guides for you. Some websites even make the effort of featuring the different local government-imposed real estate laws and taxes distinctively in effect in every state, and you can narrow down your surfing to just those things that concern you. Knowing how to surf and using the Web search engines effectively could save you not only on legwork and precious time, but also on your time online.

From wherever source you have available to you or which you prefer to use, a good house buyers guide should give you all the information you need — but for it to be a truly effective tool, you should first make a comprehensive list of your questions. First in your list for consideration should be how much could you afford. After defining how much you have set aside for a down payment, work on your net income. Make a clear-cut list of your income and expenses; do not forget to include the taxes you pay annually, and the self-imposed ten percent savings in the bank for contingent expenses. Look out for owner financing schemes that may be available to you, too.

Get the bottom line figure and that would spell to you what you actually have and could spend for this major project. This figure will tell you what kind of a house you could afford to buy, so you would not go overboard and buy something that is utterly beautiful and tasteful but also utterly out of your reach. This figure will define your lifestyle during the amortization period and until the deal is sealed (fully paid).

This financial consideration, among others in your long list of questions, will be answered for you by a good house buyers guide. It will give you a more realistic view of the project that will help you in your decision-making.

Rules To Help You Succeed When Buying A Home

Get your funding before you get your property. There are very few things in life as discouraging as losing out on the house of your dreams because of not being able to secure financing. Although the drive to go out there and hunt for that great house is easy to understand, it is crucial to set up the funding you will need before you begin looking for a house.

Getting the funding in advance has several important benefits, such as being aware of how much you can buy and earning a lot more respect from the listing agents. By understanding how much house you really can afford before you decide to shop, you will avoid wasting your time and energy looking at expensive houses, and the real estate agent will be more than happy to show you the properties within your budget.

It is also essential to take a good look at the different mortgages in the marketplace before getting started with the house shopping process. Nowadays, home loans are available in far more options than the standard 15 or 30 year. Because of this, prospective house buyers need to comprehend how each kind of house loan works, and also to determine which mortgage loan is the ideal option for their needs.

Look at the neighborhood, not just the property. It is a great idea to have a look at the whole area, rather than concentrating on a single house. This is usually a particularly significant thing to think about for anyone moving to a new urban area, because these potential buyers will likely be unfamiliar with the local environment and lifestyle. It is vital to figure out the parts of town that are most appealing, and also to look at things like distance from work and local shopping opportunities.

We have all heard that location is key considering when it comes to real estate, and that is exactly the case. Purchasing a property in the wrong place could be a huge mistake, and you should choose the area along with the house. Possible buyers can learn a whole lot about the nature of the different neighborhoods merely by driving around town, and also by speaking to other locals.

Be reasonable with your initial offer. Looking to low-ball a seller on the very first offer can backfire, as can spending too much. It is essential to thoroughly evaluate the local marketplace, and to compare the selling price of the property with what identical properties in the area have sold for. Comparing the sales of similar properties, what are called “comps” in the business, is probably the best way to figure out what is fair, and to make certain that you neither pay too much or underbid on the property.

Always get a home inspection. Always check out the property for any possible problems prior to making an offer. Compared to the price of the standard house, the cost of a good property inspection is practically negligible. Therefore, get a good property inspection performed before you purchase. To get the best house inspector, it is a great idea to get word of mouth referrals as most of the best home inspectors depend on word of mouth marketing.

Also try not to alienate the sellers of the house. Several real estate deals have fallen apart because of the personal animosity of the buyer and the seller. It is very important to avoid offending the seller of the property during the process, and to avoid nitpicking every small detail during the sale. Keeping the good will of the seller will help the deal go smoothly, and will also provide the best atmosphere for seller and buyer alike.

Bankruptcy and Buying a Home – 3 Benefits to Buying a Home After Bankruptcy

If you have filed bankruptcy recently, you may wonder if you can get approved for a home loan. You may also wonder if buying a home after a recent bankruptcy is a good idea for you.

While a bankruptcy can make getting approved for a mortgage loan more difficult, it is still possible to get approved for a mortgage loan. In fact, there are more and more bad credit loan programs coming out all the time. Subprime lenders are focusing more on helping individuals with poor credit achieve home ownership. This is happening mostly because bankruptcies are still on the rise and there is an increasing number of people with bad credit who are looking for home financing.

Here are some reasons to consider home ownership after a bankruptcy:

1. Increase Your Credit Score – When you make your payments regularly, you improve your credit rating. Once your pre-payment penalty period is over, you should be able to refinance your mortgage loan for a much lower interest rate. After your bankruptcy has been discharged for over 2-3 years, you should have a much easier time qualifying for a lower interest rate mortgage loan.

2. Accrue Equity In Your Home – If you are just making rent payments, you are throwing your monthly payments away. When you own a home, over time, home values increase and you are working toward owning an asset.

3. Take Out An Equity Loan To Consolidate Debt or Get Needed Extra Cash – Once you have bought your house, as soon as 6 months or so later, you might be able to take out an equity loan on your home and consolidate any other debt that you might have since your bankruptcy or debt that could not be included in your bankruptcy. Taxes and student loans will not be discharged in a bankruptcy. You may also want to use the extra cash to invest in a business venture or for needed home improvement.

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