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Real Estate Investment
Financing a home purchase is a complicated process, and even someone who is in good financial shape may have difficulty with the details. When financing a home purchase, you will need to find out how much you can afford to spend, get together a down payment for your home, and get financing for the rest. In order to be ready for the home buying process, you will need to take a number of important steps, as detailed below.
First, you should look into your credit rating. Your Fico score is an analysis of each of the major credit monitoring companies numbers, and can be found through a number of services, including myfico.com. Your credit score is based on the amount of outstanding debt you have, whether you regularly pay bill late, etc. Your credit score will determine how much money you can borrow, as well as what interest rate you will be able to get. If your credit score isn’t good, the current loan climate isn’t exactly friendly for finding a loan, so keep that in mind when beginning your home purchase.
Once you know your credit status, you need to figure out what you can afford. This means you should start using online calculators, as well as calling credit organizations to determine what they would be comfortable loaning you. As well, you need to ensure you have a down payment ready. While you can get financing from Freddie Mac or Fannie Mae if you aren’t able to raise enough capital, it is extremely hard to get a good rate these days without a fairly high down payment. As well, you will have to pay insurance on your loan to insulate the provider from potential failure to make payments. By agreeing to such a condition, you will likely be paying a decent amount of money toward insurance each month.
Once you have cash lined up, and an estimate of what you can afford, you are ready to start working on your home purchase. Finding the right home is another matter altogether, but in the current market, altogether easier than a few years ago. The important thing is not to stretch your finances too far, after all, that’s what got the country into the mortgage crisis in the first place.
Posted: September 10th, 2008 at 2:50 pm
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Posted in
Home Buyers
The recent downturn in the housing market has created a climate that buyers are increasingly taking advantage of. Home prices are hitting lows, and it seems as though the bottom may be nowhere in sight. While this means investing in real estate is an extremely dangerous short term proposition, anyone interested in a long term investment or a home for the first time can get exactly what they want for a whole lot less than they used to be able to find. Sellers, many of whom have been holding out, waiting for a rebound, are starting to realize that they will likely lose more by waiting than they will by selling now. That desperation has led a lot of sellers to make accommodations that even a year ago would not have happened.
While the housing bubble lead to a market where buyers were at a severe disadvantage, the buyer has now reclaimed the position of strength in negotiating a home sale. A home inspection with guarantees to replace parts is just the beginning; you can now get a myriad of inspections covering environmental concerns like radon and lead paint, as well as inspections of home infrastructure. You can get a lot more out of a home buyer when they are worried about whether the home they have invested so much into will be able to sell.
When negotiating a sale, look into any and everything you can get the seller to cover, anything about the house you want replaced. The home inspection process isn’t the only part of the sale where you can get serious concessions, these days most home sellers agree to pay closing costs up front in order to guarantee a home sale. Since these costs are substantial, this removes much of the upfront cost of a home purchase. Truly, there isn’t anything that is too far to ask for these days, but be careful, because if a home seller simply cannot meet a demand, you are going to prevent a purchase that may already be a great deal. What’s the lesson? In this market, it never hurts to see how far a seller will go.
Posted: September 10th, 2008 at 2:02 pm
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Posted in
Home Buyers,
Home Sellers,
Real Estate Investment
Finding the right person to do work on your new property or on a home you are about to sell is a complicated process. Finding a contractor is easy, there’s probably a couple dozen in your local phonebook, and even more if you look around online. Unfortunately, the large number of contractors means there are plenty who aren’t worth what they charge and whom you do not want to hire. The question becomes, how do you determine if a contractor is up to muster? One of the keys is meeting them beforehand to discuss the details of the project; this will give you the opportunity to see first hand if you are dealing with the kind of professional you want. But even before this, you might want to check out your hire, look into references, etc.
If you already have one or two specialists you trust, say for roofing or plumbing, you should start with them. Ask if they know anyone reliable, because their recommendations are going to be made on a much more professional basis than your neighbors. If you are hiring someone, you should look into references, which most contractors will provide if you ask. See some of their work, ask how the experience of their reference was, and you will get a better idea of whether you want them working on your property. You should also make sure you can easily get in touch with them at a storefront, and that they have a cell phone to stay in touch. Anyone without a physical address or a cell phone is sending out warning signs.
When you go to meet your contractor, watch out for a few other things. You want to make sure they drive a recent truck, kept in good repair. This may seem superficial, but a contractor’s truck is an important part of their business, and if their vehicle isn’t in good shape, it’s a bad sign about their business in general. They should take payment by check or charge, never hire a contractor on a cash basis, as this is unprofessional and a sign you are hiring someone unreliable and potentially unqualified. Finally, make sure your contractor is going to handle the permit process for any large repairs. There is a lot of paperwork involved, and it is required that such papers are filed with local authorities. If the contractor asks you to do it, or suggests not getting a permit at all, you should immediately start looking for someone else, you don’t want to work with someone who doesn’t want their work reviewed by an inspector.
By following these guidelines, you are much more likely to get a reliable and professional worker for your home improvement needs. That means your repairs will be of higher quality and last a long time, exactly what any home owner is looking for when making repairs.
Posted: August 12th, 2008 at 1:35 pm
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Posted in
Home Buyers,
Real Estate Investment
Investing in property is always a big decision, especially when the atmosphere surrounding the housing market is as gloomy as the one we have seen over the last year and a half. But just because the news reports are talking about a housing crisis, doesn’t mean there isn’t a silver lining. Housing prices have dropped to five year lows, down substantially from the peak just a few years ago. Suddenly the real estate market doesn’t sound so bad, does it? But there’s more, it turns out this isn’t so much a bad market as a bad time to be selling a home. That’s a good thing for those of us looking to invest.
Some may be leery of investing in real estate after the recent downturn, but the fact that so many homes are on the market and that interest rates are being kept at such low rates means that you are simply not going to find a better market for your investments. Consistently under 7%, interest rates are so low you’re even better off purchasing now than if prices continue dropping, since rates like these are guaranteed to go up soon! Of course that’s not all, the large number of homes on the market means you will get a better home for your price. Spend a little time looking around and you will realize that there are an increasing number of homes with great amenities dropping to lower prices, so your money will go a lot further than it used to.
If you want to play the foreclosed or short sale market, you can also get some great deals, but you may not need to with the rest of the market where it is, you’re going to get just as good an investment property for a bit more, one that will come with less of the risk and work involved in dealing with a foreclosure.
Real estate is consistently one of the best return investments available, so don’t listen to the hype, go out and look and you will realize its time to buy! There’s no reason not to start looking, all you need to do is contact a realtor and you’re on the road to investing in one of the most reliable and safe markets available.
Posted: August 12th, 2008 at 12:08 pm
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