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Keep Your Closing Costs Low

Closing costs can surprise many homeowners if they aren’t prepared for them and can seriously deplete savings at a time when most people need money the most.  It seems that lenders are constantly finding new and creative ways to tack on a few dollars here, and a few dollars there to the tune of thousands.  However, by taking a few simple steps you can keep your closing costs low and know when to tell your lender that enough is enough!

First, you should always be a savvy consumer when it comes to title work.  You have the right to select any title company you want and not the one that the mortgage company wants to force upon you.  Of course, the mortgage company they want you to use always turns out to be one of the more expensive ones (because they are getting kickback fees).  Shop around for a title work company and you can often save 30% right off the bat, and if you are willing to really work at it, save upwards of 50%.  It’s not chump change either – a title company can easily charge $1,200 for basic title services.

Next, be on the lookout for junk fees.  Lenders love to pile on the document preparation fees, interest locking fees and anything else they can think of.  Often times they throw these fees onto mortgages that have no points attached to them.  Make sure that you ask your lender for a full disclosure of all the fees and then ask them about any that seem out of line.  If you aren’t happy with what they quote you, tell them you are looking around at other lenders.  The last thing a lender wants to do is lose 30 years worth of interest because of a $200 junk fee!

If you aren’t going to be in the house for more than a few years, ask the seller to pay the closing costs.  Sure, you’ll end up paying a higher interest rate, but if you plan on moving in a few years then the cost of the interest won’t match the closing costs you would have to pay up front.  Plus, you pay the extra interest off is small chunks each month rather than being out a lot of money up front. 

Watch out for lenders who try to sell you add-on products with your mortgage.  They love to try to get you to buy credit insurance (a total waste of money) and some lenders even try to sell you services such as “plumbing protection” or “whole house appliance protection”.  Just say no!

Remember, you have the power to say no thanks at any time before you sign on the dotted line.  If you don’t like the figures your lender is talking about for closing costs, shop around – in fact, you should around and get several mortgage offers before you even consider one.  Don’t be afraid to get up and walk away from the table.  After all, it’s your money – don’t let a greedy lender try to squeeze another $1000 out of you when you have enough stress taking place buying a home in the first place!

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What You Should Know About Interest Rates

For all people shop around for the best rate, there are few who have taken the time to sit down and add it all up. After all, why would you bother? The answer is that understanding just how interest rates work can help you see how important small differences in rates and payment amounts can be.

Interest Rates are Compound.

It is important to remember that what you owe is compounded – that means you pay interest on the interest you owe from the month before. That means that if you’re paying 2% per month in interest, you’re not paying 24% per year – you’re actually paying 26.82%. Charging interest monthly instead of yearly is a trick to make it feel like you are paying a very low price for your borrowing.

A Thought Experiment.

Here’s a question: would you rather have $1 million, or $10,000 in a savings account earning 20% per year in compound interest?

Well, let’s see how that $10,000 would grow. After 10 years: $61,917. 20 years: $383,375. 30 years: $2,373,763. 40 years: $91,004,381. 50 years: $563,475,143.

So after fifty years, you’d have over $500 million?! Well, not so fast. Of course, you have to take inflation into account – if we say inflation is 5%, then that money would have the buying power that $10,732,859 does today. Still, that’s not a bad return on your investment of $10,000, is it?

That’s the power of compound interest, and the way the credit card companies make their money (it’s also the way pensions work, and the reason the prices of things seem to rise massively as you get older). Be very, very afraid of compound interest. Or, of course, you could start saving, and be very glad of it…

Compound Interest Adds Up.

Let’s work through an example on a more real kind of scale. Let’s say you have an average unpaid balance of $1,000 on a card at 15% APR.

You will owe $150 in interest for the first year you borrow. However, this amount is then added onto the balance, and interest is charged on that. The second year, you’d owe another $172.50, for a total of $1322.50. It goes on, with totals like this: $1,520.88, $1,749, $2,011.35.

After just five years at 15%, you’d owe double what you borrowed. And after 10 years, you’d owe four times what you borrowed! Bet you weren’t expecting that. If you let something like that carry on for long enough, you’ll end up paying back that credit card for years afterwards, paying back what you borrowed many times over and still not clearing the debt. Most people don’t work this out, and feel that the payments must simply be their fault for spending too much money to begin with.

One Percent of Difference.

One more thing. You might think there’s not that much difference between a card that charges 15% APR and one that charges 12% APR. Let’s see the difference the lower rate would make to that $1,000 borrowed for five years. Remember, after five years at 15%, you owed $2,011.35.

At 12%: $1120, $1254.40, $1404.93, $1573.52… $1762.34 after five years. So you’ve saved $249.01 from that 3% difference in APR – in other words, you’ve paid almost 25% less interest.

Wireless Alarms For Your Driveway

Those of you who want to protect your home from possible annoyances and intrusions, never miss out on a home delivery, or always be aware of someone coming up your driveway – should invest in a wireless driveway alarm.  There are a variety of different styles, with each one offering you a truly unique and innovative way to keep up with what’s going on around your property.

You can get either wireless or handheld models, which vary in detection ranges, from the average 1,000 feet for small driveways to the larger driveways which span 2 miles or more.  Some models will warn you of visitors with tones, while others use prerecorded messages.  The more advanced models on the other hand, well you communicate with visitors through the use of an intercom system, which you install at the end of your driveway.

All types of wireless driveway alarms feature a receiver and a transmitter.  Any presence in your driveway is detected by the transmitter, normally through infrared equipment, which notifies you through the receiver.  Most models will allow you to speak through the receiver, transmitting your voice through the transmitter.  If a solicitor or burglary is trying to visit your home, your voice is normally all it takes to turn them around in the other direction.

Even though the technical name is “wireless driveway alarm”, there are several uses for this technology.  You can install the equipment in your yard, out of plain view, or even use the system as an intercom for anyone who pulls up to your gate.  You can also install the system on your roof, or just use it strategically around your property.  There are several uses for wireless systems, although the intention is to alert you when there is any type of human presence or movement on your property.

When you set up your wireless driveway system, you should always place it somewhere where it isn’t easy to see.  You don’t want someone who visits your property to have plain view of your equipment, as it can easily give you away.  Instead, you want to make sure that you are alert of any visitors, yet they aren’t aware that you are using any type of alarms.

Depending on how much money you have to spend, the systems that you can choose from will vary.  There are simple wireless driveway alarms out there, yet there are also systems that can do just about anything you want.  If you live in a suburban area, you may want to go with a standard wireless alarm.  Standard alarms are best for this type of neighborhood, as they are easy to install and will immediately alert you whenever there is presence on your property.  Another great thing about these types of systems is the fact that you can act immediately without having to physically be in touch with the receiver.

All in all, wireless driveway alarms are a great security measure for anyone who owns a home and wants to protect themselves from unwanted visitors.  You can get a slew of features as well, depending on the type of alarm that you select.  You can install most alarms yourself, although the more advanced models will require professional installation.  The self installation types will come with instructions as well, so you won’t encounter any problems.  Even if you’ve never used them before – wireless driveway alarms are a great investment that will alert you anytime someone decides to visit your property.

Great Lease Purchase Strategy – The Assignment

The assignment is by far the easiest of the Lease Purchase strategies and requires the least amount of investment and risk in order to do the deal and profit upfront. Instead of taking the property and subletting with an option or sandwich leasing you can actually sell the contract to another. You have created a valuable marketable commodity! You can sell and even create a note by financing the sale of the lease purchase agreement, too.

An assignment is when we negotiate the deal with the owner of a property and it contains all the terms of the transaction within the specialized written contract. We can then assign (which means to sell) the contract to a third-party. This can be either the Tenant/Buyer or another investor. This is normally a lease purchase agreement which contains a specific assignment clause with the right to sublet, transfer or convey any rights within the original contract with the owner to another principal party.

Example: I found a property in a good neighborhood/school district. The owner had tried to sell it, had put up a for rent sign since he’d be moving to a new state and didn’t want to get stuck with two mortgage payments. The property was worth $100,000 and the seller had a mortgage for $95,000. His payments were $1000 per month PITI (principal, interest, taxes, insurance). The real estate agents wouldn’t list the home because there was not enough profit to pay a 6% commission. I offered to lease purchase the home with the right to assign and purchase for the balance of the mortgage. I would also pay the $1000 per month with a five-year contract and would be responsible for any monthly maintenance/repairs under $100. I would pay $1000 down as option money and the first month rent with a 20 day lead before payments were to begin.

The owner agreed and I began calling  all my tenant/buyers from previous ads. One tenant/buyer (with kids) had just files a bankruptcy, but was looking for a home in a good school district and safe neighborhood. He knew that he would need at least 2 years before he would be able to get a new mortgage and save the down payment. He was perfect for this home. I told him he could move into the home, purchase it for the balance of the mortgage and that I will sell him the contract (assignment) for $6500. He only had $3500, but he really wanted the home. I told him that I would take the balance of the assignment fee as a personal note (unsecured) at 0% if he paid on the first of the month. He could pay me $250 per month and pay off the note in 12 months. He agreed. I recovered my $1000, made a $5500 profit ($3500 cash and a $3000 note) and I was out of the deal. Assignments are great for flipping homes without buying them. As usual, everyone wins in a lease purchase.

Using an Agent to Sell your Home

Using a real estate agent to sell your home is something that you will most definitely want to consider. Your only other option is to sell your home by owner, and in most cases this is very hard to do. So when it comes down to it, hiring a real estate agent is the best way to go for the majority of people who are looking to sell their home. If you do not know anything about hiring a real estate agent there is nothing to worry about. Even if you have never gone through this process before you should not have a hard time getting started.

 

The first step to hiring a real estate agent is to get in touch with the company that you are interested in doing business with. They will then be able to direct you to a real estate agent in your area, who can in turn tell you everything you need to know about selling your home. While you are talking to the real estate agent let them know what you are looking for out of your home, and what type of time frame you have in mind. Of course, there are no guarantees but an agent will at least be able to give you some advice.

 

When you finally hire a real estate agent it is their job to do whatever they can to sell your home. They will do everything from listing your home in the newspaper to holding open houses. The fact of the matter is that a real estate agent does not get paid unless they sell your home. So if you are worried that a real estate agent may be slacking off you can put that out of your mind. They know that if they do not sell any homes that they do not make any money. This is motivation enough for every real estate agent to work hard on selling each home that they list.

 

As you can see there are many reasons why you should use a real estate agent to sell your home. Instead of taking on this job on your own, you would be much better off using a real estate agent. Not only do they know the market, but it can also help to cut a lot of the stress out of your life. And when moving from one home to the next, cutting out stress is something that is of utmost importance.

Using an Agent to Buy a Home

Do you know that you can use a real estate agent to buy a home? Many people think real estate agents only sell homes, but nothing could be further from the truth. If you are in the market for a new home you may want to get a real estate agent on your side. You may think that this is not necessary, but all in all a real estate agent can help you to find the home of your dreams. Many people pass this option by, but you should at least look into it if you are in the market for a new home.

 

So what can a real estate agent do for you if you are buying a home? First off, they have access to every property that is available in your area. This means that all you have to do is tell them what you are looking for, and in turn, they will be able to show you many different homes that suit your needs. This sure beats having to search through the newspaper for homes, or drive around neighborhoods that you think may suit your needs.

 

Another huge benefit of using a real estate agent to buy a home is that you do not have to pay them a dime. That is right; you can get the help of a real estate agent without having to pay out any money. So how does the real estate agent get paid then?  Simply put the agent that they refer you to will share their commission with your real estate agent. This means that you get the help of a real estate agent, the agent gets paid, and the seller finds a buyer. Talk about the perfect set up for everybody involved.

 

Overall, a real estate agent can help you to buy a home just like they can help you to sell a home. If you want to buy a home, why not get the help of a local real estate agent? They have a lot to offer, and you will surely be able to benefit from what they bring to the table.  It is at least worth a look!

Knowing When Your Ready To Buy

All across the United States, there are millions of people looking to a buy home – either now or in the future.  Over the last few years, lower interest rates have come along, making it more affordable than ever to buy a home.  When most people stop and give it some thought – buying a home makes a lot more sense than renting a home or an apartment.

In order to buy a house, you’ll need to start saving your money and have enough for the closing costs and a down payment.  Your down payment will normally need to be around 15% of the price or the value of the property – whichever is lower.  To be on the safe side, you should always try to have 20% to put down.  If you aren’t able to put 20% down, you’ll need to buy some private mortgage insurance, which will cost you more in terms of your monthly payment.

In most cases, the closing costs will run you around 5% of the property price.  Before you purchase the home, you should always get an estimate.  An estimate won’t be the exact price, although it will be really close.  You should always plan to save up a bit more money than you need, just to be on the safe side.  It’s always best to have more than enough than not enough.

You’ll know your ready to buy a home when you know exactly how much you can afford, and you’re willing to stick with your plan.  When you buy a home and get your monthly mortgage payment, it shouldn’t be any more than 25% of your total monthly income.  Although there are lenders out there who will say that you can afford to pay more, you should never let them talk you into doing so – but stick to your budget instead.

Keep in mind that there is always more money involved with a home other than the mortgage payment.  You also have to pay for utilities, homeowners insurance, property taxes, and maintenance.  Owning and caring for a home requires a lot of responsibility.  If you’ve never owned a home before, it can take a bit of time to get used to.

Before you fill out any applications, you should always look over your credit report and check for any errors.  Although you may think you don’t, you can easily get an error on your credit report and not even realize it.  If you have an error on your credit report, it can cost you a lot of money in interest rates.  An error will decrease your credit score, which will put you in a higher interest bracket and ultimately cost you a lot more money in the end.  Therefore, you should always know your credit before you approach a lender.

If you check your credit report early enough, you may leave yourself enough time to fix any problems and get your credit back on track.  Rebuilding credit can take time though, sometimes even years.  You should always plan ahead – and give yourself plenty of time to fix your credit.

Buying a home will require a bit of commitment on your behalf.  You should always strive to get the best possible deals, which means knowing your credit and where you stand.  This way, you can get the best interest rates.  You don’t want to buy a home with bad credit, simply because you’ll pay a lot more money for the home.  If you take the time to fix any credit problems and save up some money – you’ll be able to get a much better home for your money.

Home Prep Needed For Great Sales

If you are considering putting your home on the market, realize that it will take some preparation to get your home up to show quality. Experience is proving that when a home is staged, it can bring in up to many thousands of dollars more than the asking price. Also, staging helps in all types of markets. When there are a glut of homes for sale in an area, what they call a buyer’s market, the home that’s staged is more noticeable to buyers, and the price for it can’t be low-balled the same as a house that doesn’t look as good. Alternatively, in what they call a seller’s market, when there are few homes for sale and real estate is in high demand, staged homes again stand out, often attracting numerous offers. In this way, the price can get driven up as buyers compete with each other for the home. Either way, the homeowner who took the time to stage comes out the winner.

Home staging can mean different things. Everything from just de-cluttering a home, or a rearrangement of furniture, up to making minor repairs, or even completely emptying the house and renting new furniture, are all considered efforts to stage a home. It appears that the more effort, and money, one puts into staging the home, the more they are re-paid for their efforts when the home sells. Not only that, staged homes tend to sell much more quickly than as-is homes.

While many people these days are choosing to hire a professional home stager, and whether or not you can afford that is up to you. Professionals certainly have good ideas, and the experience to know what works and what doesn’t. However, there’s no reason you can’t do the prep work yourself, with a bit of research and applied effort.

Their area few key elements to home staging that tend to be universal. First and foremost, getting rid of excess furniture and knick knacks seems to be key. A cluttered house becomes invisible to a viewer, blanketed under the accoutrements of someone elses life. If necessary, rent storage for all your extra stuff. If you have a storage room, empty it, or set it up to look like an office or weight room, to highlight features you don’t use, but someone else might love. Sometimes all that’s needed is an objective rearranging of your things to create more space and order.

Another key area is repairs. Don’t launch into major renovations, but do fix up really obvious minor flaws, especially around the front door. First impressions are key. Keep in mind that people viewing your home will likely open cupboards and closets. Repair squeaks and sticks so they don’t notice a problem. Since doorways have a tendency to get worn, consider new paint.

If you’re planning to sell your home, you might want to do a little research online to help with your staging ideas, or even look into hiring a professional in your area. No doubt you’ll be glad you did.

Home Buying Checklist – Paint and Stucco

Buying a home is a big investment. You should use a checklist when sizing up potential homes. In this article, we cover a home buying checklist for paint and stucco.

Paint and Stucco

The exterior of  a home typically makes the biggest impression when you first view a potential buying opportunity. Many homebuyers, however, often make the mistake of looking at color schemes as the principal issue. In truth, a close review of the exterior of the prospective home can tell you a lot about the quality of the structure.

A person selling a home is not stupid. Before putting a home on the market, they are going to take steps to spiffy it out to raise buyer interest and the rate you are willing to pay. There is nothing devious about such conduct. It is natural to want to put your best foot forward and a person selling a home isn’t going to act differently. This is why you want to take a close look at the exterior paint and stucco on a home.

1. The first thing to look for is peeling or flaking of paint on the exterior walls. If you see this in an obvious place on a wall, run for the hills because the house needs a total repaint. Typically, you are not going to find such obvious problems. Instead, you need to poke around behind bushes, up under roof overhangs and in nooks and crannies. If you find problems of this sort, it tends to mean the paint job on the home was not applied correctly. Once these problems start occurring, you can count on them getting worse over time.

2. The second thing to look for is stains around perforations in the paint. For instance, look for an area where bolts or nails penetrate a painted surface. If you see rust around the hole, you may be seeing an indication of poor maintenance. Even worse, you may be seeing an indication of a water drainage problem. Investigate such occurrences very carefully.

3. With stucco homes, you are typically going to find some cracking do to earth movement and temperature changes. As long as these areas are relatively small, you shouldn’t have problems patching them for a nominal price. The bigger problem, however, is if you find stains or soft spots on the bottom section of a stucco wall. This can mean there are problems with the drainage screen behind the stucco wall and water isn’t getting out. If water isn’t getting out, the stucco will continue to degrade and you may have a mold problem at some point. Both situations can be very expensive to fix.

When checking out perspective home buying opportunities, the exterior of the home should be looked at very closely.  In this case, the merits of the home all come down to the details.