Archive for February, 2010
Affordable Housing – What Can You Afford?
Most home buyers do not know where to begin when determining how much house is affordable.Typical wisdom begins by looking at a debt mortgage payment credit card debt car payments etc. to income ratio of no more than 40. Based on a monthly family income of 4000 per month this means your total debt should not be more than 1600 per month. According to a mortgage calculator found at http://www.cgi.money.cnn.com/tools/houseafford/houseafford/html a family with this income could conservatively afford a monthly house payment of 780. This equates to a home price in the range of 80000.
You have read the newspaper headlines. The current credit crises. A record number of homes in foreclosure. This is why it is even more important to ensure that you are in a strong position financially to purchase a home. By contacting your bank or a local lender you can determine the strength of your financial background.
Many current home owners having issues purchased homes with little or no down payment and interest only mortgages. This means that the payments made pay only interest and do not reduce the principal amount of the loan. While these loans made it easier for many people to purchase homes many buyers in this situation are upside down owing more on their homes than the current value of the home.
Other considerations include the length of time you can stay in your home. If you cannot commit to remaining in the home you purchase for at least three to four years you will unlikely be able to recoup the transaction costs of buying and selling a home not to mention allowing enough time for the market to improve allowing appreciation in the base price of your home.
Some individuals particularly those in their fifties and sixties are choosing to sell a current home and downsize to a smaller home with a one level floor plan. Again when making these plans consider how your long term income will support a mortgage after you retire. For those fortunate enough monies made from the previous sale of a home may make the transition easier. Again in this case consider how long you will be able to stay in the home. Consider current and potential health issues to determine if a move to an independent living community may be a better choice than downsizing to a smaller home. There are many considerations that can be reviewed with a care navigator.
How ownership also comes with added responsibilities. You will need to budget for regular upkeep and home repairs. When buying a home it is a good idea to purchase a home buyer warranty or request that the seller purchase this for you. The benefit of this is peace of mind that anything missed in inspection is covered by the policy. Normally for a deductible of 50 the policy will cover repair of electric plumbing and heating systems. This type of policy can be renewed after the first year for an additional year.
In spite of the fact that many people believe they can save money by doing it on their own an experienced realtor can guide you through the home buying process and actually save you money through negotiation and by representing you to ensure that the process goes smoothly. You also receive advice on making sure that you are purchasing a house in good condition in a neighborhood tat will be likely to increase in value. There are also many other small details like clear title absence of liens or easements and that any issues that come up in home inspection can be properly addressed.
About the writer: Pamela D.Wilson specializes in planning counseling and advocacy for older adults. Contact her at The Care Navigator For real estate info related to this article visit Wilson Real Estate
Advantages Of A Real Estate Investing Course
A practical real estate investing course is very important for anybody who wants to join this industry. You can start from scratch. But if you do this course you can then get an idea about the industry. It will be an added help for you. It will also give you more mileage.
Doing a real estate investing course is very simple. This course can be done online. So you will not have to go to any place or travel long distance for attending classes or exams. You can do all of these by sitting at home.
The main advantage of a real estate investing course is that if you do this course along with gaining hands on experience then you will be able to save yourself some extra months spent in formal training. For example a person without this kind of knowledge will take a longer time to gain it through many more years of experience. But if you have training in a real estate investing course behind you then you will get all the initial knowledge from there.
Doing a real estate investing course can be a good investment for you. You can save a whole lot of money. Here you are getting proper information and training. So you will not waste your money in any unknown zone.
A real estate investing course will increase your connections. While doing this course you can come in contact with different people who are keen to invest in real estate. These contacts and networking will help you in future.
A real estate investing course will also teach you effective ways to seek good opportunities as well as structuring the contracts. While opting for a real estate investing course keep some points in your mind.
Always choose a real estate investing course where there is a good instructor. Good instructor will not only be a good teacher but he or she must also have some hands on experience in this stream. Choose a course that suits your budget and also gives you a quality lesson.
About the writer: Brad Wozny is a real estate investing expert. Let Brad show you how to connect with eager real etsate investor buyers sellers of investment properties. Access private money creative lending resources. Read more about Brad on his Real Estate Blog and claim your FREE Strategic Real Estate Investment Manifesto.
2006 Housing Market Third Best Ever Overall Dollar Volume Second Highest In History
For those of us in the real estate and mortgage industry much of the recent news is causing us to wonder if many of us will still be here this time next year. The real estate industry is changing and any successful agent or mortgage broker must adapt to stay in business. Individual demise will not however be the result of lack of volume.
Consider these numbers: In 2003 as a real estate agent making 3 of the 170000 median sale price and completing 25 transactions the gross income would have been 127500. In 2006 that same agent would have only had to complete 20 deals and the gross income would have been 133200. The total number of sales in 2006 was not 20 less than the 2003 number yet one could still make more money and work less. What a bummer!
Mortgage brokers should consider these numbers as well: In 2004 with 20 down the average loan amount would have been 147280 based on the median sale price. Charging 1 and completing 50 transactions throughout that year the gross income would have been 73640. In 2006 with 20 down the average loan amount would have been 177600 based on the median sale price. With 15 less production the total number of loans completed would have been 42 and the gross income would have been 74592. Not a big increase but loan volume was not down 15.
As industry professionals we need to adapt with the market and know how and where to find the next deal. You could offer the best service lowest rates or fastest whatever. The bottom line is that if people dont know how to find you or you dont find them the product/service goes unused.
Lets consider some of the NAR comments and opinions of past years to determine what to expect in 2007 and beyond. David Lereah NAR’s chief economist and previous NAR President Al Mansell have had this to say:
1/2002 David Lereah NAR’s chief economist Although mortgage interest rates moved around a lot during 2001 they generally stayed within a range of a half of a percentage point. In fact last year was the second lowest year on record since Freddie Mac started tracking mortgage interest rates in 1971 and that is one of the fundamental factors in the favorable market conditions that we expect to prevail for this year as well Freddie Mac reported interest rates averaged 6.9.
2/2003 David Lereah NAR’s chief economist To a certain extent it appears many of the buyers may have been in the market for a while and moved decisively as interest rates dropped to generational lows he said. When you look at the corresponding rates of price increase these are buyers who put their money on the table to get their share of the American dream. Freddie Mac reported interest rates averaged 6.08.
1/2004 David Lereah NAR’s chief economist “We’ve been expecting the pace of home sales to ease and a decline in November 2003 seemed to indicate a more sustainable pace but the rebound in December 2003 the second highest monthly pace on record shows there’s still a lot of life in this market” he said. “The biggest factor is a resumed decline in mortgage interest rates which have been much lower than most analysts expected.” Freddie Mac reported interest rates averaged 5.88.
1/2005 NAR President Al Mansell CEO of Coldwell Banker Residential Brokerage in Salt Lake City said strong price growth is being driven by a shortage of homes available for sale. “The demand for homes remains in record territory but the supply of homes on the market set an alltime low in January” he said. “The growth in home equity is adding to housing wealth and helping the overall economy yet low mortgage interest rates are keeping homes within reach of buyers in most of the country.”
1/2006 David Lereah NAR’s chief economist “This is part of the market adjustment we’ve been discussing with a soft landing in sight for the housing sector” he said. “The level of home sales activity is now at a sustainable level and is likely to pick up a bit in the months ahead. Overall fundamentals remain solid driven by population and employment growth as well as favorable affordability conditions in most of the country so we expect the housing market to remain historically high but lower than last year’s record.” Freddie Mac reported interest rates averaged 6.23.
1/2007 David Lereah NAR’s chief economist Despite all of the doomandgloom stories and dire predictions over the last year 2006 was the third strongest year on record for existinghome sales. It looks like were moving beyond the low for the housing cycle last fall and buyers are responding to historically low interest rates and competitive pricing by home sellers. In addition a tightening inventory of homes on the market is supporting prices. Freddie Mac reported interest rates averaged 6.14.
Spokane Real Estate Agent and Washington mortgage broker Michael Sanborn said While rates continue to remain at a very low point historically inventory is much higher than average. Home prices for 2007 are expected to be maintained and even increase in certain regions. As the inventory tightens home values may increase as long as interest rates dont increase to a point that might offset that. Either way people will have to buy and sell. Homes will need to be financed or refinanced. New homes are being built all of the time and the population is continually increasing. Things really do look good but you need to make sure youre business is doing the right things to be in front of the clients.
About the writer: Don Conrad is the author of the soontobe released book How to Find That Quality Tenant. His book and website are dedicated to educating and improving the landlord tenant selection process. His website at www.findthatqualitytenant.com contains informational articles valuable links real estate forms a list of landlord associations tips of the month a Fair Housing Test FAQs and much more.
