Friday, December 29, 2017

 https://realestatemogul.com/rehabbing-for-monster-paydays/?a_aid=5ZpxiqobrWuoc

Expectations For the Real Estate Market 2018 By: Holden Lewis Home prices are expected to climb, but not as fast More houses could be for sale toward the end of the year, giving home buyers a greater selection to choose from Homeowners will have more equity to borrow from Yet in other ways, 2018 might continue to be challenging, especially for home buyers. Mortgage rates are likely to rise, reducing affordability. Here are 10 housing and mortgage trends to expect in 2018. 1. Home prices decelerate Good news for first-time home buyers: Home-price appreciation is expected to cool down in 2018 after a torrid couple of years. Home prices rose 6.3% in 2016, according to the Federal Housing Finance Agency. They’re on track to exceed 6% in 2017, too. But for next year, the median forecast among six industry and lender groups is for a 4.1% increase in existing home prices nationwide. Why the slowdown? One factor is home construction. Economists expect the construction of single-family houses to rise sharply in 2018, based on building permit applications. The median estimate has single-family housing starts rising about 8% in 2018, to roughly 912,500 new houses. 2. More homes for sale Home buyers are struggling to find houses for sale. The shortages are especially acute for the kinds of homes that first-time buyers tend to get. Among the reasons for the tight supply: Advertisement Many baby boomers are content to age in their homes instead of downsizing Investors bought millions of homes after the housing bubble burst, and they’re making too much money as landlords to sell Home builders make more profit from expensive houses than entry-level houses, so that’s what they’re constructing Also see: Why aren’t there enough houses to buy? But there’s some hope for 2018: Realtor.com predicts that the housing supply pinch will begin to ease late in the year. “It looks like we could get to a point where we’re seeing growth in inventory sometime in the fall of 2018,” says Danielle Hale, chief economist for Realtor.com. 3. Home sales could rise Resales of existing homes are expected to rise modestly in 2018. The median estimate is that existing home sales will rise 2.5%, to 5.6 million units. Meanwhile, sales of new homes are expected to rise a median of 7%, to 653,500 newly built single-family houses. According to Realtor.com, cities in the South will show the most sales growth in 2018. Hale says she expects 6% existing home sales growth, particularly in markets such as Dallas; Tulsa, Oklahoma; Little Rock, Arkansas; and Charlotte, North Carolina. She says those places are not as “regulation constrained,” they have strong regional economies and developers have plenty of vacant land to build on. 4. Mortgage rates head up Mortgage rates are expected to rise in 2018. CoreLogic, a data provider for the real-estate industry, averaged six forecasts of mortgage rates, arriving at a consensus view that the 30-year fixed will average 4.7% in December 2018. In November 2017, the 30-year, fixed-rate mortgage averaged 4.07%. “Not only are mortgage rates higher, but mortgage rates will be at the highest level since 2011,” Nothaft said at the Urban Institute symposium. “So we’re looking at an environment, going forward, where this era of cheap mortgage rates will largely be behind us.” See: Today’s interest rates Interest rates are notoriously resistant to prediction, though. At the beginning of 2017, most people expected mortgage rates to rise steadily throughout the year. And they did rise — for a few weeks. The average 30-year fixed peaked in mid-March 2017 at 4.58%, according to NerdWallet’s daily survey. Then it declined, dipping slightly below 4% a few times in the summer, before moving upward slightly in the fall. 5. Affordability declines If, as expected, home prices and mortgage rates go up in 2018, homes will be less affordable. For example, if mortgage rates rise to 4.7% toward the end of 2018, and the median price of existing homes rises by 4.1%, then monthly mortgage payments for a typical house would rise substantially. But according to an Urban Institute analysis, middle-class families in much of the country still have some financial wiggle room if rates and prices rise in 2018. Most home buyers don’t appear to stretch to the limits of affordability, the Urban Institute wrote. 6. More equity, more HELOCs As home values rise, homeowners gain equity. And banks expect millions of homeowners to borrow against that equity. About 1.6 million homeowners are predicted to get new home equity lines of credit in 2018, a 16% increase over 2017, according to a recent TransUnion study. The credit bureau says 67% of homeowners have enough equity to get HELOCs, and 80% of those borrowers have high credit scores. Don’t miss: These are the hottest real-estate markets in the U.S. TransUnion forecasts that 10 million homeowners will get HELOCs from 2018 through 2022, double the number of new lines of credit in the five years before that. 7. Security headaches continue Thieves are stealing down payments from home buyers by combining email hacking with wire fraud. And there’s no sign of it slowing. Complaints of this type of wire fraud skyrocketed by 480% in 2016, according to the 2016 annual report (the latest available) from the FBI’s Internet Crime Complaint Center. Lenders and title companies say the problem worsened in 2017, and that they fend off this form of fraud constantly. The best way to avoid becoming a victim: When you receive emailed instructions for wiring money, call your agent to verify. The email may be a fake, designed to trick you into wiring money into a thief’s account. 8. More options for people with credit issues A few specialty lenders are focusing on nontraditional mortgages. For example, Angel Oak Mortgage Solutions in Atlanta targets the borrower “who has had a life event, so they lost their house or had to file bankruptcy or things got really bad, but they’ve now got their feet back on the ground and they’re ready to buy their next house,” says Tom Hutchens, the lender’s senior vice president of sales and marketing. Several lenders offer interest-only mortgages, and even loans with limited income documentation. These mortgages are dubbed “non-QM” because they don’t meet Fannie Mae’s and Freddie Mac’s plain-vanilla “qualified mortgage” rules. One prominent non-QM lender, Impac Mortgage Holdings, plans to begin securitizing these loans early in 2018. 9. Lenders embracing automation Mortgage lenders continue to pour money into automating the loan-application process. The best-known example is Rocket Mortgage by Quicken Loans. But Quicken isn’t the only lender that embraces automation. Some lenders, such as loanDepot, cook up their own automation in-house, while software providers such as Blend and Roostify help large and small banks to automate applications. Now a few lenders want to use automation to guide borrowers to loan products that best suit them. 10. Tax reform affects buyers and owners Tax reform preserves the old capital gains exclusion, but the mortgage interest tax deduction is treated differently. Effective next year, the new law reduces the maximum amount of mortgage debt to acquire a first or second residence for which you can claim itemized interest expense deductions from $1 million (or $500,000 if you use married filing separate status) to $750,000 (or $375,000 if you use married filing separate status). The new tax law limits your deduction for state and local income and property taxes to a combined total of $10,000 ($5,000 if you use married filing separate status). Click on link below for more Real Estate related topics... www.fullcirclehousing.com

Thursday, December 28, 2017

What Are The Steps Involved in Buying A House www.fullcirclehousing.com Your brother-in-law may have different ideas about the order we've come up with. Your real estate agent or lawyer may add a few steps here or there. Through it all, keep in mind that while there are common milestones in most home sales, there’s no such thing as a “routine” real estate transaction. Each one usually has a few twists or turns – some little and some not so little. The basic steps are designed to protect buyer and seller from surprises that end up sending the deal badly off the rails. You also need to take responsibility for keeping the process running smoothly. Even though you’re paying fees to an attorney and a mortgage broker – and the agent is getting a fee from the seller – these folks are working on multiple transactions and things sometime slip through the cracks. As you proceed, ask how long each step should take. You (usually) don’t need to badger these players to keep things moving. But if you haven’t heard back at various stages along your timeline, call and find out how things are going. We’re also assuming you gotten past the “nibbling” stage – reading the paper, maybe going to an open house or two - and you’re ready to get serious. So treat these as general guidelines. Step 1: Go shopping for a mortgage. It may seem backwards to shop for a mortgage before you shop for the house, but there are several reasons for doing this. First, you’ll find our how much you can borrow, which has a lot to do with how much house you can buy. Be careful not to let the lender you push you into a monthly payment you don’t feel comfortable with. There are no “rules” here – only you know how much you can comfortably handle. (For more on this, check this week's Video Answer Desk .) It’s okay to be a little stretched, at least at first. Most people “grow into” their mortgage payments. But it’s also very easy to get in over your head. Stay away from “alternative” loans – like interest only mortgages. If the value of the house goes down after you buy it (not unreasonable in today’s market) you’ll end up owing the bank more than the house is worth. Shopping for a mortgage will also help if you can get “pre-approved” for the amount you’d like to borrow. This means the lender has looked over your credit and financial statement and agreed to lend you the money. Sellers like pre-approved buyers because there’s less risk the deal won’t go through. Step 2: Find a good lawyer. Ask around. Check them out on the Web. Make sure you at least talk to them on the phone and ask them how much they charge: this should be a fixed fee. Ask as many questions as you can, but you probably away won’t get more than 5-10 minutes. Lawyers bill by the hour, so they don’t like to give time for free. You’re looking for someone who is honest, direct and takes the time to explain things. Step 3: Find out what houses are selling for in your area – and how much you’ll have to pay for what you’re looking. Look at selling prices – not asking prices. You can get these from a real estate agent or from your local paper or town/county government. When you find a house roughly like the one you want, as for three “comparables” – recent sales of houses that are roughly your target house. Step 4: Come up with a down payment – usually 15-20 percent of that price. (This is the hard part.) You may not have to put that much down (see step 1) – some lenders will go for 10 percent or even zero. But these loans are riskier and usually more expensive. Besides, without a down payment, you don’t own even a piece of the house. The bank owns the whole thing. Step 5: Find an agent. You don’t have to have an agent, but the real estate industry has pretty much locked up the supply of houses in the hands of agents. Ask around. Check on the Web for your state's real estate licensing board to make sure they're registered and don't have any complaints or suspensions. You’re trying to find someone you can trust, so the first time you catch them stretching the truth, find another one. Real estate agents speak their own language: what you or I would call a broken down shack becomes a “fixer-upper with charm.” (At all times, remember that the agent on both sides of the transaction is paid by the seller.) Step 6: Now find your new home. (Pick up at Step 3 were you left off.) When the time comes, don’t fall in love with the house. You may not get it. Based on the other houses you’ve seen and recent sales of comparables, make a reasonable offer. You don’t have to offer asking price, but if you "lowball," the seller may tell you take a hike. Find out, if you can, what the seller’s circumstances are. If they’ve been waiting for years and are holding out for the best price, you may not have much room to negotiate. On the other hand, if they’ve already bought another house, they may be more “flexible.” Tailor your offer accordingly. Step 7: Wait for a reply. If you’ve bid lower than the asking price, expect a “counter offer” higher than your bid. This can go a few rounds until you settle on a price. Step 8: Once your offer is accepted (congratulations, by the way), you may be asked to put down a “binder” (a deposit of, say, one percent) until the contract is signed; some states give you a grace period of a few days to change your mind and walk away form the deal. Or you may go straight to contract. This process varies from state to state, something you want to ask your lawyer about before you get started. Before signing a contract to buy the house, go to step 9. Step 9: Call your lawyer. The seller’s lawyer will send the contract to your lawyer for review. Read it carefully yourself. There are “standard” clauses, but there’s no such thing as a “standard” real estate contract. (You may hear many people try to tell you this.) Understand what each clause says even if you don’t follow the language in it. This is why you want an attorney who takes the time to explain things. If he can’t or won’t, that’s not a good sign. Go over the “contingencies” very carefully. The contract is not the final sale: it says “if all goes well” you agree to buy the sellers house at the closing. The “all goes well” conditions are the contingencies. What if you don’t get a mortgage? Without a contingency, the contract says you have to buy the house anyway. (This is a common contingency.) Others: The house has to conform to local zoning laws, the seller has to have clear title, there are no “major” problems like a faulty foundation, etc. These are negotiable: you can try to put whatever you like in the contract and the seller is free to cross them out before they sign. The contract will also set the closing date, which is also negotiable. You need time to get your mortgage approved and close up your old home, the seller needs time pack up and to move. Step 10: If it all checks out, sign the contract and hand over a big check – usually at least 10 percent of the cost of the house, depending on the terms of the mortgage. You maybe able to find a lender who will hand you a "no money down" loan but we don't recommend it. Because this is a riskier loan, lenders usually have to charge you a higher rate to cover that risk. You give the down payment check to your lawyer - but they don't get to keep it. Your money goes into escrow – neither you nor the seller own it until the deal closes. If something goes wrong, you may or may not get it back. If the sale is canceled because one of your contingencies wasn’t met, you should get it back. If not, be prepared to lose all or part of your down payment – even if you don’t buy the house. You may have cost the seller another buyer by signing a contract and then not following through. Step 11: Submit your mortgage application, along with an application fee. If possible, get the lenders to “lock” your rate until the closing date. By law, lenders are required to give you an estimate of all closing costs. All in, these can run anywhere from $1,000 to $10,000. Review all the fees before you sign the loan contract. Some common closing costs include: attorney fee, title insurance (in case the title proves faulty), appraisal fee (for the lender’s benefit, not yours - to make sure you’re not overpaying with their money), home inspection, partial property taxes (if you close in the middle of a month), courier fees, mortgage “points” (a percentage of the loan amount), government recording fee, transfer taxes. After a week or so, call the mortgage company to confirm that they have all the pieces of paper they asked for in the application. If you’ve locked in a rate, you want to make sure the process isn’t delayed by some missing document; don’t expect them to call you if it’s not there. Step 12: Show up at the closing and sign the papers. Don’t forget to bring lots of blank checks: you’ll usually have to write separate checks for each of the closing costs. If you’d like, you can also ask to hold the bank check for the purchase price before handing it over to the seller. It’s probably the biggest check you’ll hold in your life. Congratulations! You’re now in debt beyond your wildest dreams! If after a few days or weeks you find yourself thinking you’ve made the biggest mistake of your life, don’t worry: it’s called “buyers remorse” and lots of new homeowners contract this disease. Give it time, watch your mortgage principal go down, figure out how much you're tax deduction is saving your and enjoy the freedom of not paying rent into someone else’s bank account. Click on link below for more Real Estate related topics... www.fullcirclehousing.com

Wednesday, December 27, 2017

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5 NEGOTIATING TACTICS THAT KILL SALE
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Negotiation is a subtle art in real estate, but skilled negotiators can usually find some common ground that satisfies all parties. On the other hand, using the wrong negotiation tactics can sink a deal pretty quickly. Here are some negotiation tactics buyers (and real estate professionals) should avoid:
1)Lowball offers: Going far below market value when you make an offer damages your credibility as a buyer and can be insulting to the seller. The seller has a range in mind that they’ll accept, and if you’re not even approaching the low end of that range, they won’t even consider the offer.
2)Incremental negotiations: Don’t continue to go back to the seller with small increases in your offer ($1,000 or less). The constant back-and-forth can grow tiresome and lead the seller to consider other opportunities.
3)“Take it or leave it”: Try not to draw a line in the sand with your initial offer. The seller can get defensive and consider other offers if you immediately show that you’re unwilling to budge. Even if it’s true, don’t make a show of it.
4)Nitpicking after inspection: Obviously if inspection reveals a major issue, it should be factored into the final sale price. But insisting on a lower price for every minor repair can put negotiations in a stalemate.
5)Asking for more, more, more: Some buyers will request that the sellers throw in add-ons like furniture or appliances that weren’t included in the listing. Try to avoid giving the seller a reason to build up resentment and think that you’re being greedy. Click on link below for more Real Estate related topics...
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Tuesday, December 26, 2017

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               SHORT-SALE AND FORECLOSURE:                             HOW ARE THEY DIFFERENT 
                     www.fullcirclehousing.com

As unfortunate as it can be when homeowners fall behind on mortgage payments and must face the possibility of losing their homes, short sales and foreclosures provide them options for moving on financially. The terms are often used interchangeably, but they’re actually quite different, with varying timelines and financial impact on the homeowner. Here’s a brief overview.
A short sale comes into play when a homeowner needs to sell their home but the home is worth less than the remaining balance that they owe. The lender can allow the homeowner to sell the home for less than the amount owed, freeing the homeowner from the financial predicament.
On the buyer side, short sales typically take three to four months to complete and many of the closing and repair costs are shifted from the seller to the lender.
On the other hand, a foreclosure occurs when a homeowner can no longer make payments on their home so the bank begins the process of repossessing it. A foreclosure usually moves much faster than a short sale and is more financially damaging to the homeowner.
After foreclosure the bank can sell the home in a foreclosure auction. For buyers, foreclosures are riskier than short sales, because homes are often bought sight unseen, with no inspection or warranty

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Monday, December 25, 2017

Rules for Success in Real Estate Investment

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By Norman Linton, President
I have bought and profitably sold some 100 properties over the last 15 years, including a 50,000 sq.ft. office building and an 86,000 sq.ft. shopping center. (Made over $1m. cash in the bank on the last one).
This is not to impress anyone but so that you know that I DO know what I’m talking about and have “walked the walk”.
Rule one: Realize that real estate is a local market, often a really local market. So buy properties you can drive to within the hour. This makes it much easier to: know values, meet potential buyers and sellers, tenants, contractors etc. You can increase this to two hours if the deal is for over $1 million.
Rule two: As a rule of thumb, if you intend to flip a property you should pay 30% below fair market value.
Let me be clear here, if you buy a house for $70,000 and it will be worth $100,000 after you have spent $30,000 in repairs, you didn’t get a bargain. You paid fair market value.
Rule three: NEVER try to pyramid your holdings by borrowing more money against a property you already own. Buy a property, fix it, flip it and use that money against your next deal.
Rule four: Don’t quit your day job until you are earning as much from real estate part time as you are from your day job full time.
Rule five: NEVER lie to get a loan. Don’t fudge appraisals or your income. If the deal is as good as you say it is, you will be able to find a hard money lender on our web site:
Find a Lender Listings
A hard money lender will constantly be looking at deals where it is obvious that the comps have been carefully selected to show a higher value. Why on earth would you do this? Even if you get a loan for more than you should do, you WON’T MAKE MONEY ON THE DEAL. Because you will have PAID TOO MUCH.
Rule six: Always act with integrity. Do what you say you will do when you say you will do it.
On the other hand, there have been borrowers that have lied, bounced checks and they have ended up being  foreclosed. They will never do business again, no matter how good the deal.
Rule seven: Don’t confuse an upwardly moving market with you being smart. If all prices in the area go up 20% that doesn’t make you a real estate genius when you sell, just lucky.
Rule eight: Keep some properties as long term rentals. Say one in three or one in four. That is how you build up true wealth.
Just buying, fixing and flipping is a JOB just like your day job. Not an investment.
If you can buy and keep just one property a year, you will own 10 properties in 10 years. Enough to retire on.
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 4 Ways A Realtor Can Work With Loan Officers

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Loan Officers: 4 Ways to Improve Your Interactions with Real Estate Agents

Real estate agents may from time to time get a cash buyer, but in most instances buyers are taking out loans. This requires a loan officer’s help. And just as real estate agents need loan officers to sell homes, loan officers need homebuyers to stay in business. Long-term relationships with and referrals from real estate agents help loan officers keep volume up,  which means it is important for loan officers to know how to cultivate these relationships.
Forming strong business relationships takes time and effort on your part, but these relationships can make a world of difference in your performance and success. Here are 4 tips to help you build a foundation and improve your interactions with real estate agents, as well as help you stand out from the competition.

1. Realize you are on the same team.

Just as it is in any profession, there are real estate agents out there who can be a real pain to work with. They can be overzealous in their approach, and maybe even pushy in their demands on behalf of their clients. You may even run into a few who are just plain unpleasant. But all difficulties aside, ultimately you and the real estate agents you work with are on the same team. There may be some team members you don’t like working with, and maybe some who you even need to kick off the team, but there will also be many who make it easier for you to win.
One of the ways a loan officer can work better with real estate agents is to approach them like you are both on the same team. You may be surprised at how many are eager to work with you! Real estate agents ultimately want to make their clients happy, and they will gladly push business your way if they know that you are there to help them do that.

2. Be accountable.

Your work as a loan officer can be complicated and unpredictable. You may not always be able to do what you want to do for the people you are serving, no matter how much you like them or how motivated you are to foster your relationships with them.  However, any good real estate agent will understand that you have limitations. As long as you are honest about what is going on, and are accountable for your part in it, you can still develop strong business relationships even when things do not go according to plan.
Accountability is a must if you want to attract the best real estate agents — the kind who can make a huge difference in your loan volume. Real estate is a business filled with uncertainties, just like lending. Often what you expect to happen does not happen, forcing you to scramble to find new solutions if you want to accomplish your goals. Any chance to reduce uncertainty is beneficial to the agents you work with. By being accountable and dependable a loan officer can work better with real estate agents.
From your first interaction with a real estate agent, be clear about what you can or cannot accomplish. Set realistic expectations for everyone you are working with. You may work hard to get a certain result, but be unsuccessful. Whatever the outcome, remain clear with the real estate agent about what is going on and what you have control over. Any agent worth doing business with will appreciate your honesty and accountability, and will want to work with you in the future because of these qualities.
Above all else, do not provide real estate agents unrealistic expectations of your ability to get a loan approved. If it is going to be a very challenging loan, make this clear up front. The last thing any real estate agent wants is a pre-approval letter from you that means nothing. You will quickly be eliminated from a real estate agent’s referral source if you don’t live up to the expectations you have set. A professional real estate agent loves it when you go the extra mile to explain things to buyers, like what not to do so loans aren’t rejected after pre-approval. There isn’t a real estate agent in the world — or a buyer, for that matter — who wants an unpleasant surprise right before a closing.

3. Establish a system for communication.

Communication is just as important as accountability. Real estate agents and their clients eagerly anticipate news from you, and the longer you go without communicating, the harder the situation becomes for the agent. Your work as a loan officer is fairly mysterious to the borrower, and that makes it easier for you to deflect questions from potentially frustrated buyers who are wondering what is going on with their loans. But the real estate agent is often directly in the line of fire when things take too long, or go badly, during the loan process.
It is an unfortunate reality that many loan officers avoid such communication, either because there are no changes to report, or because there is bad news that they would rather not deliver. When the loan officer falls short in communication, the real estate agent is left to pick up the slack. One of the ways a loan officer can work better with real estate agents is to provide relief to the agents you are working with by keeping up regular communication. Just checking in once a week by email with an update on loan status can be helpful. Calling once a week is even better!
If you have a system in place for communicating with real estate agents, and you make this system known to the agents you work with (and follow through with what you say), you will stand miles above the majority of loan officers. When you stand out, referrals come to you, and with those referrals an increase in your loan volume. If you run into problems with a particular loan and know the mortgage is going to be rejected, make sure you have some alternatives you can discuss with both the agent and borrower. This shows the agent that you are not just concerned about your own pocketbook, and that you still want to help get to the final goal.

4. Use social media to help each other.

One of the best things both real estate agents and loan officers can do to communicate more effectively and grow their brands is to have a presence on social media. Today hundreds of thousands of people are using social media to stay in contact with others in their industry. Social media is a great place to grow and nurture relationships with others in your field.
Real estate agents and loan officers who engage with each other on social media create opportunities for both parties to be more successful, for example, by mutually sharing content that is beneficial to one another. Let’s say you are a mortgage broker and have just discovered this compelling article on 3 ways to avoid mortgage insurance (and what it will cost you). Some of the real estate agents you work with on a regular basis, who you are also connected with on social media, can share the link in their own social channels. You of course would return the favor when they write something of their own. This is very powerful and a win-win for both parties. The more you can help each other out using social media, the greater chance you both have of seeing business grow.

Improve Your Loan Volume Through Quality Relationships

In lending, just as it is in real estate, it is important to treat people as well as you can. Do what you say you are going to do. Avoid promising what you can’t deliver. Maintain communication. Be as helpful as you can. These qualities, like the tips above, will make you a trusted lender in the eyes of the best real estate agents in your area — which will only help increase your loan volume over time! These are the best four ways a loan officer can work better with real estate agents!
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Sunday, December 24, 2017

                "MORTGAGE INSIGHTS"
              www.fullcirclehousing.com
There are many loan programs available - too numerous to cover them all, we've highlighted the programs more commonly offered today. Characteristics of each loan program are unique, so consult your mortgage professional for more information and to become familiar with the details of the programs available to you.

To help determine the best loan program for you, consider the following:

    How important is payment certainty? If knowing that your payment will be the same every month is important, consider a fixed-rate mortgage.
    How important is rapid equity buildup? If rapid equity buildup is a factor, consider a shorter amortization period, such as a 15-year, fixed-rate mortgage.
    Do you anticipate increasing or stable income? If income growth is anticipated, you could take advantage of a lower start rate on an ARM or a temporary buydown.
    Other factors to consider include:
        Ability to qualify at market rates for loan amount selected.
        Anticipated term of occupancy.
        Possibility of significant rate changes.
        Existence of up-front costs.


Loan ProgramsCharacteristics
15- and 30-Year Fixed-Rate Mortgages

    Interest rate does not change.
    Principal and interest (P & I) does not change.
    Fixed-rate mortgages fully amortize over a defined period of time and are paid in-full at the end of the loan term.
    Different loan terms are available (15- and 30-year terms are most popular).
    The shorter the term, the faster equity is built and the loan is paid off.

Fixed-Rate Balloons

    P & I payment and interest rate do not change.
    Regular monthly P & I payments are based on 30-year amortization, while the unpaid balance (balloon) is due at the end of a shorter, predetermined term, typically 5, 7 or 10 years.
    Interest rate is typically less than fixed-rate loans.
    Most borrowers anticipate refinancing or selling prior to the end of the balloon term.

Fixed-Rate with Temporary Buydown

    Borrowers or the seller may pay to temporarily "buy down," or lower, the interest rate.
    Decreased interest rate reduces the monthly payment.
    Lower interest rate may help borrowers qualify more easily; qualifying factors may vary.
    Interest rate/payment is typically reduced for 1, 2 or 3 years

Interest-Only Mortgages

    There are no reductions to the principal amount.
    There is no provision for negative amortization.
    Payments may increase up to an amortized amount, but the loan balance itself does not increase.
    Generally, interest-only payments are limited to the first 5, 10 or 15 years of the loan.
    After that, the loan is amortized for the remainder of its term

Adjustable-Rate Mortgages (ARMs)

    There is potential for the interest rate/ payment to fluctuate.
    ARMs transfer to borrowers a portion of the risk associated with a changing economy.
    In exchange for sharing the risk, ARMs offer borrowers initial interest rates that are substantially lower than fixed-rate mortgages.
    The lower interest rate may help borrowers qualify more easily; qualifying factors may vary. Click on link below for more Real Estate related topics and content.... www.fullcirclehousing.com

Saturday, December 23, 2017


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Have a question? Ask our Home Buying expert.
5 Things Real Estate Agents Wish Buyers Wouldn't Do
The relationship you have with your real estate agent can set the tone for the entire home buying process. Your agent is supposed to help you find a property you can afford and work with the seller to negotiate the details of the purchase. But problems could arise if you’re on different wavelengths. If you want everything to run smoothly, here are five bad habits to steer clear of.

1. Being Too Nit Picky

Buying a home is a big financial commitment. And even if you want to get the best possible deal, you’ll need to pick your battles. If you’re trying to force the seller to agree to a minor contingency, you could lose sight of the big picture. And you could eventually lose the home you want altogether if the seller decides to find a buyer who’s less difficult to work with.

2. Not Keeping an Open Mind

5 Things Real Estate Agents Wish Buyers Wouldn't Do
When you meet with an agent for the first time, they’re going to want to know what you’re looking for in a home. They’ll use the feedback you give them to scout properties you might like and arrange for you to view them in person.
Ultimately, you can only buy one home. But that doesn’t mean you should dismiss properties at first glance just because they’re not perfect. If you’re overly critical of your agent’s choices or you refuse to look at the properties that don’t measure up, you could both end up frustrated.

3. Dragging Your Feet

The housing market is chugging along pretty steadily these days and home sales are moving at a fairly rapid pace. If you’re in a highly competitive market, hemming and hawing over whether to make a move on a particular property isn’t something you can afford to do. If you wait to put in an offer and the seller has other interested buyers, you could end up in a bidding war.

4. Undercutting the Asking Price

5 Things Real Estate Agents Wish Buyers Wouldn't Do
There’s nothing wrong with trying to get a good deal on a home, but it’s best to avoid shortchanging the seller. If you want a price that’s too low, the seller may be tempted to cut ties with you.
Real estate agents are trained to understand pricing trends and home values. So if they’re suggesting that you offer or counteroffer a certain amount, it’s a good idea to take their advice into consideration. Consider how you would feel if the tables were turned. If you were the seller, would you accept your low offer? If not, it might be time to make some adjustments.

5. Not Handling Your Responsibilities

As a homebuyer, you’re responsible for providing your lender with the paperwork he or she needs so that you can get access to financing. If you’re taking forever to turn in your forms or you’re postponing the appraisal, your actions could prevent the seller from moving forward. A delay could be particularly problematic if the seller wants to complete the home sale by a certain date.

The Takeaway

It’s important to make sure that you and your real estate agent are on the same page. If you know each other’s expectations, it’ll be easier to avoid bumping heads.
www.fullcirclehousing.com

www.fullcirclehousing.com

Why Own a Real Estate Investment?

Two of the most likely reasons are:

  • To rent the real estate and produce positive cash flow.
  • To resell the real estate for a profit.
There are lots of people out there giving late night TV shows and selling expensive courses that will guarantee to make you rich and famous. Some of their promoters are now in jail, some who aren’t, deserve to be. So here are some simple aids that won’t cost you a dime.
First of all, you make your money when you buy, not when you sell. So finding the motivated seller who is willing to offer you a good deal in exchange for a quick sale is the single most important factor to your real estate investment success.
Surprise, surprise, most owners of real estate want to sell it for full fair market value. In fact many owners are so proud of their real estate they want you to pay MORE than fair market value. Most real estate sellers don’t want to give you a 30% discount on fair market value.  But this is what you need if you intend to fix up and resell the real estate for a profit.
Let’s be clear on this. If you can buy a house for $70,000 that would be worth $100,000 if it was fixed up, but it will cost $30,000 to fix it up, you’re paying market value, NOT getting a bargain. You need to buy this house for $45,000 or keep looking.View our Online Calculator to evaluate that real estate “bargain” in real terms (also available as a FREE Spreadsheet Download).
You need to factor in things like the real cost of fixing it up, the closing costs when you buy, the closing costs when you sell, the cost of money while you are fixing it up from the day you buy it to the day you sell it, any pre-payment penalties on the money you have borrowed etc.
If you intend to keep and rent out the property then you can pay a little more. But don’t forget, even with current interest rates you have vacancy, property taxes, insurance, repairs and maintenance to pay for before you get to positive cash flow. View our Online Calculator to evaluate that real estate “bargain” over the next ten years (also available as a FREE Spreadsheet Download).
Don’t spend hundreds or thousands of dollars on some real estate “get rich quick” seminar or course pitched by some late night TV smoothie, check out our Books on Real Estate Investment.
www.fullcirclehousing.com

Friday, December 22, 2017


Have a question? Ask our Home Buying expert.
3 Ways to Get Preapproved for a Mortgage
When you’re trying to get a mortgage to buy a home, it’s important to make yourself as attractive and appealing to lenders as possible. If you’ve already found a property you like, getting preapproved for a mortgage loan may be just the thing you need to seal the deal. And it’s one good way to avoid getting beat out by other buyers looking at the house you eventually want to call your own.
Preapproval means that the lender has taken a close look at your income, assets, liabilities and credit score to determine whether you qualify for a loan and how much you can afford to borrow. Taking a look at your overall financial picture can give you an idea of whether you’ll be able to get preapproved for a mortgage.

1. Check Your Credit

If you apply for preapproval, the lender is going to look at your credit so it’s to your advantage to know what they’re going to be seeing. Pulling your report won’t hurt your credit score.
The main things you want to look for are late payments, delinquent accounts and collections since these tend to carry the most weight when calculating your credit score. The age of your accounts, the number of inquiries you have for new credit and the total amount of debt you owe also factor in.
If you’ve got a lot of debt it’s a good idea to work on paying it down before trying to get preapproved for a mortgage. Ideally, you should shoot to have a debt-to-income ratio of about a third or less. It’s also a good idea to be proactive about disputing errors or inaccuracies that could be pulling your score down.

2. Get Your Paperwork in Order

3 Tips to Getting Preapproved for a Mortgage
The preapproval process is fairly extensive and the lender will want to see written proof of how much money you make, what kind of cash you’ve got saved in the bank and what you owe to your creditors. Organizing some key financial documents can streamline the process a bit so you’re not wasting time chasing paper.
Depending on the lender, you may need to supply your prior year’s tax return or pay stubs as proof of income. If you’re self-employed, you may need to provide a profit and loss statement for your business. You should also be prepared to pull out your bank statements for the last 30 to 60 days, along with any recent loan or credit card statements.
As a general rule, you should avoid making any major moves when it comes to your assets or debts just before you try to get preapproved. Transferring large sums of money in or out of your bank account or applying for a bunch of new credit cards over a short span of time could cause the lender to doubt your financial stability.
Check out our credit card calculator.

3. Pump Up Your Down Payment

3 Tips to Getting Preapproved for a Mortgage
Putting 20% down on a home has long been the industry standard and if you’re not quite there yet, adding to your savings can be a big help when you’re seeking preapproval. If you already have 20% saved, you may consider bumping that amount up to 25% or even 30%, especially if you’re thinking of taking on a large mortgage.
Bringing a substantial amount of money to the table shows that you’re serious about buying and it can save you money in the long run in terms of the interest you’ll pay on the mortgage. It’s a good idea if someone is gifting money to you for a down payment you’re documenting it properly in case the lender has a question about it.
Photo credit: ©iStock.com/AlexRaths, ©iStock.com/Jacob Ammentorp Lund, ©iStock.com/Peter Zelei
REBECCA LAKERebecca Lake has been writing about the nuts and bolts of personal finance for nearly a decade. She is an expert in investing, retirement and home buying topics. Her work has been featured on The Huffington Post, Business Insider, CBS News, U.S. News & World Report and Investopedia. As a homeschooling mom of two, she's always looking for ways to make the most of every dollar.
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3 Tips for Anyone Buying a $1 Home
The housing market has seen some significant gains over the last few years, but in some cities the effects of the collapse continue to linger. In places like Detroit and Buffalo, vacant homes lost to foreclosure sell at auction with bids starting as low as a dollar, thanks to the U.S. Department of Housing and Urban Development’s Dollar Homes initiative.
Buying a house for just a buck may seem like the deal of a lifetime, but it’s important to be aware of the financial pitfalls that can follow. Before you break into your piggy bank, here’s what you need to keep in mind.

1. Expect to Do Some Renovating

While it might be possible to find a dollar home in good condition, you’re more likely going to be looking at a major overhaul both inside and out. Doing the work yourself can cut down on the cost, but the total bill can easily come to tens of thousands of dollars (or more), depending on what actually needs to be done.
In many instances, homes that are selling for $1 have been abandoned for some time and that lack of maintenance takes its toll structurally. Replacing the roof, upgrading the windows to make the home more energy efficient and ripping out rotting floorboards are just some of the expensive issues you may be dealing with.
If the home is older, it’s a good idea to plan for rewiring and replumbing so that it passes safety inspections. Once the structural improvements are complete, you can move on to cosmetic things like lighting, flooring, painting and installing appliances. Before you try to take on a home improvement project of this size, it’s important to be clear about what your budget is and whether it’ll cover everything that needs to be done.
It’s also a good idea to consider where the money’s going to come from. If you’re going to tap into your personal savings, for example, you have to ask yourself how much cash you’re comfortable parting with and what you’d do if it’s not enough. Having to take out a loan from the bank only adds to your expenses if you have to repay a decent amount of interest on what you borrow.

2. Don’t Forget About Property Taxes and Insurance

Even though you may be mortgage-free, buying a $1 home doesn’t mean you won’t have to pay anything to live there. Before you take on one of these homes, it’s important to factor in what the property taxes and insurance are going to cost each year. If the improvements you make add a substantial amount of value, that’s could add hundreds or even thousands of dollars to your property tax bill.
Getting the property insured can also be a challenge when you’re still in the process of renovating. Insurers tend to view fixer-uppers as a higher risk, so you may not be able to get a conventional policy right away. You may have to substitute a vacant home policy or builder’s risk policy instead, which may mean paying higher premiums until the property is move-in ready.

3. Be Realistic About Your Ability to Sell

Flipping homes isn’t for the faint of heart. It’s a good idea to be really familiar with the market in the area where you’re buying a home to gauge the odds of being able to unload it down the line. Getting a home for just $1 isn’t necessarily the best investment if you’re sinking thousands of dollars into it and you’re not attracting any buyers.
Also, in this circumstances there are also often many other homes that are either abandoned or very cheap in the neighborhood. In that case, it may mean you have to hold onto the home longer to be able to eventually sell it. If you’re thinking of trying a flip with a dollar home, look at the bigger picture to see if it’s going to be worth it. Evaluating the neighborhood and checking out what other homes are selling for can give you an idea of whether your flip will end up being a flop.