New Info 4 Real Estate

A second mortgage is basically a loan that you take against the equity that you have already built into your home. The proceeds from the second mortgage can generally be used for whatever purpose the borrower has in mind. It can be used to pay off a car loan or credit cards. The proceeds can be used for home improvement or to take a vacation. The money can even be put in a savings account for a rainy day fund.

Until a few years ago, the total amount of debt from the 1st and 2nd mortgages combined could exceed 80% of the total market value of the home. Recently however, low interest rates combined with a competitive marketplace have created a lending environment where some lenders have approved 2nd mortgages that, when combined with the balance due on the 1st mortgage, total as high as 125% of the home value.

Most financial advisors will warn you that carrying that much debt on your home is never a good idea. In my practice, I never recommend borrowing more than 100% of the value of your home and would rarely recommend a second mortgage with a loan to value of greater than 90%.

A 2nd mortgage will always be subordinate to the 1st mortgage. In the event of a default and foreclosure , the property is sold with the proceeds first used to pay the 1st mortgage (including any legal costs and other costs of the sale). The remaining proceeds can then be applied to the 2nd mortgage. If there is not enough money remaining from the sale of the home, the 2nd mortgage does not get paid.

A Higher Interest Rate for Second Mortgages

The interest rate that a lender is willing to loan money out at for a home mortgage is dependent on the risk level to him. For this reason that a high risk borrower with a poor credit history will always be charged a higher interest rate than a low risk borrower with a strong credit history.

This theory also holds true for a second mortgage. Because a second mortgage lender is (by definition) second in position to be paid off in the event of a default, and because there is a greater chance that in default there may not be enough equity in the home to pay off the second mortgage in full, second mortgages are almost always given at a higher interest rate regardless of who the borrower is.

Terms available for Second Mortgages

Even though you may be offered several options for terms for your second mortgage, the terms offered will most likely be shorter than those of a first mortgage. This is primarily due to the fact that the amount of the second mortgage is generally much lower than that of the first mortgage.

Second mortgage repayment terms can vary considerably, so it is important that you look around for the one that is best for you. For the most part they range in length from 5 to 20 years, with the majority of second mortgage loans being 10 to 15 years. A select number of lenders will offer a 30 year amortization and some of them will balloon (set a maturity date) of 15 years. This loan is called a 30 due in 15. Generally, just like first mortgages, the longer the maturity, the higher the interest rates. Also, just like first mortgages, the higher the credit score (FICO) the lower the interest rate.

Second Mortgages Types

Not only can the length of the second mortgage vary, so can other repayment terms. The majority of second mortgages, however, are paid back in equal monthly payments with a portion of the payment going to interest and a portion to the principal balance - just like a first mortgage.

The two most common types of second mortgages are the fixed rate and HELOC (home equity line of credit). The fixed rate mortgage is a standard offering. The HELOC is a little unique and has been very popular. This loan type typically calls for interest only payments for the first 5 to 10 years and then the line of credit is frozen at the outstanding balance of the loan. At that point, the loan payments are recast and a standard principal and interest payment is established for the remaining 10 to 20 years. HELOC’s are typically priced with a variable interest rate.

As with other loan pricing, the lower the FICO score and the higher the loan to value, the higher the interest rate for HELOC type mortgages.

When considering a second home mortgage, be sure to shop around and then talk to lenders to ensure that you get the best deal for you!

Third year into the housing correction, the slide continues. 260,000 and 405,000 homes repossessed in 2006 and 2007 respectively (Jan 2008, CNNMoney.com) and possibly 2.5 million in 2008 (US Treasury Secretary Henry Paulson, July 2008, Reuters). The recent enactment of the 3.9 billion dollar housing bill (Housing and Economic Recovery Act 2008) is surely a welcomed relief for many.

It’s one thing to line up all this assistance, it’s quite yet another whether those people in need can reach it or not. A startling one-third of Americans polled literally have no idea how much money they owe. The average American also scored only a D-grade in a survey on financial literacy. We were quick to jump onto the bandwagon of owning a home so now we better buck up on how to defend it when the situation gets rough.

How to stop foreclosure is always a major undertaking and it can be accomplished through various ways most common of which are refinancing, forbearance, loan restructuring, supplementary loan and shortfall forgiveness. Where giving up the home cannot be helped, deed-in-lieu, pre-foreclosure and short sale are ways to avert foreclosure which harms the credit score, not to mention incurring penalties and legal costs.

Whether it?s keeping or dropping the property, the endeavor to stop foreclosure must be laid out with a sound game-plan. Once that?s done, the homeowner must set out in a highly expeditious fashion. A typical profile of execution would look something like this: -Review the financial situation thoroughly -Check out all options -Spot and skip the scams -Consult professionals or experts -Never say never

Foreclosures hurt the lenders and authorities as much as they do the homeowners these days. Given the housing crisis, financial malaise and faltering economy, we can be sure that they would go out of their way to help stop foreclosure. Put bluntly, foreclosure is the knife-edge between an asset and liability insofar as houses are concerned and the last thing that’s needed now is another one crossing over into the heap.

All sorts of information and help agencies have mushroomed everywhere, not least the internet. Public information and assistance websites, real-estate brokers, banks and other lending institutions, investors and capitalists, attorneys and consultants and guides and handbooks can be found in abundance online, all possible solutions to how to stop foreclosure. Then, there are also loads of scams and crooks so watch out, you don’t want to be burnt further!

Property tax lien certificates can be a very profitable means of getting into real estate investment, so I thought I’d share some background information to explain what property tax liens are and why they offer such profitable returns. When a property owner is unable to pay their taxes for example, they can be issued with a tax lien certificate which simply provides a means to guarantee the creditor (in this case the tax collector) will receive the money they are owed.

The tax lien is secured on the personal property or real estate owned by the debtor - the most common form is the mortgage lien. There are several other types of tax liens but we’ll leave those for another line of discussion. Each variation of lien carries its own set of rules on how it is implemented, and each may also vary from state to state.

When the debtor is unable to pay their property taxes, the state issues a tax lien certificate against their property which also includes a time line by which the taxes must be repaid. This grants the lien owner access to the equity within the property in order to claim the money they are owed. If the property owner is then unable to repay the tax lien, it may be sold or auctioned off to the highest bidder.

When buying a tax lien certificate, rather than buying the property, you are actually only lending the property owner the money they need to repay their back taxes. Initially, you are not buying the property. In return however, the property owner is legally agreeing to repay a predetermined amount of interest on your loan - which can be anywhere from 6% to 50% depending on the agreement and the state where you are buying the lien. The property owner is also agreeing to repay your money within a predetermined time period, which will be stated as part of the tax lien certificate.

So here’s how we make our profits. If the property owner is able to repay the value of the tax lien certificate back to you within the allotted schedule, including all interest owed to you, he retains ownership of the property, and his credit rating remains intact.

If the owner is unable to pay the loan, you take possession of the property as the owner of the tax lien certificate secured against it. As the new owner you are able to manage the property as you see fit - renovate it, rent it, sell it etc.

So as a quick recap, s an owner of a tax lien certificate, you will either make a profit by way of the interest repaid on your loan to the property owner, or of the owner is unable to make the repayment, you take ownership of the property and make your profit from how you then manage that property.

The bottom line is that investing in tax lien certificates is relatively safe (providing you understand in detail how the process works, and where any potential risks lie), and is a profit focused way to invest in real estate.

Most homeowners are surprised to learn that major elements of their home are not designed to last as long as the rest of the home. One example is the roof over your head. Some roofs will last 80 years while some will only hold out for 15.

When considering the number of years different roofs might last, it is vital to keep in mind that while materials and other issues certainly play a role, the biggest issue is the impact of the power of nature.

Think about it. The average roof takes a beating. 365 days a year it just sits and bakes in the sun. It expands as it heats up during the day and then contracts as it cools off at night. It gets pummeled by rain, wind and flying objects. Heck, it is pretty amazing it lasts as long as it does.

Given the beating a roof takes, it is not surprising that the type of roofing material used makes a huge difference. A slate rock roof is like putting tank armor on your home. It is going to last for at least 70 years, but it is going to cost you an arm and leg to buy and install.

On the other end of the range, we have the wood shingle roof. Depending on the type of shingle, you can expect it to last anywhere from 10 to 25 years. It is important to understand that these shingles basically come from left over wood pieces with all that implies.

Unlike slate roofs, there is another concern with wood shingle systems. Fire is the problem. Embers landing on wood shingle roofs almost always turn them into fire pits. You can buy far retardant treated wood shingles, but they are not much better.

If you like tiles, I have good news for you. One of the best roofing choices you have from both a financial, aesthetic and fire resistant point of view is the tile roof. They will last between 30 and 40 years as well so long as you consistently replace any broken shingles.

One really interesting new type of roofing you might want to check out is solar shingle roofing. These roofs come in rolls that are spread out in vertical columns down your roof. They are layered so that they look like flat shingles overlapping from top to bottom.

The solar shingle is pretty amazing. Initially, it turns your roof into an energy producer. In some states, you can feed that energy into the local utility system and actually make your meter run backwards, which eliminates your utility bill. Nice, eh?

Having a roof over your head is important, but only if it actually keeps the elements out. If yours is failing, take a look at the different roofing systems available. They can change the entire look of your home and even provide power.

In his Rich Dad book series, Robert Kiyosaki trumpets the benefits of investing, especially those of real estate investing. Those include tax benefits, and the ability to have your money go to work for you without your lifting a finger. It sounds wonderful, doesn’t it? The idea that you can turn a dollar into two just by placing it in what can seem like a magical realm can seem very enticing.

Property investing success doesn’t happen by accident, though; you first need to know the nature of the business. And what is real estate, anyways? Read on to gain a better understanding of real estate, and the different ways in which you can invest.

“Real estate” is a term that refers to a piece of land and everything that sits on it, usually meaning structures. In terms of investment, its value is affected by local market conditions more than global conditions. There are several different ways to invest in real estate.

Investing in an REIT or a Real Estate Investment Trust means that you are the owner of either parcels of real estate, mortgages on pieces of real estate, or some combination thereof. This type of investment has quite a high yield along with some tax benefits, and its liquidity means that you can easily convert it into cold, hard cash.

A partnership in real estate is just what it sounds like; investors may elect to partner with other people or organizations in building new structures, or making money off extant ones. Appreciation is another great source of profit for property investing partnerships, even when you’re dealing with undeveloped land. Tax benefits and growth potential make forming a partnership another great option for investors

The rental of vacation property is pretty self-explanatory. Your vacation property is one that is used for recreational purposes and is not your primary residence, the piece of property on which you live.

Rental property is another common choice for those looking to make money in real estate. Everyone has dealt with landlords, so this type of investing doesn’t take much explaining. Do, however, mind the differences between residential and commercial rental properties.

Even raw or undeveloped land can afford the canny investor a chance to make money off appreciation on its value, and this type of investing also provides the aforementioned tax benefits.

It is a good idea to learn about each type of real estate investment to determine which yields the greatest benefits, determined by your particular needs. Kiyosaki named tax benefits as a good reason to become a real estate investor. After all, money you keep in your pocket is just as good as money earned.

If you are particularly interested in pursuing real estate investment because of tax benefits, you may even wish to become a real estate professional, as the IRS allows people who spend at least 750 hours a year on their investing duties to have nearly unlimited tax deductions. If you are not considered a professional, and your salary is high, that can actually cost you deductions on your real estate. You must have the time to participate in your real estate activities yourself, even if you have hired another real estate professional, to qualify for all tax benefits.

Are you a prospective home buyer living in Florida? Do you need to know how to pick out one of the many Florida home builders? Production builders, semi-custom builders, and custom builders are the main ways they categorize home builders in Florida. Here is a list of qualities each process to better help the home buyer in this most confusing decision.

Production builders in Florida do mass quantities when it comes to constructing homes. This method offers people little choices though. This type of builder offers only a few floor plans. With each floor plan the buyer can choose only from their list of features from the color they want their carpet to the style of their kitchen cabinets. Very limited colors for the outside of the house too. If the buyer has a very basic house in mind this type of Florida home builders may suit them just fine.

If the home buyers want a few more choices the semi-custom builder offers a mixture of ideas not available if using a production builder. The semi-custom builder offers a much diverse selection of plans for the layout of the house. In choosing the carpet style, designs for the bathrooms, or other interior ideas the home buyer also has more to choose from if using this type of Florida home builders. As far as the exterior goes the home buyer may be able to choose even the roof shingles.

For a wow of a house the home buyer needs to turn to a custom builder. Out of all the Florida home builders these custom builders will give the home buyer the most variety in their desires. Most of the most inventive of styles of homes are designed with a custom builder teaming up with the home buyer.

The choices for uniqueness are huge in number whether the homebuyer needs special considerations in the house for people with special needs to just having a kitchen that has plenty of specialized custom cabinets. Check out the custom builder for a true experience in home building.

No matter whom a buyer’s family consists of a house can be built to their needs in Florida. Maybe the buyer is a killer cook and wants a state of the art kitchen. Other buyers may need just a modest starter home. Someone may want the whole house designed different from any other house made.

Buyers can make their homes an inviting haven if they make sure there ideas are considered. Whichever of the builders a buyer chooses to use they will have some kind of chance to put there own touches into their new house. Some of the homebuyers have to be mainly concerned with price. Most buyers though really need to analyze their finances so that they fully understand what price is right for them. Then they need to choose the builder that can come within that price need and give them the classification of house that they need.

Through word of mouth a home buyer should find out which builders are good in their surroundings. There are usually houses to observe the work of the semi-custom and the custom builders. The home buyer may have to set aside time with these builders to look at such houses though. If the home buyer is choosing to use and work with production builders there are plenty of chances to see their work because they work in such large number of houses they are readily available to be observed. With the proper questions asked and answered the home buyer can fully inform themselves before signing any contractual agreements.

Just listing your home for sale is not going to the offer you are looking for. This is particularly true these days when most parts of the country are suffering from bad real estate markets. Preparation is the key to success.

Tips are like mosquitoes in a swamp. There are a lot of them. This is also true for real estate topics. Frankly, it can get confusing because there is such a storm of information. Well, here are the key ones you need to know.

The first step really does not involve your home. Instead, it is about you. You must stand back from your home. It is no longer a place where you lived for so many years. It is now a product to be sold. Adjust your emotions accordingly.

It is vital that you make the emotional jump to understanding something. This is no longer your home. It is a piece of property to be sold. Your attitude should not be based on what you prefer, but on what is going to get the home sold the quickest.

Now apply this product attitude to your home. This means pulling all personal items. You want people to picture their family living in the home, so pull all your personal photographs, drawings by kids and so on.

The next step is to cast a critical eye towards clutter in the house. If you objectively do not use something, get rid of it. Most rooms have way too much junk in them, so really do a critical walk through. Space sells. Junk does not.

When doing this walk through, make sure you also look for comfort items. Every house has them. You know, that chair or couch that is comfy, but is not exactly in good shape. While good for living, such items are bad for selling.

Importantly, you need to understand that the entire home is going to be looked at by buyers. Closets will be opened, basements will be walked, attics will be snooped in and garages will be strolled. You should not expect any privacy, so remove anything private.

Finally, look for any obvious problems and fix them. A cheap upgrade you can make is to repaint any areas of trim. This includes around windows, doors and any other area that is framed. A little paint can really go a long way.

Can you sell a home these days? Of course. Yes, the market is slow, but homes are selling. The key is to make your property standout compared to others. Apply these tips and you will be well on your way.

It’s an unfortunate fact of life that regardless of where you go, you are sure to encounter cynics and pessimist. Whatever it is that you hope to accomplish, these people will be ready with discouraging words. This goes double when one is talking about money - since most people don’t have as much of it as they would like, or any idea how to acquire more, it’s easy to become jaded, believing that financial success is impossible for those who are not already wealthy.

You may have heard discouraging words from the media regarding the plummeting values and rising prices of property investments. Like many people, you may consider success in real estate to be an utterly impossible goal in today’s economy. If this is the case, however, you’ve been listening to the wrong people; in reality, people are making money in real estate right now, and you can too, if you listen to the right people.

Sounds easy doesn’t it? Yes it does. That’s because it is. It is very easy to find a person who knows how to make money by investing in real estate, find out what has worked for them, and apply it to your own life. If it’s so easy, you might be tempted to say, then why isn’t everyone doing it? And that, my friend, is the meat of the matter. Everyone isn’t doing it for two reasons. The first reason is that they’ve simply been told all their lives that success is very, very difficult. In fact, they’ve been told, because of the scarcity of money, success is almost impossible.

Most people are scared of trying to make money, based on cynicism and negative hype.

The other reason most people aren’t making a fortune on the real estate market, is that it’s just so simple. The people who find great success in property investing are the ones who learn a logical system and stick to it. A systematic approach is reliable, but it’s also dull, and that’s why so many people forego the obvious, proven methods of making money, and get tripped up on complex, esoteric moneymaking scams. These sorts of schemes may seem more fun and dramatic than gradually building wealth through proven methods, but the problem is that they simply do not work.

Because most people think like that, those are the ideas that the media are catering to. That is why murder and mayhem is front-page news and happy things are not. That is why people slow down when they see an automobile accident and not when they see a couple holding hands. Tragedy is far more interesting. Just check out the plot line of any major motion picture. People like to believe that life is tough.

Luckily, this cynical viewpoint on the real estate market is not an accurate one. Not by a long shot.

If you want to succeed, the first step is to break through the wall of cynicism that you’ve more than likely developed as a result of a lifetime of listening to media sensationalism and the pessimists you encounter in your day-to-day life. You need to start listening to the people who know that success is possible, and, furthermore, know exactly what one needs in order to achieve it. These folks will tell you that in order to make money in real estate, you’ll need to formulate a systematic plan, and you’ll need to stick to it. Why would you listen to those who haven’t found success, when you could be getting the facts straight from me and others who have made money as real estate investors. Think about it.

If you are about to move in the coming future, let it be an easy project. Sure, there are a lot of things that’s related to a home moving and they all need to be taken cared of, but by knowing the tricks you can make them seem less overwhelming.

For those that can hire a moving company to do the whole move for them, this is a very convenient way to move. Most of us have to move on a budget and therefore do more of the work ourselves. I will here share some tips that is helpful if that is the case for you.

If you want a really simple and helpful tool for you to stay organized during this time, make a checklist. On it you write down everything you have to accomplish and what time it has to be done. By planning the month before you move in this way, the work will seem less and you don’t risk forgetting anything.

If you want to avoid last minute stress and to have a somewhat easier packing, start it a good bit ahead of the actual move, a few week up to a month is often a good amount of time. Start with goods you don’t normally use and close to the move you can pack down your everyday items.

If you decide to let a moving company do the actual move, make sure you book them about a month before the date you want to move. A lot of the reputable moving companies are busy in the end of the month and on weekends and you don’t want to risk being without a mover on the day of your move.

When you are packing your boxes, work smart and make sure you fill the boxes to their capacity. This is to avoid that anything gets damaged during the move. You also want to make sure that each box is being marked properly with both content and the room it is going to. This little task makes it so much easier to do the unpacking.

Before you move the furniture into your new home, make a plan and let the moving company or yourselves place the furniture at the right spot straight away.This will save you a lot of unnecessary lifting. Don’t rush it when you’re moving in, let the unpacking and reestablishing take its time and do a little every day or more when you feel inspired.

The key to an easy move is simply to stay organized and well informed and to have a proper plan. In this way you save yourself from a lot of stress and your move can become a pretty convenient project.

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