1. What is Real Estate? Real estate From Wikipedia, the free encyclopedia Jump to: navigation, search Real estate or immovable property is a legal term (in some jurisdictions) that encompasses land along with anything permanently affixed to the land, such as buildings. Real estate (immovable property) is often considered synonymous with real property (also sometimes called realty), in contrast with personal property (also sometimes called chattel or personalty). However, for technical purposes, some people prefer to distinguish real estate, referring to the land and fixtures themselves, from real property, referring to ownership rights over real estate. The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property. In recent years, many economists have not recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich or poor, a significant fraction of the total wealth is in the form of land and buildings. In most advanced economies, the main source of capital used by individuals and small companies to purchase and improve land and buildings is mortgages -- bank loans for which the real property itself constitutes collateral. Banks are willing to make such loans at favorable rates in large part because if the borrower does not make payments the lender can foreclose, that is, file a court action that lets them take the property and sell it to get their money back. But in many developing countries there is no effective means by which a lender could foreclose, so the mortgage loan industry as such either does not exist at all or is only available to members of privileged social classes. In spite of the name, real estate has no connection with the concept of reality (in other words, the law does not consider real property more "real" than personal property). It derives instead from the feudal principle that in a monarchy, all land was considered the property of the king. Thus originally the term real estate was equivalent to "royal estate", real originating from the French royale, as it was the French-speaking Normans who introduced feudalism to England and thus to the English language; cognate to Spanish real. With the development of private property ownership, real estate has become a major area of business. Purchasing real estate requires a significant investment, and each parcel of land has unique characteristics, so the real estate industry has evolved into several distinct fields. Cities such as Vancouver, British Columbia have experienced remarkable growth in real estate prices in the new millenium. Specialists are often called on to valuate real estate and facilitate transactions. Some kinds of real estate businesses include: Appraisal - Professional valuation services Brokerages - Assisting buyers and sellers in transactions Development - Improving land for use by adding or replacing buildings Property management - Managing a property for its owner(s) Real Estate Marketing - Managing the sales side of the property business Relocation services - Relocating people or business to different country Within each field, a business may specialize in a particular type of real estate, such as residential, commercial, or industrial property. In addition, almost all construction business effectively has a connection to real estate. "Internet Real Estate" is a term coined by the internet investment community relating to the parallel that exists between high quality internet domain names and real-world, prime real estate. Federal Home Loan Mortgage Corporation From Wikipedia, the free encyclopedia Jump to: navigation, search Freddie Mac Type Public Slogan We Open Doors Founded 1970 Location McLean, economy and is, therefore, good for the bond market. Conversely, a big gain in employment would be an obvious cue for the Federal Reserve to tighten (raise) either the federal funds rate or the discount rate. Bond Market Moves Up In Price. Appraisal Basics An appraisal of real estate is the valuation of the rights of ownership. The appraiser must define the rights he intends to appraise. The appraiser does not create value, the appraiser interprets the market to arrive at a value estimate. As the appraiser compiles data pertinent to a report, consideration must be given to the site and amenities as well as the physical condition of the property. An appraiser may spend only a short time inspecting the property, however, this is only the beginning. Considerable research and collection of general and specific data must be accomplished before the appraiser can arrive at a final opinion of value. Due to the many types of value, such as fair market value, insurance value, tax value and value in use, the need to precisely define the purpose of the appraisal is essential. Appraisal Methods An appraisal is an opinion of value or the act or process of estimating value. This opinion or estimate is derived by using three common approaches, all derived from the market. 1. The cost approach to determining value is to estimate what it would cost to replace or reproduce the improvements as of the date of the appraisal, less the physical deterioration, the functional obsolescence and the keep balances low on credit cards and other "revolving credit;" apply for and open new credit accounts only as needed; and pay off debt rather than moving it around. Also don't close unused cards as a short term strategy to raise your score. Owing the same amount but having fewer open accounts may lower your score. Recent changes minimize the negative effects that rate shopping can have on a mortgage applicant. If there is a consumer originated inquiry within the past 365 days from mortgage or auto related industries, these inquiries are ignored for scoring purposes for the first 30 calendar days; then, multiple inquiries within the next 14 days are counted as one. Each inquiry will still appear on the credit report. Every score is accompanied by a maximum of four reason codes. Reason codes identify the most significant reason that you did not score higher. The reason codes can help a lender describe the reasons for higher than expected rates or loan denial. Scores are not part of the credit profile and are not covered by the Fair Credit Reporting Act. Your credit report must contain at least one account which has been open for six months or greater, and at least one account that has been updated in the past six months for you to get a credit score. This ensures that there is enough information in your report to generate an accurate score. If you do not meet the minimum criteria for getting a score, you may need to establish a credit history prior to applying for a mortgage. Credit Reporting Agencies Credit Reporting Agencies collect information about you and your credit history from public records, your creditors and other reliable sources. These agencies make your credit history available to your current and prospective creditors and employers as allowed by law. Credit agencies do not grant or deny credit. The credit reporting agencies are: Equifax PO Box 105873 Atlanta, GA 30348 800-685-1111 Experian PO Box 2002 Allen, TX 75013 Consumer Credit Questions 888-EXPERIAN (888-397-3742) TransUnion Post Office Box 2000 Chester, PA 19022 (800) 888-4213 Low Down Payments and Mortgage Insurance Simply put, mortgage insurance protects the mortgage company against financial loss if a homeowner stops making mortgage payments. Mortgage companies usually require insurance on low down payment loans for protection in the event that the homeowner fails to make his or her payments. When a homeowner fails to make the mortgage payments, a default occurs and the home goes into foreclosure. Both the homeowner and the mortgage insurer lose in a foreclosure. The homeowner loses the house and all of the money put into it. The mortgage insurer will then have to pay the mortgage company's claim on the defaulted loan. For this reason, it is crucial that the family buying the home can really afford it, not only at the time it is purchased, but throughout the time period of the loan. Although the cost of the mortgage insurance is paid by the home buyer, or borrower, the mortgage insurer works directly with the mortgage company. Mortgage insurance is available to commercial banks, savings & loans and mortgage bankers, all of whom offer mortgage loans to home buyers. Remember that mortgage insurance is not the same as credit life insurance, also called mortgage life insurance. This type of policy repays an outstanding mortgage balance upon the death of the person who took out the insurance policy. The Secondary Market The mortgage company's decision to use mortgage insurance is driven by the requirements of investors in the mortgage market. Because of the losses that could occur, major investors require mortgage insurance on all loans made with low down payments. The three primary investors in home loans are Level Rates Down Rates Up Lock In Period Rates Up Rates Down The amount of your loan can increase your interest rate if the amount financed exceeds the conforming loan limits established by Fannie Mae and Freddie Mac. The conforming loan limit changes at the beginning of each year. Shorter loans, such as 20 year or 15 year note, can save you thousand of dollars in interest payments over the life of the loan, but your monthly payments will be higher. An adjustable rate mortgage may get you started with a lower interest rate than a fixed rate mortgage, but your payments could get higher when the interest rate changes. A larger down payment ?greater than 20% - will give you the best possible rate. Down payments of 5% or less should expect to pay a higher rate as you are starting with less equity as collateral. If you've got the cash now and want to lower your payments, you can pay on your loan to lower your mortgage rate. It's a simple concept, really: In exchange for more money upfront, lenders are willing to lower the interest rate they charge, cutting the borrower's payments. Closing costs are fees paid by the lender, if you don want to pay all of the closing costs, expect a higher rate which will pay the lender additional interest over the life of the loan. Credit quality and debt-to-income-ratio affect the terms of your loan through FICO Score. If you have good credit and your monthly income far surpasses your monthly debt obligations, you will get approved at a lower interest rate. However, if your monthly income barely covers your minimum debt obligations, even if you have a credit report, you will not receive the lowest available interest rate. Lock In Your Interest Rate A lock, also called a rate lock or rate commitment, is a lender's promise to hold a certain interest rate and a certain number of points for you, usually for a specified period of time, while your loan application is processed. Depending upon the lender, you may be able to lock in the interest rate and number of points that you will be charged when you file your application, during processing of the loan, when the loan is approved, or later. Shorter loans, such as a 20 year or 15 year note, can save you thousand of dollars in interest payments over the life of the loan, but your monthly payments will be higher. An adjustable rate mortgage may get you started with a lower interest rate than a fixed rate mortgage, but your payments could get higher when the interest rate changes. A larger down payment greater than 20% will give you the best possible rate. With a down payment of 5% or less, you should expect to pay a higher rate as you are starting with less equity as collateral. If you've got the cash now and want to lower your payments, you can pay points on your loan to lower your mortgage Loans FHA allows 100% of the down payment to be a gift from friends, family or other sources. FHA Mortgage Closing Costs Closing costs can also be financed to reduce the up front cost of buying a home. FHA Streamline Refinance Loan A program that reduces the amount of documentation and underwriting that needs to be performed by the mortgage company. FHA Single Family Rehab Mortgage - Section 203(k) A single family home rehabilitation program that enables you to finance both the purchase or refinance of a house and/or the cost of its rehabilitation through a single mortgage. FHA Single Family Mortgage Insurance for Outlying Areas - Section 203(i) A single family mortgage program that provides mortgage insurance for a person to purchase a principal residence in a rural area. FHA Adjustable Rate Mortgage A single family adjustable rate mortgage that provide mortgage insurance for a person to purchase or refinance a principal residence at a lower initial interest rate. FHA Property Improvement Loan Insurance - Title I A program that makes it easier for consumers to obtain affordable home improvement loans by insuring loans made by private lenders to improve properties that meet certain requirements. FHA Energy Efficient Mortgage A program that provides mortgage insurance for the purchase or refinance of a principal residence that incorporates the cost of energy efficient improvements into the loan. HUD Reverse Mortgage A program for homeowners 62 and older who have paid off their mortgages or have only small mortgage balances remaining. The program allows homeowners to borrow against the equity in their homes in a lump sum, on a monthly basis for a fixed term or for as long as they live in the home, or on an occasional basis as a line of credit. VA Loans Certificate of Eligibility A veteran who doesn't have a certificate can obtain one easily by completing VA Form 26-1880. Eligibility Requirements Veterans who served on active duty and were discharged under conditions other than dishonorable, during World War II and later periods are eligible for VA loan benefits. Eligibility Questions Answers to commonly asked questions about VA loan eligibility. Financing Benefits More than 29 million veterans and service personnel are eligible for VA financing. Even though many veterans have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement. VA Loan Purposes To buy a home, build a home, simultaneously purchase and improve a home, etc... Obtaining a VA Loan The CRV (certificate of reasonable value) is based on an appraiser's estimate of the value of the property to be purchased. VA Loan Costs A basic funding fee of 2.0 percent must be paid to VA by all but certain exempt veterans. A down payment of 5 percent or more will reduce the fee to 1.5 percent and a 10 percent down payment will reduce it to 1.25 percent. Restoration of Entitlement Veterans who had a VA loan before may still have "remaining entitlement" to use for another VA loan. VA Loan Questions & Answers Answers to commonly asked questions about VA loans. VA Office Locations VA has provided toll free numbers for the convenience of veterans and dependents. Fixed Rate Mortgages The most common type of mortgage program where your monthly payments for interest and principal never change. Property taxes and homeowners insurance may increase, but generally your monthly payments will be very stable. Fixed rate mortgages are available for 30 years, 20 years, 15 years and even 10 years. There are also "biweekly" mortgages, which shorten the loan by calling for half the monthly payment every two weeks. (Since there are 52 weeks in a year, you make 26 payments, or 13 "months" worth, every year.) Fixed rate fully amortizing loans have two distinct features. First, the interest rate remains fixed for the life of the loan. Secondly, the payments remain level for the life of the loan and are structured to repay the loan at the end of the loan term. The most common fixed rate loans are 15 year and 30 year mortgages. During the early amortization period, a large percentage of the monthly payment is used for paying the interest. As the loan is paid down, more of the monthly payment is applied to principal. A typical 30 year fixed rate mortgage takes 22.5 years of level payments to pay half of the original loan amount. Introductory Rate ARM's Most adjustable rate loans (ARMs) have a low introductory rate or start rate, some times as much as 5.0% below the current market rate of a fixed loan. This start rate is usually good from 1 month to as long as 10 years. As a rule the lower the start rate is the shorter the time before the loan makes its first adjustment. Index The index of an ARM is the financial instrument that the loan is "tied" to, or adjusted to. The most common indices are the 1-Year Treasury Security, LIBOR (London Interbank Offered Rate), Prime, 6-Month Certificate of Deposit (CD) and the 11th District Cost of Funds (COFI). Each of these indices move up or down based on conditions of the financial markets. Margin The margin is one of the most important aspects of ARMs because it is added to the index to determine the interest rate that you pay. The margin added to the index is known as the fully indexed rate. As an example if the current index value is 5.50% and your loan has a margin of 2.5%, your fully indexed rate is 8.00%. Margins on loans range from 1.75% to 3.5% depending on the index and the amount financed in relation to the property value. Interim Caps All adjustable rate loans carry interim caps. Many ARMs have interest rate caps of six months or a year. There are loans that have interest rate caps of three years. Interest rate caps are beneficial in rising interest rate markets, but can also keep your interest rate higher than the fully indexed rate if rates are falling rapidly. Payment Caps Some loans have payment caps instead of interest rate caps. These loans reduce payment shock in a rising interest rate market, but can also lead to deferred interest or "negative amortization." These loans generally cap your annual payment increases to 7.5% of the previous payment. Lifetime Caps Almost all ARMs have a maximum interest rate or lifetime interest rate cap. The lifetime cap varies from company to company and loan to loan. Loans with low lifetime caps usually have higher margins, and the reverse is also true. Those loans that carry low margins often have higher lifetime caps. Cost of Funds Index (COFI) The 11th District Cost of Funds is more prevalent in the West and the 1-Year Treasury Security is more prevalent in the East. Buyers prefer the slowly moving 11th District Cost of Funds and investors prefer the 1-Year Treasury Security. The monthly weighted average 11th District has been published by the Federal Home Loan Bank of San Francisco since August 1981. Currently more than one half of the savings institutions loans made in California are tied to the 11th District Cost of Funds (COFI) index. The Federal Home Loan Bank's 11th District is comprised of saving institutions in Arizona, California and Nevada. Few people who use and follow the 11th District Cost of Funds understand exactly how it is calculated, what it represents, how it moves and what factors affect it. The predecessor to the 11th District Cost of Funds index was the District semiannual weighted average cost of funds published for a six month period ending in June and December. The San Francisco Bank was the first Federal Home Loan Bank to publish a monthly cost of funds index. The funds used as a basis for the calculation of the 11th District Cost of Funds index are the liabilities at the District savings institutions: money on deposit at the institutions, money borrowed from a Federal Home Loan Bank (known as advances) and all other money borrowed. The interest paid on these types of funds is the cost of these funds. The ratio of the dollar amount paid in interest during the month to the average dollar amount of the funds for that month constitutes the weighted average cost of funds ratio for that month. The average cost of funds is said to be weighted because the three kinds of funds and their costs are added together before a ratio is computed rather than calculating averages individually for the three sources and using a simple average of the three ratios. This gives the greatest weight to the interest paid on deposits, and explains the delayed reaction of the index to rising fixed rate mortgages. Graduated Payment Mortgage (GPM) The GPM is another alternative to the conventional adjustable rate mortgage, and is making a comeback as borrowers and mortgage companies seek alternatives to assist in qualify for home financing Unlike an ARM, GPMs have a fixed note rate and payment schedule. With a GPM the payments are usually fixed for one year at a time. Each year for five years the payments graduate at 7.5% - 12.5% of the previous years payment. GPMs are available in 30 year and 15 year amortization, and for both conforming and jumbo loans. With the graduated payments and a fixed note rate, GPMs have scheduled negative amortization of approximately 10% - 12% of the loan amount depending on the note rate. The higher the note rate the larger degree of negative amortization. This compares to the possible negative amortization of a monthly adjusting ARM of 10% of the loan amount. Both loans give the consumer the ability to pay the additional principal and avoid the negative amortization. In contrast, the GPM has a fixed payment schedule so the additional principal payments reduce the term of the loan. The ARMs additional payments avoid the negative amortization and the payments decrease while the term of the loan remains constant. The scheduled negative amortization on a GPM differs depending on the amortization schedule, the note rate and the payment increases of the loan. GPM loans with 7.5% annual payment increases offer the lowest qualifying rate but the largest amount of negative amortization. On a loan of $150,000, with a 30 year amortization and a note rate of 10.50% with 12.5% annual payment increases, the negative amortization continues for 60 months. The qualifying rate is 5.75% and the negative amortization is 11.34% (approximately $17,010). The note rate of a GPM is traditionally .5% to .75% higher than the note rate of a straight fixed rate mortgage. The higher note rate and scheduled negative amortization of the GPM makes the cost of the mortgage more expensive to the borrower in the long run. In addition, the borrowers monthly payment can increase by as much as 50% by the final payment adjustment. The lower qualifying rate of the GPM can help borrowers maximize their purchasing power, and can be useful in a market with rapid appreciation. In markets where appreciation is moderate, and a borrower needs to move during the scheduled negative amortization period they could create an unpleasant situation. Interest Rate Buy Downs The most common buy down is the 2-1 buy down. In the past, for a buyer to secure a 2-1 buy down they would pay 3 points above current market points in order to pay a below market interest rate during the first two years of the loan. At the end of the two years they would then pay the old market rate for the remaining term. As an example, if the current market rate for a conforming fixed rate loan is 8.5% at a cost of 1.5 points, the buy down gives the borrower a first year rate of 6.50%, a second year rate of 7.50% and a third through 30th year rate of 8.50% and the cost would be 4.5 points. Buy downs were usually paid for by a transferring company because of the high points associated with them. In today's market, mortgage companies have designed variations of the old buy downs rather than charge higher points to the buyer in the beginning they increase the note rate to cover their yields in the later years. As an example, if the current rate for a conforming fixed rate loan is 8.50% at a cost of 1.5 points, the buy down would give the buyer a first year rate of 7.25%, a second year rate of 8.25% and a third through 30th year rate of 9.25%, or a three quarter point higher note rate than the current market and the cost would remain at 1.5 points. Another common buy down is the 3-2-1 buy down which works much in the same ways as the 2-1 buy down, with the exception of the starting interest rate being 3% below the note rate. Another variation is the flex fixed buy down program that increase at six month interval rather than annual intervals. As an example, for a flex fixed jumbo buy down at a cost of 1.5 points, the first six months rate would be 7.50%, the second six months the rate would be 8.00%, the next six months rate would be 8.50%, the next six months rate would be 9.00%, the next six months the rate would be 9.50% and at the 37th month the rate would reach the note rate of 9.875% and would remain there for the remainder of the term. A comparable jumbo 30 year fixed at 1.5 points would be 8.875%. Reverse Mortgages A reverse mortgage is a special type of loan made to older homeowners to enable them to convert the equity in their home to cash to finance living expenses, home improvements, in home health care, or other needs. With a reverse mortgage, the payment stream is "reversed." That is, payments are made by the lender to the borrower, rather than monthly repayments by the borrower to the lender, as occurs with a regular home purchase mortgage. A reverse mortgage is a sophisticated financial planning tool that enables seniors to stay in their home or "age in place" and maintain or improve their standard of living without taking on a monthly mortgage payment. The process of obtaining a reverse mortgage involves a number of different steps. The first most widely available reverse mortgage in the United States was the federally insured Home Equity Conversion Mortgage (HECM), which was authorized in 1987. A reverse mortgage is different from a home equity loan or line of credit, which many banks and thrifts offer. With a home equity loan or line of credit, an applicant must meet certain income and credit requirements, begin monthly repayments immediately, and the home can have an existing first mortgage on it. In addition, there is no restriction on the age of borrowers. In general, reverse mortgages are limited to borrowers 62 years or older who own their home free and clear of debt or nearly so, and the home is free of tax liens. Borrowers usually have a choice of receiving the proceeds from a reverse mortgage in the form of a lump sum payment, fixed monthly payments for life, or line of credit. Some types of reverse mortgages also allow fixed monthly payments for a finite time period, or a combination of monthly payments and line of credit. The interest rate charged on a reverse mortgage is usually an adjustable rate that changes monthly or yearly. However, the size of monthly payments received by the senior doesn't change. Some reverse mortgage products also involve the purchase of an annuity that can assure continued monthly income to the senior homeowner even after they sell the home. The size of reverse mortgage that a senior homeowner can receive depends on the type of reverse mortgage, the borrower's age and current interest rates, and the home's property value. The older the applicant is, the larger the monthly payments or line of credit. This is because of the use of projected life expectancies in determining the size of reverse mortgages. Seniors do not have to meet income or credit requirements to qualify for a reverse mortgage. Unlike a home purchase mortgage or home equity loan, a reverse mortgage doesn't require monthly repayments by the borrower to the lender. A reverse mortgage isn't repayable until the borrower no longer occupies the home as his or her principal residence. This can occur if the sole remaining borrower dies, the borrower sells the home, or the borrower moves out of the home, say, to a nursing home. The repayment obligation for a reverse mortgage is equal to the principal balance of the loan, plus accrued interest, plus any finance charges paid for through the mortgage. This repayment obligation, however, can't exceed the value of the home. The loan may be repaid by the borrower or by the borrower's family or estate, with or without a sale of the home. If the home is sold and the sale proceeds exceed the repayment obligation, the excess funds go to the borrower or borrower's estate. If the sales proceeds are less than the amount owed, the shortfall is usually covered by insurance or some other party and is not the responsibility of the borrower or borrower's estate. In general, the repayment obligation of the borrower or borrower's estate can't exceed the value of the property. In general, a borrower can't be forced to sell their home to repay a reverse mortgage as long as they occupy the home, even if the total of the monthly payments to the borrower exceeds the value of the home. Download a Reverse Mortgage Application Refinance Once Then Do It Again When rates fall steadily, refinancing may make sense even if you have done so once already. Bob and Michelle Barbo of Kirkland, WA refinanced twice within three months in 1998. In October, they trimmed the rate on their 30-year fixed mortgage by a full point -- from 9.13% to 8.13% -- for a monthly savings of $63. Plus, because home prices in their area had boosted their home equity, they were able to stop paying private mortgage insurance that cost them $120 a month. To exploit continued decline in rates, the Barbos refinanced again in December. Their new 30-year fixed mortgage is at 7.375%, lopping another $55 off their monthly bill. Since the couple had chosen a no cost refinancing each time, their total out of pocket expenses came to just $400 in appraisal fees. So by the time you read this, they will already have recouped their up front costs. "Now we can use the savings to build up a cash emergency fund," says Bob. If you are considering a second refinancing, don't overlook this potential tax write off: When you pay points to refinance, you must deduct the amount over the life of the loan, usually 30 years. But when you refinance a second time, all of the points that have not yet been deducted from the first refinancing can be written off in a lump sum. Say you refinanced to a 30-year mortgage in 1993 and paid $3,000 in points. By now, you would have written off roughly $500. If you refinance again this year, you could deduct the remaining $2,500 on your 1998 tax return. For a homeowner in the 28% tax bracket, that works out to a savings of $700 -- enough to offset some or all of your costs this time around. Build Home Equity Faster Many borrowers use a refinance to shorten the term of the mortgage. And brace yourself, even at low rates, a shorter term means a higher monthly payment. The benefit is that you'll build up equity faster and pay far less in total interest over the life of the loan. Consider Jim Neill, 48, a real estate broker and his wife Merrilyn, 55, a psychotherapist. Recently, the couple took out a 15-year fixed rate loan at 6.75% to replace an 8.13% ARM with a 30-year term. Their monthly payment jumped by $200, but now they will own their own home outright by the time they retire. In addition, the total interest on the 15-year loan will come to $95,447, vs. $222,234 on the remaining life of the ARM -- and that assumes their adjustable rate would have held steady at its current 8.13%. "This is forced savings," says Jim. "When we retire, we can scale down and take equity out of the house." If you can't afford the payments on a 15-year mortgage, your next best means of building equity is to refinance for less than 30 years. To do so, ask your mortgage company to customize your new loan's term to match the years that are left on your old loan -- if you are five years into a 30-year mortgage, for example, ask for a 25-year loan. Get Your Hands on Some Cash Another way to make a refinance work for you is to refinance for more than the balance remaining on your old mortgage -- in effect, tapping your home equity, or "cashing out," in mortgage speak. Thanks to favorable rates, you may be able to do so without boosting your monthly outlay. For example, at 8.5%, the payment on a $200,000, 30-year fixed rate mortgage is $1,538. But at 7.5%, that same payment lets you borrow nearly $20,000 more. The best use for the extra cash is to pay off any higher rate loans you may have. Let's say that you are carrying a $15,000 car loan at 10% and making minimum payments on a $10,000 credit card balance at 17%. Your monthly payments on those debts would total $680. Then assume you refinanced your mortgage, taking out an additional $25,000 to pay off your car and credit card loans. Result: At 7.5%, your additional monthly mortgage payment would total only $175, so you would come out $505 ahead ($680-$175=$505). Of course, all the extra cash needn't go for paying off debts. When the Menards swapped their ARM for a fixed rate last December, they also increased their mortgage load by $34,000, from $106,000 to $140,000. They used $3,000 of the proceeds to pay their refinancing costs and another $17,000 to pay off a 10% home equity loan, which had been costing them $250 a month. Then they spent the remaining $14,000 to build a garage for Roger's antique car collection -- and they did all this for just another $19 a month. Paying Points for a Lower Rate In refinancing, a mortgage company usually offers a range of interest rates at different amounts of points. A point equals one percent of the loan amount. For example, three points on a $100,000 mortgage loan would add $3,000 to the refinancing charges. Analyzing various interest rates and associated points may save you money. As a rule of thumb, each point adds about one eighth to one quarter of one percent to the interest rate the mortgage company is offering. Generally, the lower the interest rate on the loan, the more points the lending institution will charge. Some companies offer refinancing with no points, but generally charge higher interest rates. To decide what combination of rate and points is best for you, balance the amount you can pay up front with the amount you can pay monthly. The less time that you keep the loan, the more expensive points become. If you plan to stay in your house for a long time, then it may be worthwhile to pay additional points to obtain a lower interest rate. Some companies may offer to finance the points so that you do not have to pay them up front. This means that the points will be added to your loan balance, and you will pay a finance charge on them. Although this may enable you to get the financing, it also will increase the amount of your monthly payments. Consider Other Mortgage Programs If you are thinking about refinancing your mortgage, you might want to consider other types of mortgages. For example, you might want to look into a 15-year fixed rate mortgage. In this plan, your mortgage payments are somewhat higher than a longer-term loan, but you pay substantially less interest over the life of the loan and build equity more quickly. (Of course, this also means you have less interest to deduct on your income tax return.) You also might want to consider refinancing if you have an adjustable rate mortgage with high or no limits on interest rate increases. You might want to switch to a fixed rate mortgage or to an adjustable rate mortgage that limits changes in the rate at each adjustment date as well as over the life of the loan. If you decide to apply for refinancing with a particular mortgage company, and if you do not want to let the interest rate "float" until closing, get a written statement to guarantee the interest rate and the number of discount points that you will pay at closing. This binding commitment or "lock in" ensures that the mortgage company will not raise these costs even if rates increase before you settle on the new loan. You also may consider requesting an agreement where the interest rate can decrease but not increase before closing. If you cannot get the mortgage company to put this information in writing, you may wish to choose one that will provide this important information. Most companies place a limit on the length of time (say, 60 days) they will guarantee the interest rate. You must sign the loan during that time or lose the benefit of that particular rate. Because many people refinance their mortgages when rates decline, there may be a delay in processing the papers. Therefore, you may want to contact the company periodically to check on the progress of your loan approval and to see if additional information is needed. Deciding to Refinance Traditionally, the decision on whether or not to refinance has meant balancing the savings of a lower monthly payment against the costs of refinancing. But in recent years, companies have introduced "no cost" and low cost refinancing packages that minimize or completely eliminate the out-of-pocket expenses of refinancing. (These refinancing packages compensate with a higher interest rate, or by including some of the costs in the amount that is financed.) With traditional refinancing, the most often cited rule of thumb is that the interest rate for your new mortgage must be about 2 percentage points below the rate of your current mortgage for refinancing to make sense. However, with the newer low and no cost refinancing programs, it can be worth your while to refinance to obtain a smaller reduction in interest rates. How long you expect to stay in your home is also a factor to consider. If you'll be moving in a few years, the month to month savings may never add up to the costs that are involved in a refinancing. Relocation Considerations Consider this common scenario faced by many employees: Your supervisor calls you into her office on a Friday afternoon and asks you to transfer to the New Jersey office. She says the new job includes a $10,000 increase in salary and loads of potential "in the future." She gives you the weekend to think about it. What do you say? No doubt, a million questions start popping into your head. You've heard New Jersey is expensive to live in. Is $10,000 enough? How much are the houses? What will your property taxes be? What about income taxes? What about your wife's job? Will the kids like it there? Will you like the new job? What is the impact on your career if you refuse the job transfer? According to psychologists, relocation is among the most stressful events that can happen to a person or family. Changing jobs, which often occurs when relocating, is also high on the stress index. For many people the decision to relocate involves a complex set of variables of a financial, personal and emotional nature. These factors contribute to the stress in varying degrees, depending upon the individuals involved. The questions above can be broken down into two broad categories: objective and subjective. The emotional and personal aspects of relocation are subjective and thus difficult to model. Fortunately this is not true of the financial ramifications, which are more objective and easier to quantify. This article will discuss many of the financial variables which should be considered by employers and employees before a relocation decision is made. When deciding on compensation packages for transferred employees, employers often do not consider that each employee is an individual, with unique financial considerations. No two families are alike and a relocation analysis must reflect differences in income tax brackets, housing size, property taxes, spousal income, dependents, etc. Using generic cost of living indices does not produce an accurate calculation of the financial impact of relocating. Using only a customized analysis will produce a true "apples to apples" comparison. The battle cry of the relocating employee is "AT LEAST KEEP ME WHOLE." In other words, the employee should not have to relocate, absorb the emotional stress, and lose money as well. The after tax cash flow should be at least zero. An accurate, individualized, analysis has other benefits for the employer. These are: 1. If the employee is presently living in a high cost of living area, and the employee is moving out of this area to a lower cost of living area the analysis will most likely show a positive cash flow, which will encourage the employee to relocate. 2. Employers in low cost areas will find the analysis useful in encouraging employees to transfer into the area from higher cost of living areas, since the analysis will probably show a positive cash flow. Lower salaries can be justified, and demonstrated to the employee, thus saving expenses. 3. Employers in high cost of living areas can use the analysis for employees moving into the area, from lower cost areas, when cost of living concerns are negatively impacting the relocation decision, and there is a resistance to relocation. An analysis may convince the reluctant employee that the after tax cash flow isn't as bad as they thought. Often, reluctant employees must relocate to high cost areas for career advancement purposes, but want just compensation, calculated in gross salary dollars. A confidential analysis will show an employer how much the employee should be equitably paid, to compensate for cost of living differences. 4. Employers can use the analysis to make sure employees are comparing apples to apples in their relocation decision. Many employees attempt to upgrade their standard of living, usually through unfair housing and community comparisons, at the employer's expense. Most employees and employers perform a very superficial analysis of the financial impact of relocating. This is understandable since it is very complicated from a tax and financial planning point of view. The typical analysis involves a comparison of housing in the new area with the increased salary offer, if any. Or the salary is set based upon a comparison to other employees in similar positions. The effect upon a family's cash flow in the first year after the move is much more complex than this simple analysis. As a result costly errors can be made which affect not only the family's financial health but also their happiness as well. An employee who feels unfairly treated is not as productive and may seek other employment. If the employee is worth relocating he/she is worth fair compensation. After all, if suitable talent were available locally the relocation would be unnecessary. Relocation mistakes result in further relocation and additional stress for both the family and for employers. Performing a proper analysis before a relocation offer is accepted reduces stress by decreasing uncertainty. This allows the employee to evaluate the relocation offer more accurately and provides benefits to the employer by increasing employee happiness and retention. Before describing the financial changes caused by relocation in more depth it should be noted that the analysis should be performed, not just for the relocating employee, but for the entire family. Often relocation can cause major financial changes for spouses, companions, children, dependent parents, and others. Also, all changes should include the federal, state and local tax impact, where appropriate, at the individual's projected marginal rates of tax. The analysis should compare the old salary with the change in family salary, wages, and business income. It should not include changes that would have occurred anyway had the family not relocated, since this would obscure the real cost, and would be unfair to the employer. The change should be net of federal, state, and local (city) income taxes, as well as social security taxes. A common problem experienced by many families, sometimes called the "trailing spouse" problem, occurs when the spouse of a relocated employee experiences great difficulty finding employment in the new area. The analysis should be able to analyze the projected decrease in the spouse's income for the first year after the move. Another area often neglected by relocating individuals is the change in wealth caused by changes in automobile expenses. This can be caused by changes in commuting distances, automobile insurance rates, personal mileage (for example to return home to see friends and relatives, or to access qualified medical care), tolls and parking, use of a company car, or an increase or decrease in amounts paid by employers for business use of your personal car. Some of these changes have tax effects and some do not. Most people underestimate how expensive it is to operate an automobile, probably because the major portion of the expense is depreciation (a non cash item), and because the expenses are paid gradually. Changes in job benefits are often a factor if the employee is changing employers, and occasionally when transferring within the firm. Items to consider here include changes in medical insurance, life insurance, plans, and other perquisites such as day care. Changes in state and local income taxes should be included, net of federal tax effects. The family's income should be recalculated using the tax laws of the new state, and city (if there are city income taxes). Consideration must be given for employees choosing to live in one state and work in another, such as the millions of people who live in New Jersey and work in New York. In such cases they will pay non resident income taxes in the state they are working in. Most states have reciprocity agreements to prevent double taxation, which permit residents to deduct taxes paid to other states. Changes in housing costs are, of course, a major item. It is important to make valid, meaningful, comparisons when comparing housing costs between areas. For example, comparisons should be made which compare the same size houses (square footage) . Also included should be the real estate taxes, and rent, if the individual is not buying. Of course, the federal income tax impact of these changes should be included. Another factor to be considered is the change in interest rates caused by exchanging the old mortgage for a new one. If the employee is buying a cheaper house in the new area he/she may incur federal and state capital gains taxes. This tax should not be included in the analysis because it occurs only once, and should not be part of the calculation of ongoing salary. Of course, the employee should be reimbursed for this tax, since the relocation caused the imposition of the tax. Likewise, if the relocation causes the family to have to sell investment real estate, a partnership, or stock in a closely held business then there will be capital gains or losses incurred because of the realization of gains or losses on the sale of these assets. Distance or increased job responsibilities may require that these investments be sold. If the family wishes to compare owning vs. renting, or renting vs. owning, the analysis should be able to do this, although it may not be a fair comparison for negotiation purposes. Finally, the analysis should not include the cost of moving household belongings, travel expenses including meals and lodging for the family, temporary living expenses in the new area, pre move house hunting trips, real estate agent's fees, legal fees to buy and sell houses, points to payoff an old mortgage or secure a new mortgage, and redecorating expenses. These expenses are one time expenses which will not repeat in future years, and therefore should not be included when calculating salary. Of course, the employee should be reimbursed for these expenses, but if the purpose of the analysis is to show gross salary equivalents then moving expenses should be excluded, since they are not recurring. Most employers will pay some or all of these expenses, but it is wise to be specific about what will be reimbursed. The reimbursement of deductible expenses is not taxable, while the reimbursement of non deductible expenses is completely taxable. Therefore the employee must be reimbursed for federal, state, local, and social security tax impact on the portion of the reimbursement which is non deductible. This is called a tax gross up payment. Since the tax gross up payment is also taxable the calculation becomes a little complex. Many employers do not calculate this amount correctly. They usually do not reimburse for the state, local and social security tax impact and they assume all taxpayers are in the same tax bracket. This article has highlighted the important financial variables which should be considered when making salary offers to employees who are relocating. An analysis based upon a superficial comparison of cost of living indices does little to reduce the very significant stress associated with relocating and changing jobs. The analysis must be individualized to each family, since families have different financial profiles such as different incomes, house sizes, etc. Relocation can be a significant financial planning tool when relocating to a lower cost of living area, which can increase cash flow and provide significant lifetime benefits which will help employees achieve their financial goals. A thorough analysis will not only reduce pre move stress by eliminating financial uncertainty but will increase post move happiness for all involved. Selecting a Relocation Professional To begin your search for the right person to represent you in a home sale, ask a colleague or friend for a recommendation, preferably someone who has used the real estate agent's services. You want an agent who is familiar with home sales in your price range and in your neighborhood. It is essential that you feel comfortable with the agent during an interview since comfort level and good communication are very important. During your interview, don't hesitate to ask the agent about the number of homes the agent has listed and actually sold. The length of time the agent has been in business is not necessarily the best yardstick. Make sure to ask about their commission fees as well. These fees will average 6 percent to 7 percent but may be negotiable. Remember, the agent you choose is going to be one of your main sources of information. A good agent will advise you and guide you in many ways. Look for a representative who is pursuing sales, returning telephone calls, aggressively working in your best interest and whose only job is real estate. Interview Checklist * How often will you promise to call or write me with activity on the home? * I would like to have a list of your satisfied clients (of comparable properties) as references. * Describe your history of real estate sales. Most agents sell just 30 percent to 60 percent of their listings before the listings expire. Choose an agent who sells 85 percent. * What percentage of the asking price, on average, have you received for the homes you've sold during the last year? * What is the average number of days your listed homes stayed on the market? * Why should I pick you over all other agents? VA Loan Eligibility How do I apply for a VA guaranteed loan? You can apply for a VA loan at any mortgage company that participates in the VA home loan program. At some point, you will need to get a Certificate of Eligibility from VA to prove to the mortgage company that you are eligible for a VA loan. How do I get a Certificate of Eligibility? To get a Certificate of Eligibility, you need to submit form 26-1880, Request for Determination of Eligibility and Available Loan Guaranty Entitlement. A copy of the form can be obtained by calling 800-827-1000. Send it to any VA Regional Office. You must include a copy of your DD-214 with the form 26-1880. If you are on active duty, you must submit a statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters showing date of entry on your current active duty period and the duration of any time lost. I have already received one VA loan. Can I get another one? Yes, depending on the circumstances. If you have paid off your prior VA loan and disposed of the property, you can have your entitlement restored for additional use. To obtain restoration of entitlement, you must send VA a completed VA Form 26-1880, along with evidence that the property has been disposed of and the loan repaid in full. This evidence can be in the form of a payoff statement from the former mortgage company, or a copy of the HUD-1 settlement statement completed in connection with the sale of the property. The application can be presented to any VA Regional Office. A veteran can also obtain restoration of entitlement, on a one time basis, if the prior VA loan has been paid in full but the property has not been sold. I have sold the property I obtained with my prior VA loan on an assumption. Why can't I get my entitlement restored to purchase a new home? In this case the your entitlement can be restored only if the assumer is also an eligible veteran who is willing to substitute his or her entitlement for that of your original entitlement. Otherwise, you cannot have entitlement restored until the assumer has paid off the VA loan. My prior VA loan was assumed, the assumer defaulted on the loan, and VA paid a claim to the mortgage company. VA said it wasn't my fault and waived the debt. Now I need a new VA loan but am told that I am not eligible. Why not? or My prior loan was foreclosed on, or I gave a Deed in Lieu of Foreclosure, or VA paid a compromise claim. I was released from liability on the loan and/or the debt was waived. Can I get another VA loan? Although the your debt was waived by VA, the Government has still suffered a loss on the loan. The law does not permit your entitlement to be restored until the loss has been repaid in full. If you are having problems on your real estate investment, Invesloan is here to assist you with your financing source! We will make sure that you will be successful in any of your real estate goals! Here at Invesloan, we truly understand that being a real estate investor, you will surely have specific financing needs for the best resources. As your most trusted real estate investor, Invesloan is committed in providing you the best total solution for reaching your investment goals. Invesloan is your one stop real estate investor especially if you have specific needs. At the same time, we are also a team of experienced real estate financing professionals who strive to give our clients the best total solution for your individual real estate investment financial needs. Invesloan is actually licensed in California, Colorado, Hawaii, Kansas, Missouri, Texas and Washington that why most of our clients are sure about their loans acquired from us. If youe not yet satisfied with our license from the stated cities, we are also perusing the licensing of other states and will eventually update our offerings accordingly. With more than 400 institutional investors, Invesloan is also capable of being a correspondent lender and broker. In this manner, it will also allow our team to design and offer programs that will definitely satisfy your specific investment goals. If you are also worried of being pre qualified by your investor, we can actually provide you with our multi-step service. This process will actually ask you series of questions and then provide you with mortgage payment and ratio calculations that will help determine your home purchase or refinance prequal status. You may use our custom prequal analysis especially if you want to request for a prequal. As soon as you ask for this kind of request, you only have to send it to our staff of mortgage professionals. We can actually provide you with residential or even commercial investment loans. In a residential investment loan, you may choose between a short term and a long term investment financing solutions. The short term investment actually takes six months or less. This option will give you up to 100% loan to value leverage financing, prime or sub-prime credit status, no pre-payment penalty, low fixed or adjustable interest rates and financial negotiation assistance. On the other hand, you may also choose our more than 6 months of investment. This will give you the opportunity to get up to 100% loan to value leverage financing, specialty programs for maximum cash flows, low fixed or adjustable interest rates, prime or sub-prime credit status and financial negotiation assistance. When it comes to commercial investment loans, we actually finance various establishments. This includes multi-family or apartment complexes, mixed use, office, retail, warehouse, self-storage, mobile home Park, funeral homes, rooming house, day care, hotel or motel, campground, bar or restaurant, and many more. The best things that our commercial investment loan offers are the stated income or stated asset of a particular price up to 90% combined loan to value financing. This also includes full documentation of up to 95% combined loan to value financing. With this kind of investment loan, you may also have the lowest commercial interest rates on the market plus financial negotiation assistance. For your total guarantee, you may already request an application where you can acquire a full secure 1003 application and other forms through the use of our online application library or even by phone. For other information and inquiries, you may also check out other topics like your initial meeting with a mortgage professional, after the mortgage application, speed up the mortgage process and escrow account basics.

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HUDC Apartment Flat (Maisionette, high/low rise Apt) for Sale

HUDC apartment flat posted by realtors or agents here in this MLS (Multiple Listing Service) are all willing co-brokers. Hence our network with them are a lot easier to address your need to buy a HUDC unit. You can find Maisionette, high rise or low rise HUDC apartment flat for sale here.

You may explore those Ads by Google, or use our top right's Google Search to find relevant HUDC apartment for sale or rental. These expand also your global reach to international and regional property market as well as Singapore property agencies, developers and realtors, including those non co-brokers, where you can deal with them direct. Call us if you need help.

When you email us, please include your captured choice properties (highlight the listing, right click copy & paste), indicate your brief profile, choice criteria, your CONTACT & BUDGET. We response promptly if you need URGENTLY with REALISTIC budget. If you've seen unit in captured listing, let us know so that duplicate viewings can be avoided. Thanks in advance !
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Landed Houses (Bungalow, semi-detach, inter/corner terrace) for Rent

Landed housimg properties posted by realtors or agents here in this MLS (Multiple Listing Service) are all willing co-brokers. Hence our network with them are a lot easier to address your need to rent or lease a landed house property. You can find bungalow housing, semi-detached house, inter or corner terrace house for rental, leasing here.

You may explore those Ads by Google, or use our top right's Google Search to find relevant landed housing for sale or rental. These also expand your global reach to international and regional property market as well as Singapore property agencies, developers and realtors, including those non co-brokers, where you can deal with them direct. Call us if you need help.

When you email us, please include your captured choice properties (highlight the listing, right click copy & paste), indicate your brief profile, choice criteria, your CONTACT & BUDGET. We response promptly if you need URGENTLY with REALISTIC budget. If you've seen unit in captured listing, let us know so that duplicate viewings can be avoided. Thanks in advance !


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Landed Houses (Bungalow, semi-detach, inter/corner terrace) for Rent

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