Saturday, September 30, 2006
Brokers or Lenders — Which Do You Want for Your Real Estate Mortgage?
Brokers generally are self-employed professionals, who work to secure a real estate loan for you. They work through a variety of lenders and earn a fee for the transaction. Most of the mortgage lenders who advertise on the Internet are brokers.
Loan officers are employees of a bank, credit union, or other lending institution, such as a mortgage company. They sell and process mortgages and other loans only for their employers. They are usually local and in a physical location.
There are advantages and disadvantages in using both brokers and loan officers for your real estate purchase, so you need to shop for the one that is right for you and your particular circumstance.
Brokers
The advantages to using a mortgage broker for your real estate purchase are many. Usually, the better deal they get for you, the buyer, the more they are paid on the transaction — a big plus for you. If your local bank, mortgage company, or credit union has refused you a loan, a mortgage broker may be able to find a lender, even if you have bad credit — just expect to pay a higher interest rate. If your real estate is unique or commercial property, using a mortgage broker to secure a loan is at times easier and faster.
One downside of using a mortgage broker is that your mortgage loan will be sold to another lender immediately after closing. Another is that brokers choose to do either non-conforming loans, which are higher risk and usually higher interest rates, or conforming loans. This limits your loan options. Brokers do not have to disclose a “good faith” estimate on what closing costs will be, nor are they regulated by the Fair Credit Act. Additionally, they seldom have a physical office with employees offering you face-to-face customer service, and they generally are in another town or state than where your real estate is located. This means they may not understand the local market in which you purchased your real estate. Important issues may arise from the real estate classifications and terms used by your appraiser, for example.
Loan Officers
Though loan officers offer a variety in the types of loans available, you are limited to only those products offered by one institution. Usually a local institution, the loan officer will be familiar with all local regulations and issues will not arise over lack of knowledge in local market terminology.
Banks and Mortgage Companies
Bank and mortgage company loan officers will give you face-to-face customer services, at least before the closing. Like brokers, banks have the option of selling real estate loans on the secondary market. Some banks sell only low-end mortgages or those that require too much servicing with little return. Some sell the loan but keep the servicing portion, making it appear that your mortgage continues to be owned by the bank or mortgage company. They are required, however, to tell you during the initial paperwork if your mortgage may be sold. I suggest you ask before you ever get to that point, if this is a deal breaker for you.
Bank and mortgage company loan officers are licensed and must meet certain criteria. They have more criteria that you must meet, as well, in order to secure a loan (banks usually require the most). Many real estate buyers are refused mortgage loans by these institutions. Both banks and mortgage companies generally do offer better rates and terms. They also must disclose a good faith estimate on what closing costs will be, and they are regulated and audited under the Fair Credit Act.
Credit Unions
You must be a member of a credit union to apply for a loan with them. Many credit unions do not offer real estate loans. The major advantage of securing a loan from a credit union is that they pass on only actual costs of the loan to you — no broker fees or commissions. They also never sell their loans on the secondary market, they always are local, and give you continuing face-to-face customer service.
What to Do
The time to begin looking for a mortgage lender is before you begin looking at real estate. Ask family and friends for referrals, as well as their experience with the real estate lender. Ask your real estate agent for referrals. Then, contact each prospective lender and ask questions — lots of questions! Compare interest rates, terms, after the closing mortgage sale policies, and what criteria do they require that you meet in order to qualify for a real estate loan.
If you are a residential real estate buyer, consider getting pre-approved for a loan. You will know exactly what you can afford to buy, which usually turns out to be much more than you expect.
Spend as much time shopping for a mortgage lender as you will for your real estate. The deal you get can save or cost you thousands or even millions over the life of the mortgage. Get the best deal possible, as well as the right lender for your real estate purchase.
__________________________________________________
GetSmart Calculators & Articles (Click Here!)
Directory: http://www.articledashboard.com
John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more on San Diego Homes for Sale visit www.twtrealestate.com http://pickamortgage.com
Thursday, September 28, 2006
Manufactured vs. Modular Homes: Understanding the Definitions and Differences Between These Types of Homes
Are you looking into purchasing or refinancing a modular or manufactured home? Knowledge of the basic definition of each type of home is essential to finding the right loan.
Modular homes are built in sections, or modules, in a factory. The modules are then delivered to the home site on large trucks and assembled by local builders. State, local, and/or regional building codes must be followed while building the home.
Manufactured homes, historically called mobile homes, are built entirely in a factory. They must comply with a federal building code called the Federal Construction Safety Standards Act. This act, instituted in June 1976, requires that manufactured homes be constructed on a non-removable steel chassis. Many areas have restrictions regarding where manufactured homes can be located.
In terms of financing, obtaining a mortgage for a modular home is not much different than for a site-built home. (A site-built home is one that is built from the ground up on the site of the home). In each case, a construction loan is acquired. These are short-term loans for the material and labor costs of constructing the home. After the house has been completed, the construction loan can be turned into a traditional home loan. The biggest difference between site-built and modular home construction loans is the length of time of the loan. For modular homes, it is usually a 3-4 month timeframe, whereas, site-built construction loans average about 6-12 months.
A manufactured home may require more legwork to find the right lender. Lenders take into account square footage, meaning whether the home is single, double or triple wide. Mobility is another factor. If your home is truly mobile and you do not own the land underneath the home, financing may be more difficult to obtain. In addition, manufactured homes built prior to 1976 may not comply with the Federal Construction Safety Standards Act and will, therefore, be very difficult to finance or refinance.
Traditionally, most lenders viewed manufactured homes as personal property, much like a car or RV. These loans tend to have much higher interest rates than home loans. Today, there are lenders out there who will provide manufactured home loans at more affordable interest rates. To find the loan that is right for you, it is important to shop around. Although the community in which you are buying may offer financing, don’t feel that you are obligated to take it.
__________________________________________________
Buying a new house giving you a headache? Don’t let the interest rate turn it into a migraine. Go to CompareLenders.com! (Click Here!)
__________________________________________________
Directory: http://www.articledashboard.com Jennifer is an author who has produced many helpful mortgage related articles: Modular Home Equity Loan Financing & Bad Credit Mortgage Loans. If you need more information for first and second mortgage refinancing, check out Manufactured Home Refinance. http://pickamortgage.blogspot.com
Wednesday, September 27, 2006
Timeshares an Option for Vacationers
(MS) - Nearly everyone would love to own their own vacation home, a place where they can jet off to escape the daily grind for a week or two at a time before returning home refreshed and ready to get back to work. However, with escalating real estate costs and property taxes increasing nearly everywhere, the notion of owning one home, let alone two, is daunting enough for most people.
That reality does not necessarily mean your own slice of vacation heaven is out of your reach. For many, purchasing a timeshare has provided them with the comforts of a vacation home but less of the overall responsibility. Timeshares can occur in a variety of situations. They could be a house or condominium that you share with others. Or, you can purchase a room in a resort for use. For those considering a timeshare as a vacation option, here's a breakdown, courtesy of the Federal Trade Commission, of the different timeshare ownership options available.
Deeded Timeshare Ownership
When you purchase a timeshare, you own the same unit for the rest of your life or for a fixed period of time decided upon and designated in your purchase agreement. Legally, you are considered an owner, and you can rent, sell, exchange or bequeath your unit if you so choose. You as well as the other timeshare owners are all legally looked upon as the owners of the unit. In a deeded ownership, you purchase the right to use the same unit at a specific time each year.
The ownership rights associated with a deeded timeshare entitle timeshare owners to elect a homeowners' association, which in turn is responsible for maintenance and management of the resort. Annual maintenance fees are required of timeshare owners, and these fees typically rise each year. Though the maintenance fees might include property taxes, sometimes those are extra. Before signing on, you should discuss what the annual maintenance fees are and what, if any, additional property taxes come with your timeshare.
"Right to Use" Vacation Intervals
In these, you are not purchasing the timeshare as property and not viewed as an owner. Rather, you purchase the right to use a unit owned by a developer. Each unit is broken up into intervals, and these are usually designated in terms of weeks. When you purchase your interval, you do so by agreeing to use it for an agreed upon number of years, typically between 10 and 50 years. Whereas in a deeded timeshare ownership you use the same unit each year, that is not necessarily the case with intervals. Maintenance fees, which rise each year, do apply and the interest you hold on the property is legally considered personal property.
There are several options under the "right to use" agreement that can affect when you can have access to your timeshare.
· Fixed time option: This is when you purchase the timeshare for use during a specific week each year.
· Floating time option: This is when you purchase use of the timeshare during a specific season (i.e., summer, fall, etc.) each year, but not a specific week. Therefore, weeks are usually assigned on a first-come, first-serve basis.
· Fractional Ownership: In lieu of buying one week per year, you buy a large share of ownership time, which can often be up to half a year.
· Biennial Ownership: This is when you purchase time on an every-other-year basis.
· Lockoff or Lockout: Many timeshare units are often very large and spacious, space that not everyone necessarily needs. Under a lockoff or lockout agreement, you occupy only a portion of the unit while the rest is offered for rental or exchange.
· Points-based: These can be called a vacation club, where you purchase points and exchange them to use at a variety of resorts. Different units require varying amounts of points, with larger units and longer stays typically requiring more points. Also, the specific time of use, such as the height of vacation season, can determine how much points and interval costs.
______________________________________________________
RECOMMENDED READING
The Everything Family Guide to Timeshares: Buy Smart, Avoid Pitfalls, And Enjoy Your Vacations to the Max! (CLICK HERE!)
__________________________________________________
http://pickamortgage.blogspot.com/
Sunday, September 24, 2006
Home Value Experts Warn: Think Before You Improve!
Misunderstanding your home's value could lead you to make wrong or costly decisions
Make home improvements that will offer the best return on your investment. Even a simple paint job can refresh a room and make it more inviting.
(MS) - Most Americans watching mortgage rates rise are deciding that now is the time to buy or sell before it's too late. Whether you want to sell, or just improve your home's value before you tap into your equity, here are five things experts suggest you consider before calling your bank or putting the "for sale" sign on your lawn.
Make Only Renovations That Count. Experts agree that the right renovations, especially bathrooms and kitchens, affect the marketability of your home. Bathrooms have become a popular remodeling choice, and for good reason - they have the highest rate of return of any home addition or home remodel. Real estate agents agree that a gleaming kitchen with state-of-the-art appliances, cork or hardwood flooring, stone countertop and lots of cupboard space can sell a house the instant a prospective buyer sees it. Conversely, a cramped, ill-lit kitchen with outdated linoleum and harvest gold appliances might actually scare buyers away.
Improve What You Can't Renovate. If you can't afford to renovate, update and refresh key rooms instead. Replacing an old countertop, repainting cupboards and walls, and installing new door pulls and lighting make big improvements to your kitchen for a very modest price. Similar touches increase the appeal of older bathrooms, too. Fresh paint throughout your home is another low-cost, high-return project - it makes everything look cleaner and brighter, and buyers love a house they won't have to redecorate immediately.
Maintain Where You Can. Depending on the age of your house, you can expect to spend between one and three percent of its value every year on maintenance and repair. Your maintenance budget should increase as your house ages, so remember to include funds to replace major systems as required. Foundations and roofs are things that are difficult to inspect,but in the long run minor repairs can save you about ten times the cost of work necessary to replace or rebuild.
Don't Overimprove. Before you commit to any big project, ask, "Is this three-car garage or pool out of character for my neighborhood?" If the answer is yes, you may be consigning your house to an oddity status. If your house is improved beyond the scope of all the neighborhood homes that surrounds it, it is likely that the value of your home won't be realized when it comes time to sell.
Do Your Home Value Homework. Many sites promising to give you the value of your home don't deliver, but at www.domania.com you can use their Value Check tool to get an instant valuation from a real estate professional that includes a value range and neighborhood statistics. If you want to "value it yourself" at Domania, you can search through their database of 28 million historical home price records. Searching by price, by location or by address, you'll develop a better understanding of neighborhood trends - and if you look hard enough - what your neighbor paid for their house.
FUN SITE:
Find Local Remodelers Free Estimates - Kitchen, Bath, additions, more.(CLICK HERE!)
Until Next Time!
Jasmine
http://pickamortgage.blogspot.com
Monday, September 18, 2006
Zoning Laws Can Dictate Home Improvements
Zoning laws are designed to regulate what a person can and can't do with their property when it comes to building. These govern building issues with respect to height, use, bulk and density. Zoning regulations can change quite often, depending on how much your community is changing and developing. Generally, these laws won't prohibit you from making renovations that are consistent with your existing house. For instance, if you live in a residential neighborhood and were hoping to add a bedroom onto your house, the zoning restrictions with regards to use shouldn't be a concern. However, if you intend to add a room onto your house such as a shed or a detached garage, there could very well be existing laws that prohibit such add-ons.
Typically, the zoning laws you'll want to pay most attention to are those addressing height and bulk. If you're hoping to raise the roof of your home and add upwards, this might be illegal, as it could negatively affect the property value of your neighbors by making their homes seem less valuable. Should such laws exist but you still harbor the desire to build up, you can apply for a variance, which can be a costly endeavor that may or may not work out in the long run. A variance is essentially an exception to the zoning regulations, one that will allow you to renovate as you choose regardless of existing laws. Getting your local zoning board to grant you a variance, however, is no small task. If you're really set on making a home improvement that doesn't comply with zoning regulations, you'll likely have to hire a lawyer and possibly even an architect or engineer to prove you need the variance. But even a lawyer and the testimony of professionals do not guarantee yourzoning board will grant you a variance.
It's also important to note that you'll need a variance should you decide to change the use of your home. For instance, if your home is defined as solely residential but you choose to turn part of your home into a doctor's office or even a law office, you won't be allowed to do so without first being granted a variance from the local zoning board.
Before building onto your property, it's also beneficial to know the setback distance, or the mandated distance between the building area and the property line. Such distances are established for a number of reasons, not the least of which is to provide you and your neighbors with privacy so all parties don't feel as though they're sitting in each other's laps when in the privacy of their own homes. Such regulations also exist to address accessibility and ventilation concerns. The setback distance should be included on your property's survey plat, which you should have received when you purchased your home. It is essential you know the setback distance before doing add-ons of any sort, as violations of the distance can result in you being forced to remove them entirely, a costly mistake that can leave you on the hook for several thousands of dollars.
Another thing to consider is whether or not you have any easements or deed restrictions on your property, which can negate your right to build any add-ons. Again, if there are any of these on your property, they should be listed on your survey plat. An easement is essentially a restriction on your property that exists to provide easy access to utilities or other services. Typically, an easement is placed on a property by the government, meaning they are the lone people allowed to build on a designated area. This doesn't necessarily mean they will build on that designated area, but they and only they have the right to.
A deed restriction essentially limits what you can do with the property. Typically, a deed restriction is a condition of sale set forth by the previous homeowner in order to protect certain areas of the property such as wetlands or wooded areas. Your municipality can also put a deed restriction on your property to prohibit further development. Neither of these should come as a surprise, though, as they are typically conditions the seller informs prospective buyers of immediately.
While you might have purchased your home with visions of creating a contemporary castle, it's good to keep in mind just how grandiose you can make your new digs likely relies less on your wallet and more on your town's zoning laws.
LendingTree Home Equity Loans (Click Here!)
Until next time!
Jasmine
http://pickamortgage.blogspot.com
Saturday, September 16, 2006
Good Faith Deposit – Real Estate Transactions
Good Faith Deposit
If you are selling your home, condominium or other real estate, you should always require a buyer to make a good faith deposit. The good faith deposit simply establishes that the buyer is serious and, to some extent, has the financial capacity to follow through on the purchase.
The amount of the good faith deposit is dependent upon the agreed sale price of the real estate. Although percentages vary from state to state, a cash deposit equal to three percent of the sales price is typical. For instance, the deposit would be $9,000 for home selling at a price of $300,000. As with most transactions, this percentage is negotiable. I don’t recommend that you accept anything less than two percent.
Once the buyer and seller agree to the amount of the good faith deposit, you have to figure out what to do with the deposit. Importantly, the seller should not hold the deposit as doing so could make the buyer very uncomfortable. Instead, the money should be deposited with a third party and held “in trust.” Potential third parties include escrow and title insurance companies as well as an attorney if your state requires their involvement.
A good faith deposit acts like an insurance option for a seller. Moving through escrow can take 30 to 60 days, during which the property is off the market. The good faith deposit essentially compensates the seller for this time in the event the buyer is unable to follow through on the purchase of the property.
Depending on the laws in your state, a buyer who can’t close will lose the deposit. Typically, the only exception to this is when the seller allows language indicating the deposit will be returned if the buyer can’t get a home loan. Of course, including such language can open the seller up to repeated frustration when bad credit buyers repeatedly fail to get funding.
Good faith deposits are a fundamental part of a real estate transaction. Buyers should expect to pay them and sellers should demand them.
Recommended Site:
America’s Lending Partners’ free loan request service will match you with up to four lenders to help you lower your interest rate.
Jasmine
Raynor James is with http://www.fsboamerica.org- an online listing site for real estate. Sellers list your home for sale for free for one month. Home buyers get total access for free. Source: ArticleTrader.com http://pickamortgage.blogspot.com
Friday, September 08, 2006
Real Estate Q & A
Q. My property went into a sixty day escrow. The escrow amount was $3,000.00. Five days prior to closing the buyer's agent notified me that the contract would be cancelled due to the fact that the property did not appraise for the agreed upon value. Is the buyer's escrow forfeited?
A. In any situation, you must first turn to the closing contract itself. You should look for deadlines for certain things to occur, such as appraisals. Did this appraisal occur after the deadline? Were any other terms involving deadlines not met by the buyer? This will give you some insight as to whether or not the escrow monies must be returned. A general rule of thumb is that escrow monies cannot be released without the consent of all parties.
Q. We had a closing date set. I have just been informed that the seller is requesting a delay in the closing date. Do I have legitimate grounds for renogiation of the purchase price?
A. The reasons that a seller may wish to delay closing may vary, from the legitimate to outright procrastination. If you attempt to renegotiate the purchase price, it may be considered as a new offer, which replaces the original offer. This may therefore void the original offer and all terms negotiated pursuant to that offer. The safest way to approach this is to simply ask yourself if you are willing to wait for the property at the originally agreed upon price.
Q. I am purchasing a property. The seller has not found a replacement property, and has requested an extension of the escrow period. If I do not agree to the extension, do I lose appraisal and inspection fees, as well as my deposit?
A. The deposit will likely be refunded less a small cancellation fee. The appraisal and inspection fees will most likely be lost. If you agree to the extension, be sure to place deadlines on the seller, such as a time by which a replacement property must be found.
Q. I decided to purchase a particular home, however I have now changed my mind. How do I go about cancelling the contract?
A. A contract is a legal document which you have made with the seller. Cancellation for certain reasons may be allowed, however cancellation on the sole basis of "changing your mind" will likely come with ramifications. You should strongly consider these ramifications prior to backing out of the deal. You should consult an attorney regarding your potential liability in this situation. Typically, a contract cannot force parties to a transaction, however you may be responsible for paying damages to the seller. These damages can take many forms, including the lost opportunities that the seller missed as the result of taking his or her home off the market.
Q. I signed a contract to sell my home. Now I have changed my mind and want to keep the property. Must we sell our home?
A. Again, the first thing to do is to look at the legal document itself. Look for contingencies which will allow you to back out of the transaction. The buyer may decide to enforce the contract in court. You should consult an attorney. It would be wise to make the cancellation more palatable to the buyer by compensating him or her for all of their out of pocket expenses, and maybe an additional amount for their time and effort in negotiating the transaction.
Q. I made an offer on a property. The seller came back with a counter offer. May the seller subsequently sell the property to another buyer?
A. Typically, the seller is free to sell the property to the first buyer who accepts an offer. If you have not accepted the counter offer, chances are the seller is free to do as he or she pleases.
Q. Can I negotiate the selling price of a newly-constructed home?
A. You can always negotiate the selling price of any real estate. However, the seller of a newly-constructed home is usually not willing to budge on the price, for a variety of reasons, not the least of which is the small profit margin for transactions involving newly constructed homes.
Useful Site:
Jasmine
Catherine Nguyen was born and raised in Dallas, Texas and is a licensed real estate agent. Ms. Nguyen specializes in Dallas real estate and has a career with Renowned Realty Group – Dallas/Ft. Worth RE/MAX.
Source: http://EzineArticles.com/?expert=Catherine_Nguyen http://pickamortgage.blogspot.com
Wednesday, September 06, 2006
Should You Sell Your Home Now
Should You Sell Your Home Now?
If you are worried about real estate values dropping, you need to take a deep breath. Yes, the market is cooling off fairly dramatically. This is not is a sign of impending doom for homeowners. The real estate market goes up and down all the time.
You can look at short period of times and draw all the wrong conclusions. If you looked at just the last five years, you would think that real estate always appreciates at double digit rates on an annual basis. If you looked at the market in the late 1980s, you would swear real estate is the worst investment given the flailing market at that time. Of course, neither short term picture is correct.
The simple fact is real estate has historically been a good investment over time. Yes, we are heading into a cooling off period, but the market will come back. It may take a couple of years or it may take ten. It really does not matter because you will still be building equity in your home by making your mortgage payments. Once appreciation takes off again, you will be in very good shape indeed. If all else fails, you have a place to physically live!
As you can probably tell by now, my recommendation is that you do not sell solely because the market is cooling off. There may be other reasons you feel you need to sell, but do not do it just because appreciation is slowing down.
The only exception to the above advice has little to do with the real estate market and everything to do with mortgages. There are a lot of creative mortgage products on the market these days, to wit, zero interest and low initial payment balloon loans. If you have one of these, you need to evaluate whether you can ride out a dip in the value of your property.
Fun Site:
LendingTree Home Equity Loans (Click Here)
Until Next Time!
Jasmine
Source: http://www.articledashboard.com
Raynor James is with the site - FSBO America - sell your own home. http://pickamortgage.blogspot.com
G!BnM~%24(KGrHqV,!iEE)qn4LlwJBMkCRhM3cw~~_1.jpg)