Calculating your Home Mortgage

The interest rate you pay makes a significance difference in your monthly house payments. If you borrow $100,000, and take out a 30 year loan at 4 percent interest, your monthly payment to cover just this amount will be approximately $477. If the interest rate is 6 percent, your monthly payment jumps to about $600 a month.

Some consumers opt to pay points, to bring down interest rates. A point is one percent of the loan amount. Before paying points to bring down your interest payments, calculate how long it will take you to pay back the cost of points, in interest savings. If you plan to stay in the house 30 years, it may be a smart choice. Yet, if you intend to move within 5 years, it might not be a wise financial decision.

 Private Mortgage Insurance

If you don’t have a large enough down payment, you may be required to pay private mortgage insurance, or PMI. Government regulations require many lenders to limit their loan amount to 80 percent of the home’s value. This means, if you are purchasing a home for $100,000, you will need to put down $20,000 cash. If the house only appraises for $90,000, the lender will only loan you 80 percent of the $90,000 appraised value.

One way to get into a new house with a lower down payment is to purchase private mortgage insurance. The monthly premium is included with your house payment. If you put down just 5 percent instead of 20 percent, the PMI covers the unpaid 15 percent, should you default on your loan. This payment may, or may not be, tax deductable, depending on your financial situation. After you build sufficient equity in your home, there are ways to eliminate PMI.

Two other expenses attached to your new home are homeowner’s insurance and property tax. Some lenders require you have an impound account, which means your monthly house payment includes additional funds to cover these expenses. The lender, rather than the buyer will make the insurance and tax payments. Some borrowers prefer not to have an impound account, and manage this payment separate from the monthly house payment. For some consumers, eliminating the impound account creates problems, especially if they have difficulty budgeting monthly expenses.

If the property is part of a homeowner’s association there may be association fees. This is common with condominiums. The additional monthly fee typically covers maintenance on the grounds and common areas, and may include water and trash expense.

When calculating your home mortgage, remember to consider you loan fees, which are often rolled into your home loan. Once you come to a clear understanding on what you can afford to pay each month, along with your monthly fees, you will be in a better position to start shopping for that new home.

Tracy Suttles Reveals Renting Basics: Tips and Tricks to become an Efficient Landlord

The following is a guest post from Houston, Texas real estate developer and entrepreneur Tracy Suttles.

In any given economy, there are always tried and true measures to finding quality renters for a property. Following these easy steps can assist landlords in locating, keeping, and maintaining a long term relationship with a renter.

Advertising Rental Properties

The first step in the rental process is actually figuring out the best way to advertise the rental property. Online ads, websites such as, newspaper ads, signs, and word of mouth are all excellent tools for finding renters. First, the owner should set aside an advertising budget and then also consider which free tools are available to find a renter.

Once potential renters are found, the next step is to walk them through the rental property and then discuss the rent, the owner’s role in maintenance, and the length of the rental.

Collecting a Deposit and Processing a Credit Check

The first step in the rental process should be a credit check. The owner should create a standard application form that the applicant signs and gives their permission for a credit check. There are many free sites available for landlords to print off applications and process credit checks on renters.

There are also sites that for a small fee will offer credit checks and past rental histories. Sites such as,, and the Landlord Protection Agency or are wonderful resources in order to verify employment, credit, and references.

Once the owner is satisfied with the results of the credit and employment verification process then the next step would be to sign a legal rental contract and collect a deposit. An owner can ask for both the first and last month’s rent for a deposit or ask for just the amount of one month’s rent.

Depending on the value of the property and the maintenance costs, the deposit would consist of an amount that the owner is comfortable with and is also not too costly for the potential tenant.

Signing the Contract and Negotiating the Terms of a Rental

The rental property should be ready to move in and all terms should be discussed up front with the potential renters. The owner should either draw up a legal contract from a legal form (either free or one that requires a small fee to copy) or have an attorney or paralegal assist them with a contract.

All the legalities should be in layman’s terms and the owner should allow the potential renter time to read and examine said contract before signing. If the renter wants to add any stipulations to the contract then they should notify the owner in writing. The owner than is able to add the terms to the contract and both parties will sign.

The owner should take detailed pictures of the property before the renter moves in to ensure that the renter cannot claim that any damage was present before their occupation. There should also be a final walk through by both parties and they should both sign a document that verifies the conditions of the property at the time of possession.

This way both the owner and the renter are protected and any damage that occurs due to negligence on either parties behalf can be dealt with.

Home Mortgage Refinancing for those with Bad Credit

Unfortunately, bad credit is becoming a widespread problem for Americans. The flip side of this is that there is a whole new industry of lenders who specialize in providing credit for the growing population of consumers with bad credit.

Benefits of Home Mortgage Refinancing

The primary reason for refinancing mortgages with bad credit, is usually to lower payments so that the borrowers can restore their credit by getting and staying current on the new mortgage. Lower payments enable cash poor borrowers to better meet the obligation of the mortgage. As borrowers keep payments current on the new lower payment mortgage, their credit score will return to a better level.

Home mortgage refinancing can extend the term of the loan, so that payments are lower. There are some whose credit rating is falling, because the original mortgage is an Adjustable Rate Mortgage and the interest rate has skyrocketed. Even with a higher than average fixed rate caused by bad credit, home mortgage refinancing to a fixed rate might prove to be more advantageous. With a fixed rate mortgage, the borrower is guaranteed that the interest rate will never change.

Guidelines for Refinancing

If one decides to apply for a bad credit mortgage refinance loan it is important to consider a few things. Target a lender that specializes in lending to borrowers with bad credit. They are uniquely qualified to handle these situations and are more likely to work with you to find the best deal. The borrower will not waste valuable time applying with lenders who are not willing to lend to individuals who have low credit scores and want to improve their credit rating.

Get quotes from two to three lenders, but no more. Applying for a mortgage is always stressful, particularly in a situation where the borrower feels that they are at a disadvantage. It is important not to be desperate in the decision process. A mortgage is a product just like a car or house. Even with bad credit, the customer has some negotiating power and does not want to act too quickly in deciding on the lender and terms.


Bad Credit Home Mortgage Refinance is Possible

People who have never been behind on payments are facing job loss and real estate meltdowns that are causing them to fall behind and credit scores to fall. Whatever the reason for having bad credit, refinancing the home mortgage is one solution for calming the storm and helping debtors to get back on their feet.

The Future for Real Estate Agents: Is Selling Real Estate a Dying Profession in this Down Market?

Long gone are the days when one great sale meant you were on easy street for the rest of the year…When joining the “million dollar” club was a rite of passage, and paying big bucks for fancy billboard advertisements meant you’d arrived. Only two years ago, all you had to do was list a property and two days later is was sold at list price or above.

These days listings are languishing on the market for three months, six months, and longer. Buyers are in the driver’s seat and many are opting for discount brokers that charge a flat fee instead of a six or seven percent commission. Is the real estate profession as we know it dead? No, but the days of easy money and quick profits are. Following are tips on how to make it as an agent in today’s market:

  • Focus on buyers.

    For a long time the big money went to agents who maintained a lot of home listings. Now that those listings are sitting on the market and not selling, buyers are in control. By becoming a buyers’ agent, you can use your negotiating skills to help those looking for a home get the best deal possible. First time home buyers especially need assistance in climbing the slippery slope of home ownership. Remember, as a professional you know the market. Use that knowledge to help customers find the best property at the lowest price in the most desirable location.

  • Become a relocation specialist.

    When buyers come from out of town, often they need to find property fast. Trying to navigate the real estate market in a new community can be daunting. You can use your knowledge of the area, the schools and the marketplace to guide them quickly and efficiently. Sure they can get a lot of information on the Internet, but someone who knows every detail about the school systems and has combed every street in the area for years commands a lot of credibility.

  • Preview homes first.

    Now that every single home listing is on the Internet for buyers to see themselves, you need to provide more service than ever before. Get to know exactly what your customers are looking for and tour the homes you know they will like before you meet with them. That way you save time by answering specific questions about the house before they walk through the door.

  • Increase your advertising.

    At a time when the office phones are barely ringing, get your message out any way you can. You don’t have to invest a lot of money in fancy billboards and sales flyers. A small direct-mail campaign to your target area and customer base will help. In your letter, emphasize your experience and ways you can help potential customers cut through the maze of paperwork and time-consuming aspects of a real estate sale.

  • Ask for referrals.

    Don’t be afraid to approach friends, family members and former customers for referrals. Word-of-mouth is the best form of advertising. Spread the word and hand out those business cards everywhere you go. You never know where you will meet your next prospect.

  • Finally, don’t give up.

    If you’ve been in the business for a while, you know the market fluctuates. If you can ride out this downturn, you’ll be way ahead of the other agents who gave up and got out of the business.

How to Sell a Home: Successful Real Estate Tips

Many factors are involved when determining whether a house will sell quickly. Buyers look at the price, location, age and benefits of potential homes. The good news is tips on how to sell are easy to find. When worried about finding a buyer, trying to evaluate every piece of how-to advice for effectiveness can cause more headaches. Of all the information available, there are some key points to remember. These tips for selling a house will have potential buyers knocking at the door.

Work With a Real Estate Agent to Sell a Home

Working with a real estate agent is perhaps the most important step to take when selling a home. Research shows more homes are sold with the help of a real estate professional. An agent has the education, experience and resources to find home buyers. He or she will help sellers decide on an appropriate selling price, advertise the home where it can be viewed most effectively, host open houses and, finally, communicate with potential buyers and their agents.

Sell a Home With a Good Price

The selling price of a home is based on several factors such as comparable sales and interest rates. Becoming familiar with the market area and knowing the selling prices of recently sold homes helps to set a price. An appraisal helps to establish a home’s market value by assessing its features, examining its condition and comparing it with similar properties. With an appraiser’s report and the help of a real estate agent, an appropriate price can be established to satisfy both seller and potential buyers.

Advertise Homes for Sale

Finding a buyer for homes is difficult if no one knows it is for sale. Two common forms of advertising are MLS listings and open houses. MLS listings give in-depth information about houses for sale while open houses provide interested buyers a chance to view the homes in person. A real estate agent will take care of these marketing strategies for sellers.

Take Advantage of Home Staging

Once a home is on the market, it should always be ready for potential buyers to view. This means undergoing a major cleaning process inside and out. Take care of messy yards, cluttered rooms and filthy bathrooms that might prevent buyers from seeing a home’s true potential. Entryways, floors, bathrooms and kitchens are areas buyers will focus on the most, so make sure these areas are especially clean.

Stay Optimistic When Selling a Home

Some sellers are lucky and sell their home within its first few weeks of being on the market. Others may not find a buyer for several months. If working with a real estate agent, discuss new strategies with him or her. It may be time to rethink the selling price or consider repairs that may increase the home’s value in the eyes of a buyer.

More Types of Fixer-Upper Properties: Real Estate Investors Have Many Choices in Distressed Properties

Seriously Flawed Properties

Investors may run across properties for sale which have severe problems that are expensive and time-consuming to remediate. Examples of these problems include:

  • Pervasive mold infestation
  • Extensive fire or water damage
  • Cracked or buckling basement walls, indicating foundational weakness
  • Outdated plumbing or electrical wiring

Only through careful calculation of what the repairs/upgrades will cost and consideration of the resources (financing, free or low-cost services of contractors, etc.) available to make the repairs/upgrades can investors determine whether it makes sense to buy seriously flawed property. On the one hand, an individual’s real estate investment plan may not be flexible enough to permit taking on such a risk. On the other hand, the remediation of serious problems will greatly increase the marketability of a property, making it a valuable asset in an investor’s portfolio.

Distressed Sellers, Foreclosures, and REOs

A property may have fallen into disrepair because its owner is in financial distress because of loss of employment, divorce, or illness. If a property is on the verge of foreclosure, its owner may be ready at a discount. If a property is in foreclosure, an investor may succeed in outbidding others for it at the sheriff’s sale. If a sheriff receives no third-party bids for a foreclosed property, the lender to which the property returns will be eager to get the non-performing “real estate owned” (REO) off its books.

Other properties may have buildings or homes that are brand-new or not quite finished, but the developer/builder has run out of funds to continue the project and – particular these days – cannot convince a bank to lend it more money. Moreover, if there are far fewer buyers for those properties than the developer/builder had anticipated; the desire to unload the properties quickly may lead to considerable concessions made to interested investors.

A Final Word of Caution

Stephen DiClemente, a real estate agent with Re/Max Tri County in Hamilton, New Jersey, notes that “most fixer-uppers are bought by investors, and most investors want to tie up as little of their own money as possible in the transaction.” Nonetheless, he adds, “With the current financial climate, banks are looking for a larger financial commitment from the investor.” This makes it crucial for buyers of fixer-uppers to “make sure that there is enough capital left after the purchase to complete the renovations,” Clemente says.

In addition, DiClemente cautions investors who plan to rent, rather than sell, fixer-upper residential properties after repairs, that “the competition for renters has increased” due to extensive foreclosures, job losses, and economic uncertainty. In fact, he notes that “a much larger percentage of homes on the market for sale are now dually listed as rentals.”

In short, investing in fixer-uppers is not an easy road to riches. Instead, it is a road full of potential pitfalls and uncertainty. But the careful investor who is ready to look at many ugly properties may find a true gem under layers of rust, grime, and red ink.

Real Estate Attorneys and Paralegals: A Career Overview

A real estate attorney assists clients with various real estate issues. Many times paralegals assist real estate lawyers in drafting and filing documents. Most real estate attorneys and paralegals have previous experience in other aspects of real estate or law.

Job Functions

Real estate lawyers may advise clients, file legal documents and represent clients in state court relating to real estate matters, according to Real Estate Zing. They also notarize documents and disburse funds in real estate closings. Knowledgeable in property investments, real estate attorneys may assist in sales and acquisitions of commercial property. Real estate lawyers may handle all legal matters related to landlord and tenant matters, mortgages, and foreclosures. Paralegals assist real estate attorneys in various administrative aspects.

Work Environment for Legal Real Estate Professionals

Salaried real estate lawyers generally have fixed work schedules. However, most real estate attorneys own a private practice and work irregular hours. This includes nights and weekends. About 33 percent of attorneys work 50 or more hours per week, according to the Bureau of Labor Statistics (BLS).

Real estate paralegals generally work in an office environment with a standard 40-hour week, according to BLS. Most work year round, while some are temporarily employed during busy times of the year. Real estate paralegals may also work long hours to meet critical deadlines.

Legal Real Estate Education, Training, and Experience

Attorney certification requires a 4-year college degree, three years of law school, and then passing the bar examination. Proficiency in writing, reading, research, and logical thinking are needed for success in law school and in the professional world. Oral communication skills are also important. Experience in the real estate field is also helpful. Those with a multi-disciplinary background and diverse skills are more likely to succeed.

Real estate paralegals with previous real estate experience are valuable. The most common route to becoming a paralegal is via community college paralegal programs leading to an associate degree. Paralegal certificates are available for those with a college degree. A small number of schools offer bachelor’s and master’s degrees in paralegal studies. Most paralegals train significantly on the job

Salary of Legal Real Estate Professionals

Real estate lawyer earnings may vary between private practice lawyers and those working for a law firm. Attorneys and law firms may also charge more for complicated real estate matters. In May 2008, attorneys earned a median annual salary of $110,590, according to the BLS lawyer page.

Paralegal wages vary greatly and depend upon education, training, and experience. Those working in large firms or in large metropolitan areas generally earn more than those working for smaller firms or less populated regions. Full-time paralegals earned an average of $46,120 in May 2008, according to BLS paralegal info.

Job Outlook for Legal Real Estate Professionals

Employment for attorneys is expected to grow about as fast as the average, but with high competition. Attorney positions are expected to grow 13 percent during 2008 through 2018, according to BLS. Previous experience and willingness to relocate are commonly required for many positions. Paralegal jobs are projected to grow by 28 percent between 2008 and 2018, reported BLS.

Security Issues for Sellers!! Do NOT Let Your Guard Down!

Security Unfortunately the issue of security must be brought up when you are selling your home. The fact of the matter is that you are inviting complete strangers in to your house. Remember when we were children and we were taught never to talk to strangers…well, not only are we talking to them, we are inviting them into our homes to see our personal effects. Most, if not all, of the people inquiring on your house will have honorable intentions. There have been cases, however, that fall way short of this. You must be completely alert of everything that is going on around you and must maintain complete control of the showing.

I will provide you with tips that I have followed throughout my years of practicing real estate. I hope that you will heed my warnings and be intelligent.

It is a good idea not to have too many people present during a showing because this causes distractions. Consequently, you find yourself alone with a stranger which can be hazardous. Make absolutely positive that someone you are close to, i.e. a neighbor, spouse, relative, know what time the showing begins and that you will check back with them in exactly one hour. This way they can be alerted of a problem.

A neighbor can watch cars coming and going, which can be a great benefit.

If you are uncomfortable being alone be sure to make statements like “My spouse will be home any minute” or “My friend is waiting for me” or something to make sure they know you are expecting company at any minute or expected to be somewhere shortly.

Always follow your prospect into a room. Do not allow yourself to be forced into a room, you need to be closest to the door at all times. Avoid letting someone get between you and your escape route.

Do not leave room for the buyer to park directly behind your car where there is no way for you to escape. Make sure that your car is parked in such a way that you will be able to quickly escape, should the need arise. With this in mind, keep your car keys on you during the showing. Tuck them away in a pocket for safekeeping. Jewelry needs to put away in a safe deposit box or home safe. Do not leave temptations laying around on a dresser shelf. Now is not the time to be a show-off.

Guns needs to be unloaded and locked in a safe as well. I would hope that this is already done and not merely being done for prospects. Guns should always be stored under safe conditions.

After the showing you must immediately go through the house and make sure that windows and doors were not unlocked or tampered with.

The bottom line is that you will have to be your best defense against ill intended people. If you have a bad intuition about your safety you must act on it. Find a way to get out of the showing or stay outside of the house and let them look on their own. Articles in the house can be replaced–you can not. It would not be outrageous for you to stand in your front yard and wait for the prospects to tour your house. You can jot down their license plate and make and model of the car. Sure, it is not the most effective way to show your house but your safety comes first…even if it costs you a sale.

The vast majority of people wanting to see your home will be genuine, honest, hard working people looking for a home. This warning is nonetheless required to make you aware of what you could be up against.

Sit back and take a few deep breaths before your prospect shows up. Gather your thoughts and get yourself into the selling mindset. Turn the radio on softly, let the candle burn and enjoy the accomplishments of your hard efforts. Your house has never looked better…uh oh, are you having second thoughts about selling now?

Holiday Letting an Investment Property: Doing the Initial Sums on a Holiday Home Investment

It sounds wonderful, doesn’t it? Owning real estate in a prime capital-growth location, gaining maximum rental returns on a nightly basis and getting free holiday accommodation for the family as well?

That is the dream that has been drawing property investors into the holiday letting real estate market for decades. Some would say it sounds too good to be true… but some swear it’s totally possible to have it all. The trick is to enter the market armed with all the information to ensure the recipe is right from purchase to profit.

Holiday Home Income

As with any investment property, the first thing to do is decide the buying budget and then calculate the necessary rental returns in order to ensure it’s affordable. It is true that holiday let investment properties almost always have higher weekly rents than permanent rentals and peak season rates can be 300% higher than the same property would if let on a permanent basis. However, it is also important to realise these rates are seasonal and estimated annual returns must account for significant variation throughout the year. A beach property for example, may rent for $1500 per week in summer, $1000 per week in other holiday periods and just $500 per week in winter.

Occupancy rates also need to be factored into estimated returns. While short-term rental occupancy rates may be as high as 90% in metropolitan areas, they are commonly 20-40% in regional areas. Talking to local holiday letting agents is the only way to get an accurate picture of area-specific occupancy rates. Particular types of properties may be more highly sought in some locales also, so quiz local letting agents on occupancy according to specific property styles and buy accordingly.

Most importantly, factor personal use into the investment return calculations. To ensure maximum revenue, avoid using the property during peak season or if personal use is one of the key reasons for purchasing the property, make sure personal time is deducted from the availability calendar prior to calculating revenue.

Vacation Investment Outgoings

Local letting agents can also provide an idea of regular holiday letting expenses. While it’s true that rental rates are higher, running costs are also more expensive than a permanent rental. Regular cleaning costs, marketing fees, linen hire and furnishing maintenance may all need to be added to management fees and standard holding costs and they can amount to more than 50% of quoted weekly rental rates.

Of course, the flip side of the higher outgoings is more tax write-offs. Because holiday homes are often let fully-furnished, right down to the crockery and the tennis racquets, there are a host of added depreciation benefits for investors keen to negative gear their holiday let property. Keeping holiday home furniture in top condition with a high replacement rate is a strong return-customer draw card and may also be in the best interests of the holiday home investor.

To sum up quickly, it is recommended the following basic figures have been estimated on an area-specific basis before beginning the holiday home property shopping:

  • Weekly/nightly rental rates
  • Seasonal rate variation
  • Seasonal occupancy rates
  • Management fees
  • Maintenance and cleaning costs
  • Cost of furnishing property and related depreciation
  • Standard council rates/body corporate fees
  • Lending costs based on budgeted purchase price
  • Extent of associated taxable claims and depreciable items.

Then it is time to consider the capital gains and marketing of a holiday-let as an investment property.

Influence Real Estate Appraisals: How an appraiser values your home can increase your property’s worth

What is the value of your home? The short answer is the maximum someone is willing to pay. It is very rare for a house to sell at exactly what it has been appraised at. Mortgage companies only lend up to the maximum value of the appraisal. This keeps properties selling at or below the appraisal value. This also makes the appraisal a very important tool in selling your home.

Understanding the Appraisal Process

Appraisals are very subjective; therefore, they are very open to manipulation. The process begins with a comparison of your home to four to six other properties. Appraisers do their best to find properties that are exactly like your property (same # of bedrooms, bathrooms, square footage, etc.). The problem with this approach is that no two properties are alike. Starting with the most obvious, location can be a big factor in home value. Unless the appraiser has been working in the same market for 20 or 30 years, the subtleties of location will be missed. One side of the street may be more preferred or even have a different tax base. All of these items should factor into the valuation of your property.

The appraiser’s next task is to adjust the valuation of your property. They adjust for upgrades (new kitchen, new bathroom, additions, etc.) by first rating your house, then rating the value of the upgrades. Typically they use words like excellent, average, and poor condition. Again, these ratings and adjustments are very subjective. There is no magic age that changes an upgrade from excellent to average. It is simply up to the appraiser to determine based on his/her experience. The longer the appraiser has been in the business the more accurate this process will be.

Influencing the Appraisal Process

Be present at the appraisal. Simply being present and pointing out positive things about your property will influence the appraisal positively. Try to note the less obvious things, like our kitchen was replaced less than five years ago or we just had our basement waterproofed. The more upgrades you can provide the appraiser, the more accurately he/she will be able to assess the condition of your property.

Ask about the set of comparable properties. Take the time to visit each property if you can get them in advance. If not, make sure that the properties are truly similar to your property. Try to visit open houses in your area before the appraisal to get a better idea of what the properties look like in your area. Understand what blocks are more valuable than others and look for other subtle things that an appraiser might miss. Additionally, your real estate agent can help you here as well. They tend to know the best appraisers and they know a lot about the neighborhood. If they can be present with you, your appraisal will go much better.

Appraisals are very important when selling a property. To maximize your home’s value, you must take an active role in this process. Appraisers are human, which means they are open to influence and they don’t know everything. The more you can help them understand your property, the better your appraisal will be