When it comes to buying a real estate investment property, the first deal is the hardest.
I know that financing your first investment property can be a major pain. The first time is by far the scariest and hardest. After you get over this fear and hump it you are on your way to success. It’s like this with lots of things in life. Travel,girls, and just about everything worthwhile. You have to take a risk, put yourself out there and be prepared for success.
Check your credit score early and often to make sure there aren’t any mistakes or issues you need to address before hand. This will save you many headaches going forward.
Next decided what kind of property you are looking to purchase. I would recommend the under 10k variety near a big city like Louisville,Kentucky or Detroit,Mi.
Get your paperwork in order.Your bank or credit union will need all your paperwork such as bank statements, paycheck stubs, and all your financial records. So go ahead and get it all organized so they can look it over. Keep this all together and up to date.
I’d recommend hiring a real estate attorney to get all your paperwork organized and give you strong advice on moving forward.
Next, get prefinanced.
This will save you time and headaces with realtors. Next head on out and get your fixer upper.
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1. Pick up a part time job consulting in your field.
2. Have a garage sale and sell anything you don’t need.
3. Cut up your credit cards and just use cash.
4. Make money online in your spare time.
5. Eat out less.
While these five ideas might seem like no brainers to most of you. They are really not the norm in our society of spend more than what we have. Keeping things simpler and living more like our grandparents did during the depression is definetly a step in the right direction.
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If you have been in the market for a home in the recent months, you are probably ready to go ahead and make the purchase. If I were you, I would do everything that’s needed and expedite the process. That’s because you can take advantage of the Home Buyer Tax Credit if you have a binding contract to purchase a home BEFORE April 30 of this year!
If you already have options, then it is a matter of making a decision. If you need more options, then here are some tips that can help you get the benefit of a tax credit.
Find a reputable agent. A good agent will be able to help you expedite your home purchasing experience. For sure, agents know about the Home Buyer Tax Credit, and they will help you take advantage of it.
Get financing NOW. Don’t wait till you find a potential home for purchase. You should already know how much you can afford. There is nothing holding you back from getting financing. Oftentimes, this part of the process could take long. As such, you shouldn’t really put it off till the last minute. The best thing that you could do is have the money ready for when you find that house.
Don’t get carried away. Sure, I am urging you to take advantage of the tax credit by hurrying things up. However, if you do not find what you want before then, do not make that sacrifice just because of the tax credit. The credit is great BUT you don’t want to be saddled with a piece of property that you will want off your back as soon as you get it.
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You’ve probably heard it many times, but let me say it again: buying your first home is probably one of the biggest decisions you’d ever have to make in life. If this is one of your goals for 2010, let me help you get on your way with a few tips that have been tried and tested.
Examine your lifestyle. Your home is going to be a central part of your life. While it is inanimate, it is definitely going to affect how you live your life. Its location, especially in relation to your place of work, is going to be important. The floor plan, the size, the layout – all of these should fit your lifestyle. From the outset, determine what it is exactly that you want: where should the house be located? How big should it be? How many rooms? What rooms do you need? And so on.
Know just how much you can afford on the house. Knowing what you want and need is one thing. Having to pay for all those needs and wants is another story altogether. Once you have decided on your first house and every other physical detail, you have to know what you can and cannot afford. You have to set the limits before actually going out and looking.
Seek professional assistance. It’s your first time. You want to do it all by yourself. The best way to go, in my opinion, is to seek expert advice, especially in legal aspects. It’s better to go about it the right way than to regret things later on.
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Getting a mortgage used to be an easy thing; at least during the height of the real estate boom. We know that all good things must come to an end, however, and currently, getting a mortgage can be as difficult as going through the eye of a needle. For those who are looking to buy a home in these hard times, your best bet would be to get a preapproved mortgage, even if you have not decided on what to buy yet. But how do you get this? Is this even possible?
The good news is that yes, getting preapproved is quite possible despite the difficult times. Here are some tips on how to get preapproved for a mortgage.
Do it early!
If you plan on buying a house next year, shop around for mortgage lenders NOW. The chances are that you will not get a preapproved mortgage on your first try. Probably not even on your second, third, or fourth try. As such you will have enough time and you do not have to go through additional stress because of the time factor.
Get your financial records in order.
No matter how you look at it, you are going to be asked to share your financial information. Get your act together – proof of income, credit, assets, and everything else that will help you prove that you are capable of paying the mortgage.
Know this: preapproval does not obligate you to borrow from the lender.
This is the beauty of the arrangement. You can get preapproval but you can back out in case you decide not to borrow money. You are not tied down. Remember that.
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If you have been a homeowner for a long time, the chances are that you have gone through at least a couple of mortgages. More often than not, homeowners change mortgages or refinance their homes. This action could be due to a variety of reasons – none of which are relevant to this post. What I want to bring up today is the question of storing mortgage papers.
Of course, it is but natural and sensible to keep copies of t hem in storage. It is utter nonsense to throw papers away that have something to do with your ownership of a house or property. But what if you have had several mortgages over the years? Naturally, the first, second, and even third mortgages may be outdated and not applicable to your current situation. It is only the most recent mortgage – the one that you are actually paying off that matters.
Given this situation, would it be safe to assume that the old papers can be disposed of? Now why would I be asking such a question? Why not just keep all the mortgage papers and records in one safe place in case you might have need of them in the future? That is a good point BUT what if you do not have enough space to store all that junk? Would throwing them out be an option then?
The answer is yes. Once you have paid off the older mortgages (which is normally the case when you refinance or get a new mortgage), then they do not apply anymore. That means that the papers are not good for anything – except for the recycling center, perhaps.
What do you think?
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A house is one of the most expensive things that the average person can ever buy. It involves long time commitment and a great degree of planning. Of course, mortgage is always part of the whole process. In the previous post, we took a look at some common mistakes that people make when it comes to mortgage. Let us take a look at a few more in order for you to avoid them.
Taking out too big of a loan
I have heard this rationale applied to many other types of loans. The person would think that since he or she is borrowing money anyway, he or she might as well go all out. Perhaps, in the future, his or her income will increase and it will be easier to handle the loan. Some people think this way when it comes to mortgages. But let me tell you, this is a surefire way of getting mired in debt.
Spending money does not stop at the moment of purchase. It is quite expensive to maintain a house, especially if you want to do it properly. And why wouldn’t you want to maintain your house the right way? Regular and proper maintenance will only increase your comfort and the value of your property anyway. So, instead of borrowing too much money, just borrow what you need and use your money on more immediate needs.
Settling for the first deal
This applies to so many other things when shopping – you do not settle for the first thing that you see. There are so many mortgage providers in the market today. They are all competing for YOUR business. Shop around, compare terms and prices, and try to get the best deal possible.
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This may not be the best of times to apply for a mortgage. Then again, many Americans are feeling a renewed sense of hope after the results of the elections came in. If you are looking for a mortgage right now, I encourage you to do so carefully and avoid these mistakes.
Leaving your credit as is
Believe it or not, a lot of people actually just hope and pray that their credit will be good enough to get them a good mortgage. The truth is that you need a more than decent FICO score to get a decent deal on mortgage. Please do not leave your mortgage dealings to chance. Pay close attention to your credit and try to rectify errors in it before you apply for a mortgage. You will certainly appreciate the difference it will make.
Not looking into various deals for first-time home buyers
If you do not know it yet, the government has various programs for first-time home buyers. These programs are run in different levels – state or city, even county. If you are buying a house for the first time, I suggest strongly that you look for these deals. It won’t require much effort but the rewards are tenfold.
Thinking that pre-approved loans are not necessary
Ok, maybe they are not necessary but having a pre-approved loan will make you a priority in the eyes of real estate agents. Do not make the mistake of thinking that pre-qualified and pre-approval mean the same thing. The former is an unwritten thing – no guarantees – while the latter means that you really do have a loan ready for the purchase.
(to be continued)
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Hard times are upon most of us yet we cannot deny the fact that there are still people who are in the market for a house. There are still those who are selling and buying real estate. If you are looking for a house to buy, here are some great tips which can help you make the most out of the current situation.
Gather as much down payment as you can BUT do not sacrifice your emergency fund.
The more money that you have for down payment for a new house, the better your chances of getting a good financing deal. This is hard enough during normal times and during these times of economic turmoil, it could even be harder. As such, you should not, at all costs, touch that emergency fund of yours.
Make sure that you pre-qualify before anything else.
This tip involves as much common sense as the first one. You have to know how much you can afford in total for a house. The same thing applies for the down payment. By pre-qualifying, you can find out the figures. Knowing exactly how much you can spend will make your home buying endeavors more decisive.
Get a rate lock.
It is easier said than done because the markets are fluctuating so much at the moment. But still, you have to lock in a rate at some point, otherwise, you might end up losing good rates. Look for options that will allow you to get a float down, that is you can negotiate your rate in case there is a considerable drop.
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For those homeowners who are feeling the crunch of the economic times, the government has done something to help alleviate the pressure. Early this morning, it was reported that President Bush signed a bill that is aimed to provide relief for homeowners and the biggest mortgage groups in the country, Fannie Mae and Freddie Mac.
ABC News reports:
The Housing and Economic Recovery Act of 2008 will allow a limited number of homeowners who can’t afford their mortgage payments to refinance with government-backed loans. As many as 400-thousand families become eligible for help refinancing expensive mortgages. This will not help homeowners who have already been hit with foreclosure. The measure will also give the Bush administration new authority to control Fannie Mae and Freddie Mac.
“We look forward to put in place new authorities to improve confidence and stability in markets, and to provide better oversight for Fannie Mae and Freddie Mac,” White House spokesman Tony Fratto said. “The Federal Housing Administration will begin to implement new policies intended to keep more deserving American families in their homes.”
The whole idea is quite attractive, especially for those homeowners who are saddled with hefty mortgage payments. However, as the excerpt above states, those who have already had their homes foreclosed will not be affected by the bill. More so, the bill cannot encompass every single American family who has a mortgage. The figure that has been thrown around is 400,000. I am quite sure that the figure of families struggling with mortgage could easily be double this number. What about them?
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