Reverse Home Loan Book

Normally the kind of mortgage advice we give is for people who may need to get out of their mortgages. But what if you’re looking to dive into the housing market? What kind of mortgage advice do you need?

Well, it certainly is a buyer’s market out there with over a million foreclosed houses alone available for sale! If you’re moving to take a new job or just like the idea of owning the place where you live, this might seem like a great time to invest in a mortgage and in a roof over your head.

With that in mind, as Realtors we do have some solid mortgage advice for you.

First, don’t think of any house you buy as an investment. Yes, you may get lucky, and property values might rise enough for you to get some money out of the house after your mortgage is paid off, or even before. But if you look at your house as an investment bank that’s going to constantly pay off for you-well, those days are long gone.

It’s much more likely that the property you’re looking at will fall in value before it ever rises again.

The next thing you need to know about mortgages is that there is one kind of mortgage that you should never, ever get-even if you have to walk away from the sale. That mortgage is called an adjustable rate mortgage, or ARM.

With ARMs you get a nice, low monthly payment for the first 1-7 years, depending on the terms you get. After those 1-7 years, though, the mortgage resets to reflect inflation. And it keeps resetting every year after that. Sure, if inflation goes down, you’ll see a decrease in your mortgage payment. But don’t count on that happening!

When you’re applying for mortgages, the mortgage lenders are going to be looking at something called a loan to value (LTV) ratio. That’s the ratio of the amount of the mortgage to the actual value of the house. For example, if you take out a $130,000 loan on a $150,000 house, you’ll have an LTV of 87%-you’ll owe 87% of the house’s current value on your mortgage.

Mortgage lenders are only likely to write you a mortgage if your LTV is 80% or less-especially these days!

We know that there are some incredible-looking deals out there. Property values have dropped so low in some places that you might be able to buy at least a condo outright! But before you decide to make a mortgage commitment of any size, we want you to ask yourself these questions:

· How is this area economically? Is the economic base diverse enough that you aren’t going to be as likely to have to move and then be stuck in a mortgage you don’t want to pay anymore?

· Property values are likely to drop even more before things get better. And it’s unlikely we’ll ever see a real estate bubble like we did during the past decade and a half. In that case, would your money be best spent on a mortgage or on your financial future?

Finally, be sure to get someone beside a mortgage lender-or anyone else who has a stake in your financial decisions-to give you personalized mortgage advice based on your family’s specific situation. You’re going to want to learn as much as you can online, of course, but there’s no substitute for a qualified person who can tell you how the ins and outs of mortgages can affect you personally.

By: William Bud Gragg Jr

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“Fear melts when you take action towards a goal you really want.” -Robert G Allen

There are several reasons why owning commercial property is better then owning resident property. The reasons are clear for anyone who has ever worked as a landlord. Cranking tenants complaining about everything on earth in the middle of the night.

Most people invest in residential real estate because commercial real estate feels like unchartered waters and we are afraid. How exactly does a commercial landlord do, act, and say? Commercial property must work pretty well, after all Donald Trump started his emperor by being a commercial property ‘landlord’ and if it worked for him it can work for you.

Below are a few reasons why you might want to consider investing in commercial real estate instead of residential.

The first reason that commercial real estate has a higher rate of return then residential properties. Commercial property is space for businesses to sell their products and services. Their businesses depend on the number of visitors they receive each day in their store.

The monthly rent on a commercial property is based on a certain percentage of the profit the company makes each month. As the businesses your rent to, make more money so do you. When a business comes and want to rent from you they do so because they know you have a good location.

These businesses know the value of being centrally located and they are willing to pay to be in the right place. Location is less important for residential properties and it takes time to fill up your real estate.

Most commercial renters will fix problems and minor repairs on their own with out calling the landlord. This is because they realize that problems interfere with their business and need to be taken care of immediately. Unlike residential renters who need the help of a landlord to take care of repairs. The updates done on commercial property can be fairly substantial and stay with the space when the business moves on.

Companies usually need to put in networking and cable wires, sound systems, and electrical outlets. All of which increase the market value and marketability of your commercial space. If you are interested in buying and renting property do not over look the benefits of buying commercial property.

It is far more passive then residential real estate and appreciates in value much quicker. Being a commercial ‘landlord’ is far easier and you have the ability to network with people and businesses which you may work with in the future.

By: Mika Hamilton

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