You don't have to watch TV for long before Tom Selleck, Henry Winkler or Robert Wagner will tell you why seniors should consider a reverse mortgage. However, there are a seniors who are resisting the conventional wisdom of having their home paid for and opting for a mortgage with payments on their home. In some cases, seniors will downsize into a smaller home and have a large amount of equity to pay cash for the new home. In other situations, they may have their home paid for and decide to do a cash-out refinance which will require making payments. The logic behind either of these examples could be motivated by the fact that since mortgage rates are so low currently, the owners can reinvest the money at a higher yield and make money on their equity. This will give them more money for their retirement income. A common question that is asked by owners considering such a strategy is whether they'll be able to qualify for the new mortgage since they may no longer be … Continue reading...
Shopping for a Mortgage
A lower rate will not only result in a lower payment, it will amortize the loan quicker. A $250,000 mortgage at 4.5% for 30 years will have a $1,266.71 principal and interest payment. At 4%, the same loan will have $1,193.54 payment saving $73.18 a month and the unpaid balance would be $1,776 lower at the end of five years. Mortgage lenders tend to price their mortgages based on the credit score of the borrower. The higher the credit score, the lower the mortgage rate. There is an inverse relationship that the lower the credit score, the higher risk and therefore, a higher rate is needed to balance the risk. In order to get a valid rate that will be available to you with your credit score, you need to be pre-approved. The process of making a loan application before you find a home, allows the lender to verify your credit, income, and ability to repay the loan. Lenders usually only charge the cost of the credit report for this type of service. Be … Continue reading...
Get Ready to Garage Sale
A well-planned garage or yard sale can give you extra space in your home, get rid of unused items and make some money but it needs some of the same considerations that any business needs to be successful. Start early to research and plan Promotion is key Display items attractively Price items right Organize checkout Determine the date of your sale, remembering that there are exceptions, but Saturdays are generally the best day. Experienced garage-salers believe that a well-planned one-day event will do as well as a multi-day event. Serious purchasers will look for the "new" sale and most people don't come back multiple days. Recognize that the first day of the sale will have the most people. Everyone will be looking for a bargain but some of them actually want to purchase things for them to resell at their own sales. Advertise in local newspapers and free online classified sites like Craigslist. If several families are … Continue reading...
What kind of properties are these?
It is the way the property is used that determines the type of property it is, not what it looks like. Based on the intent of the owner, the property could be a principal residence, income property, investment property or dealer property. A principal residence is a home that a person lives in. There can be only one declared principal residence. It is afforded certain benefits like deducting the interest and property taxes on a taxpayers' itemized deductions, up to limits. Up to $250,000 of gain for a single taxpayer and up to $500,000 for a married couple filing jointly can be excluded from income if the property is owned and used as a principal residence for two out of the previous five years. An income property is an improved property that is rented for more than 12 months. The improvements can be depreciated based on a 27.5-year life for residential property or 39-years for commercial property. This is a non-cash deduction that shelters … Continue reading...
Why Put More Down
The least amount in a down payment is an attractive option when people are thinking of buying a home. A common reason is to have cash available for furnishing the new home and possible unexpected expenses. Some people don't have any options because they only have enough for a minimum down payment and the closing costs. For those fortunate buyers who do have extra money available, let's look at why you'd want to do such a thing. Most loans in excess of 80% loan to value require mortgage insurance to protect the lenders for the upper portion of the loan if the home were to go into foreclosure. FHA requires an up-front premium of 1.75% of the amount borrowed plus a monthly amount of .85% on the balance. FHA mortgage insurance premium must be paid for the life of the loan. Mortgage insurance on conventional loans varies depending on the borrowers' credit and the amount of down payment being made. Unlike FHA, when the unpaid balance reaches 78% of the original amount … Continue reading...
Current Mortgage Rates
Before Buying A Vacation Home
There's a fine difference between a second home and a vacation home. If you are going to primarily use the home for yourself, then, it is probably a second home. If you're going to use it some during the year and rent it out the rest of the time, it is probably a vacation home. There is another possibility. If you use it for 14 days a year or less, the property could be a rental property which means you may have some benefits that are not available to vacation properties. These may seem insignificant, but the tax laws require that they are handled differently. Try to be realistic about what your expectations are for the property. Are you looking for an investment that will earn rental income and go up in value? Are you trying to find a way to lower the costs of vacations by owning the property? How do you feel about strangers using your property when you're not there? Vacation rentals are short-term which may realize higher rents, but they could also have higher than … Continue reading...
