tom-beaty.com views on real estate

Up up and away. Mortgage interest rates continue on their upward trajectory. 30 Year mortgage rates went from 6.32 to 6.42. 15 year notes rose from 5.93 to 6.02 and 5 year arms rose almost 20 basis point going from 5.7 to 5.89. 1 Year arms rose this week from 5.09 to 5.19. But unlike the other mortgage products (which are higher) 1 Year Arms remain about where they were a month ago. As we have talked about for the last several months since the FED is no longer cutting rates we can expected rates to rise throughout the summer. The only question is when they will stop rising and start stabilizing. Below is the rates for the last month.

June 19,2008
30-yr 6.42 15-yr 6.02 5-yr ARM 5.89 1-yr ARM 5.19

June 12,2008
30-yr 6.32 15-yr 5.93 5-yr ARM 5.70 1-yr ARM 5.09

June 5,2008
30-yr 6.09 15-yr 5.65 5-yr ARM 5.51 1-yr ARM 5.06

May 29,2008
30-yr 6.08 15-yr 5.66 5-yr ARM 5.62 1-yr ARM 5.22

May 22,2008
30-yr 5.98 15-yr 5.55 5-yr ARM 5.61 1-yr ARM 5.24

May 15, 2008
30-yr 6.01 15-yr 5.60 5-yr ARM 5.57 1-yr ARM 5.18

Using our free mortgage calculator lets see how the increasing rates have changed the payment on a 200k loan.

June 19th
30-yr $1253.63
15-yr $1689.87
5-yr ARM $1184.99
1-yr ARM $1096.98

May 15th
30-yr $1196.53
15-yr $1639.47
5-yr ARM $1149.41
1-yr ARM $1103.16

Mortgage payments on most of the mortgage products went up quite a bit over the last month. Looking at a 30 year note the mortgage on a 200k loan has increased $57.10 or about 4.8 percent in a little over a month. In fact the only mortgage product to fall is the 1 Year Arm ($6.18 or about 0.5 percent). Why banks would want to push ARM which is the very loan product that caused all the problems in the first place is anyones guess. Although I typically avoid ARMs the cost savings on a 1 or 5 Year ARM is hard to ignore. That said I would only look at ARMs if you think their is a reasonable chance you will sell your property in that time frame. The general expectation is that rates should be higher and not lower in a few years.

So the question remains where are rates going to be in the next month. While I was fairly confident that rates would rise this month I am not as sure what will happen in a month. If the FED continues to avoid anymore rate cuts I would expect to see mortgage rates at about the same level or higher. Banks have been dealing with massive losses from foolish bets on subprime loans and are looking to make up for these losses through higher mortgage rates.

Another change occuring with loans is a limit on the number of investment properties an individual can recieve a loan on. It looks like most banks are limiting the number of investment property loans per individual to 4. This should obviously have a negative effect on investment properties. I also expect to see more cash offers from investors looking to pick up properties at currently depressed prices.

Personally I think this rule is a little bit foolish. I would make more sense to limit loans based on some networth to total loan amount ratio. For instance if someone has 2 million in the bank it seems reasonable to allow them to buy 5 duplexes for 180k. But if the banks were well run they probably would not be swimming in subprime debt right now.

Ki is real estate agent in Austin Texas. He runs a website covering the ins and out of Austin real estate along with providing a free search of the free mortgage calculator and information on mortgage interest rates.

Thanks to the explosion of the real estate market a few years ago and the amount of people who are now defaulting on their home loans, the real estate foreclosure market is booming. Lenders granted loans for people with border line credit on the assumption that if they did have to repossess the house it would be worth far more than the mortgage. The lender planned on selling the repossessed property quickly and at a profit. That didn’t happen.

Unlike a decade ago when a foreclosure was almost certainly a broken down/condemned piece of real estate, now foreclosures are just as likely to be beautiful and well kept homes! This makes investing in foreclosed properties potentially lucrative.

If you’ve ever wondered if you should start investing in foreclosed properties, here are a few tips to help you get started:

1. Do your research on each and every property that you are thinking of investing in. If you can afford it, you should have each property professionally appraised before submitting an offer on the foreclosed property. Make sure that you aren’t going to be investing in something that is going to be more of a “fixer upper” than you originally thought.

2. It is better to buy a foreclosed property at public auction. This is because sometimes homeowners who are facing foreclosure will take the money they make from selling it to you and, instead of using it to pay off their current home loan; they use it to purchase a new home. This means that, technically, the bank could still seize the house you just paid for and you have little chance of recouping your investment.

3. Investing in foreclosed property shouldn’t be looked at as a full time job, especially if you are just entering into the field. It is best to start investing in foreclosed properties while you still have a full time job or some sort of steady income to ensure that you are still able to pay your bills while you work on your foreclosed property and wait for it to “flip.”

4. Allocate only a portion of your investment portfolio to foreclosures. A balanced portfolio offsets swings in the market place. The house you buy at a foreclosure auction may seem like a steal. But it will remain that way only if the market doesn’t go below what you’ve paid for the property. If your portfolio is balanced you give yourself the time for the market to start on a swing back up. You won’t be forced to sell at a loss just to recover the cash or get yourself out from a mortgage you can’t afford any longer.

Investing in foreclosed properties isn’t for the faint of heart, but it can prove to be quite a profitable business! Make sure that you do your research and learn every thing you can about the field before you get started! Don’t put all your resources in any one type of investment and that includes foreclosed properties. Give yourself time to make a profit. Don’t get yourself into a corner where you’re forced to sell in unfavorable conditions.

Interested in investing in Real Estate. Dee Power is the author of several nonfiction books including The Making of a Bestseller, Attracting Capital from Angels, and Inside Secrets to Venture Capital. Dee’s hobbies include gardening

Real estate and home selling are some of the most competitive form of investments today that you may join. However, before joining, you must be knowledgeable on this business fundamentals. You have to know that pros and cons.

Price is an imperative factor to consider in the sale of your home. You need to be certain that your house is priced appropriately. Do not think of going out there to start looking for buyers for your house without first knowing the right amount to sell it. You can hire a real estate appraiser to determine how much your house is worth especially if you do not have even a little knowledge of your property’s market price..

Do not make the mistake of leaving any building or renovation project in your house undone while attempting to sell your house. No home-buyer fancies paying a huge amount of money for a home and then sinking in extra money to complete any unfinished buildings or projects that were left undone. Make it sure that your home is a home-buyer’s dream by making everything ready-made.

Postcards and fliers are two methods to let people know that you are selling your home. Your neighbors can help you sell your home particularly if they know someone who is interested in purchasing a home. Never underestimate the power of something as small as a postcard or fliers to help sell your home for you.

You may also decide to have an open house sign placed in front of your home to attract potential home-buyers. Open house is a marketing technique that allows anyone who is interested in buying a house come in and scrutinize your home. The disadvantage of having an open house is that even people who have no intention of buying a house troop into your home.

You can have a ball selling your home if you know the right buttons to press. The process of selling your home can be a living nightmare for you if you are clueless about where to begin.

Even something as mundane as a small ‘for sale’ signboard in front of your home can be an effective magic for you. A ‘home for sale by owner’ signboard must have a contact phone address on it so that potential home-purchaser will be able to contact you.

Selling your home entails giving out the right kind of information to the right people and through the right channel. You can sell your home using a real estate agent. You may choose to sell your home by yourself if you know how to go about it.

A home is more than a place that you can come back to after a long hard day at work. A home can churn out a handsome profit for you as long as you do the right thing. If you are not capable of selling your home, you should seek professional help.

To read more,visit http://www.investinukland.com/

The loan process you follow when searching for a construction loan has some similarities to that of obtaining a regular mortgage. You will still be judged on your income, credit, savings and monthly debts just like a regular mortgage.

However, with a construction to permanent loan, there are a few additional factors that lenders consider. Since the home is not yet built, an “as-finished” or “as-completed” value must be established by a “plans and specs” appraisal.

When you go to get a mortgage on an existing house, you will also need an appraisal to establish the value and to insure that you are not paying more for the house than it is worth. With a home that is not yet built, this is doubly important. The lender needs to see what the projected home will be worth based on other homes that are similar in the immediate area.

Basically, for an appraisal prior to construction, you will deliver to your appraiser a set of home plans along with a list of materials you intend to use to finish the home, such as flooring, appliances, countertops, etc. Then, the appraiser will go to the vacant lot upon which you plan to build, and he will determine an appraised market value based on the recent sale of very similar homes in the immediate area.

In addition to the appraisal, the lender will also examine your proposed budget carefully to determine if there is enough money to build the home and if the builder (or owner-builder) is over-spending to build a home of that particular appraised value.

Each lender can have its own set of guidelines and parameters it uses to determine if you are under-budgeting or if you are over-budgeting. But, in general, the lender’s goal is to protect you and themselves from some potential disastrous scenarios: either an unfinished house or an over-built home in a market that won’t support the price.

Therefore, think of your construction loan as requiring two sets of approvals. First, you must be approved as a borrower. Second, the project you wish to build must be approved based on the appraisal and budget.

And, typically, the qualifying guidelines, especially for owner-builders, are more stringent than for regular purchase mortgages. This is for two very simple reasons: risk and supply/demand.

There are thousands of loan programs out there for buying a house. You can have good credit, bad credit, low income, high debt or any number of other variables and still qualify for a purchase mortgage.

But the choices are more limited when building a home. Construction loans (and owner-builder construction loans in particular) are more risky for lenders. This is why not all lenders offer them. And, it is why those who do offer them can set tougher qualifying standards and be more particular about who they give their money to.

Risk, along with supply and demand, determines all mortgage pricing.

Remember that construction loans in general, and owner-builder loans in particular, are more complex than typical purchase mortgages. They will require more time to prepare for on your part.

And, they will take longer for your lender to process and get you to closing than normal. So prepare appropriately. If you understand the process before starting, and set your expectations accordingly, you will have a much more pleasant loan experience.

In fact, when considering the timeline required to close on a construction loan, keep in mind that many times the lender is forced to wait on you, the borrower. Often, the slowest part of construction loan planning involves waiting on the blueprints and the budgeting.

The underwriting of the loan cannot really begin until the blueprints and budget are complete. So, the lender is often forced to wait for the borrower to complete these items. This is not a bad thing. It is just an important point to remember when planning for your overall construction loan timeline.

Speaking of planning for construction loans, here is one last important point that you may not have considered yet. As the mortgage market has drastically changed nationwide over the last couple of years, one of the new mortgage industry catchwords that you will likely hear is “area of declining value.” Chances are you will hear quite a bit about this for the next year or two.

What does it mean if you live in, or want to build in, an “area of declining value?” Simply put, it means that the government has declared that your local area has seen significant enough drops in average home values to place your area on a watch list.

Mortgage lenders have adopted different guidelines for doing business in these areas - and all lenders are slightly different.

Be prepared: if you find yourself in one of these areas, you will likely have a different set of qualifying standards than if you were not in a declining market area. This is not a reflection of you as a borrower, but in the general market conditions that currently exist.

Overall, if you are considering building your home and need construction financing, hopefully this brief article helped you recognize some of the key differences between the simpler purchase loans to which most people are accustomed and the more complex construction to permanent loan that will be required for building your home.

What are the key things to remember? First, understand that the construction to permanent loan is more complicated and may take a bit longer to complete. Second, be aware that there are basically two sets of approvals that are required: your credit approval as a borrower plus the approval of your project’s budget and appraisal. Finally, be on the lookout for areas of declining value, as it might affect your construction loan in some way or another.

Chris Esposito provides owner builder construction loans nationwide through his Owner Builder 101 program. Visit www.OwnerBuilder101.com to be an owner builder and save tens of thousands on your next home. Or call Owner Builder 101 at (877) 876-3688.

When selling your home, have you considered if using the services of a professional real estate agent will be worth the fee that he or she charges? Depending upon the agent and your personal circumstances, the answer may be either yes or no. There are pros and cons involved with both using an agent, and choosing to do it yourself.

Remember: real estate agents want your business, so negotiating is acceptable. Additionally, many low quality agents simply want to sign a contract with you, pass the information on to the secretary at the agency they work with, have the secretary put the listing in the multiple listing service, and then do nothing more until your property sells so they can collect a fat commission check.

If that is all the agent does for you, you’re wasting your money by paying an excessive fee for very little value in return.

Here are some things that you should ask a potential agent:

* Do they advertise in the local newspapers and magazines on a regular basis - If so, is it a color ad and how often would your property be advertised and in how many publications? Put specific details in the contract.

* Do they have their properties listed on popular property websites? Do they include full details of their properties?

* Are their details produced in color, with internal and external photos?

* How many buyers are they working with that are looking for your type of property and in your price bracket?

* Do they provide an opportunity for their entire sales staff to view your property to familiarize themselves with the property that they will be selling? How can the office represent and sell a property to its full potential if the agents haven’t seen it?

* Always find out about their agency agreements - there are a lot of agents out there that want to ‘tie you in’ to a 12 month agreement. This is generally the case for the large chain real estate agents; the independents do not generally have as large of a tie in period. All they usually require is 2 weeks written notice. It is always preferable to be tied in for as short of a period of time as possible - think of it this way, if an agent is good at what they do then they won’t have to tie you in to give them 12 months to sell your property!

* Also, go with your instincts - if you feel that a particular agent would promote your property better than the others then that could be the one to work with.

A top notch agent is worth his fees. By doing some investigative work before you choose an agent, you’ll reap the benefits throughout the selling process.

J Stromsteen has many years expertise in the finance, real estate, and insurance industry. She contributes to various websites such as First Time Home Buyer where you can find today’s mortgage rates as well as a wealth of information on finding a real estate agent.

Currently there are record numbers of people purchasing land as a viable form of investment, but why are so many purchasing plots? The reasons are diverse, some are purchasing land purely to make a financial return on the plot while others, inspired by such television programmes and ‘Grand Designs’ are using land to build their dream home.

For those thinking of purchasing land it is important to understand the four major varieties. These are agricultural, Greenfield, self-build and woodland. Agricultural land is mainly bought by people who either want to keep animals and livestock such as horses for grazing. Greenfield covers a range of types of plots varying from open grassland and scrubland. The purchasing of self-build land is rapidly becoming the most popular variety in the UK with almost 25,000 people deciding on this course of action in the last year alone. Woodland is also popular with many investors buying attractive plots and areas where plantations would be viable.

Now these types of land are understood it is important to look at why increasing numbers of people are purchasing land. One of the major reasons behind this is that land is real, unlike shares; it can be walked on and seen; meaning many people are more inclined to invest. In addition to this, many people are choosing land because it can be considered a finite resource, especially in a country as small as Britain. While property prices may rise and fall, as the amount of land for sale drops, the price will only rise, making it a sensible long term investment.

Another reason why people are purchasing land as a form of investment is its relative affordability. While an average semi-detached property can cost as much as a quarter of a million pounds, a similar sized plot will only cost around ten thousand. Due to this situation, many are purchasing plots and deciding to build their own homes, making them not only personal, but cheaper as well. As the UK experiences a current shortage in suitable housing the increased purchasing of investment land is understandable. As a result of the shortage the value for desirable pieces of land will increase and hence the investment is sound. It is likely this situation will continue further increasing plot prices.

The reason land is such a great investment is the variety of uses for any particular plot. If you are looking for a plot to graze animals, building business premises or even your dream home a plot is an affordable method of doing this. In addition, the piece of land will carry on accumulating value while you own it meaning that even if it is just sitting there falling fallow, you will eventually be able to make a decent return. In a world where property prices are suffering, land is continuing to be strong.

When purchasing land there are various factors that you must take account of. These factors include the general wealth of the local area and subsequently indicators of the eventual plot price. In addition it is worth taking notice of the detached house prices in the region; often a plot is around a third of a house price, although this will normally include planning permission. You should also consider how well land sells in the area, by doing this you ensure the market for your plot once planning permission has been achieved. Your final consideration when purchasing a plot should be how long it will take to receive planning permission. While government initiatives are trying to speed up the process, it can still vary immensely in different areas.

By following this advice and understanding the key points surrounding land investment your purchase should be sensible and worthwhile. Nobody wants to be stuck with a plot that is impossible to sell. Investment is always a risk, but by investigating thoroughly you should be able to minimise that risk and make best use of your capital.

Property expert Thomas Pretty looks into why Scala land group purchasing options can be considered a decent investment.

As many investment markets worldwide seem to be suffering, such as gold, pensions and the stock market it is surprising that investment in land is still a popular way to achieve profit from returns. There are however certain myths surrounding land that is preventing many people from taking the step and making returns from their investments. The purpose of this article is to debunk some of these myths and show people that land is not only a great asset to possess, but also valid investment

Many people still believe that land is just land and are surprised that plot prices can vary so greatly. This is not the case, land varies immensely falling into categories such as residential and agricultural; in addition, land can also fall into categories such as woodland, Greenland and plots with and without planning permission to build. The price you pay for your investment is directly related to the demand for any piece of land and the quantity of the plot. For instance, land surrounding the London suburbs is of high demand and hence its price is considerably higher than a plot in an isolated part of the country. By understanding this relationship between size, location and quality it is possible to make sound investments.

Another myth that surrounds land investment is that unless you have a considerable amount of capital, you will not be able to invest. This is not always the case, while plots that already have planning permission are almost certainly more expensive, if a plot does not have planning it can be up to ten times cheaper. As an investor you want to buy plots that have no planning permission and then apply once you own it; by doing this you increase your investment by buying for less and selling for more. Also when buying land there is no need to buy huge amounts, it is often the case that a considerable investor will buy a large plot and then divide it and sell the smaller plots, by doing this, they make land more affordable whilst making a profit.

Some hold the belief that the price of land rises slowly and hence as an investment opportunity is will have limited short term returns. This is not the case; land can rise in price in the same way as property, sometimes by as much as twenty percent in any annual period. Land that is ripe for development can be closely linked to the property market; on the other hand, an isolated piece of woodland is unlikely to rise in price quickly.

Many believe that to be a land investor you must have specialist knowledge to achieve a decent return. Naturally investment is always going to be a risk, so by minimising the risk you increase the chance of profits. You do not need the know-how to take soil samples or legal expertise to divide it into sub plots, these tasks can always be passed onto contractors. By following the press it is possible to gauge the state of the market and assess any risks; the internet is also a useful tool for this purpose. When starting out, it is normally advisable to invest in plots in your local area as then you have knowledge of the area, and subsequent worth of any particular piece of land.

Hopefully this article has gone some of the way to improve the view of land investment opportunities. By understanding that it is an accessible, realistic and above all cost effective way of making money, it is possible for many to buy plots either for a quick turnover or even for their dream home. So next time a plot comes up for sale in your local area, consider it as an opportunity to invest and reap the rewards that many in the country are already experiencing.

Property expert Thomas Pretty looks into why Scala Land Group investment opportunities are worth pursuing.

Home improvement has become a hot topic and even hotter investment over the years. Many people are adding on and upgrading, educating themselves on the right home improvements and additions that will make their home and financial investment stronger.

One of the top tricks to home improvement, however, is labor. From the start of the project to the end result, if you do not have a lot of experience in home construction, the best suggestion is to get the right contractor. If you do have experience in home construction, but will want a helping hand, the right contractor on your project can make all the difference.

It used to be that contractors would only entertain the idea of working with you if you had a lot of money or were a celebrity of sorts. Nowadays, however, with fewer and fewer people making significant hundreds of thousands of dollars types of home improvements, contractors have become easier to find.

Many contractors now specialize in the side upgrades and improvements that the average homeowner is interested in. However, just because the contractor calls you back does not mean that he or she is the best person for the job. How can you tell if you have found the right contractor for your home?

What is his reputation? Before you allow a contractor to make any serious changes to your house, it pays to see what he has done before. Call up other construction companies or other local industry experts like your favorite plumber to see what the contractor has done before. Use search engines to google his or her name to see if there are any comments online.

One important thing to consider is how many references he has. Even a bad contractor could convince some clients that he did a good job. If the contractor has a long list of references, they are both experienced and well-liked. Doing your research now can save you future heartache.

Does his business card have a local address? If the contractor gives you his physical address, he is much less likely to skip town and drop the job at your home. If he has a post office box, do not immediately dismiss him, but you will need to get more information on this individual before you begin.

What are some things that should concern you? If the contractor wants cash up front and only cash will do, warning noises should be going off in your head. If he wants cash, he is most likely avoiding taxes and possibly doing other illegal actions like hiring illegal employees and other mischievous problems. If he balks at applying for the permit or would rather have you do it, do not hire him.

Permits are a complicated and serious task and one of the top reasons you hire a contractor. If he is asking you to do it, it could mean that he does not have the right licensing or has been barred from doing it due to past indiscretions on other home jobs. No matter what, this is a bad sign for a future employee of yours.

Sell My House to a local home buyer?

When it comes time to sell a home, curb appeal can be tremendously important. From the start, your home needs to make a solid first impression that will carry the future home buyer into the house on a positive note. Even if your home looks wonderful, however, your neighbors house and the surrounding community can play a role in curb appeal. No matter how much fresh paint or new landscaping dots your front lawn, you will need to worry about your future buyers seeing the eyesore next door.

Eyesores are a common problem. Studies have shown that more than 60% of all homeowners think they have a neighbor that is making their street look bad by not taking care of their home fronts. Roughly 20% of these individuals even claim that they are the cause of the problem! Life can be busy and things like tall weeds and grass, dying lawns, junk in the lawn or peeling paint can be projects that are pushed from one weekend to the next, until the home is an official eyesore.

The crumbling house next door might be something to avoid when you live in your home, but when you are trying to sell, that eyesore now becomes a liability to you. Especially in buyer driven real estate markets, the eyesore next door can translate into lost revenue for you. They will become yet another negotiating tactic for the appraiser and the future home buyer.

How much can you stand to lose from living next to an eyesore? Some calculations go as high as 10% off the value of the home. Of course, different markets will see a different percentage taken off, but all in all, the eyesore is a poor value assessment for your property. What is a homeowner to do?

There are two types of people that have homes that are in disrepair. The first type cannot physically or financially afford to maintain their home and the second are those who are ignoring the common courtesy and trend of maintaining a home. If the home is rented out, you can try contacting the owner well in advance of putting your home on the market. In addition, you can build a group effort that will allow homeowners with limited funds the ability to apply for funds to keep up the exterior of the home.

There are laws that will prohibit certain behavior that can help you address the issues your eyesore has created. For example, there are certain municipal codes that will not allow you to stockpile wood on your property for fear of attracting animals.

However, the smartest move can be to raise your asking price above what you had originally planned. That way, you can negotiate down due to the eyesore next door, but still come out on top with the price that you had initially aimed for. Just a little upkeep can significantly improve the outer appearance of any home, but dealing with an eyesore can be an important part of your home price negotiations when selling your home.

Sell My House to a local home buyer?

Reverse mortgages are mortgages where the lender pays the borrower instead of the other way around. In the event of reverse mortgages, seniors need only be 62 years or older with equity in their home.

There are no requirements like credit score or income or anything else. Basically seniors with equity in their home and over the age of 62 can qualify.

Reverse mortgages require you to get counseling from a 3rd party advisor on whether or not a reverse mortgage is right for you. This mandated counseling is to specifically prevent seniors from being taken advantage of.

One of the main questions is what these funds from a reverse mortgage can be used for. Reverse mortgages funds can be used for anything including paying off an existing mortgage, traveling, home improvements, or simply enhancing the standard of living.

There are several websites that discuss reverse mortgages and provide details for seniors. Getting started with a reverse mortgage is usually done with a competent loan officer that can give you details, tell you how much you can qualify for and provide some insight into whether or not a reverse mortgage is right for you.

After this initial conversation with a reverse mortgage broker or loan officer, you will then need to proceed with either the paperwork or the required counseling with a 3rd party. Your loan officer will provide you with a list of counselors you can communicate with to discuss the reverse mortgage, your financial situation and alternatives.

This is the basic place to get started. You can find reverse mortgage lenders by searching on the internet or contacting local mortgage brokers in your area.

Reverse mortgages aren’t for everybody, but they can be used successfully to assist seniors who may be living paycheck to paycheck.

Many seniors choose to use this reverse mortgage to pay off an existing mortgage. You should inquire as to whether or not you’ll be able to do this or to use the mortgage to purchase a new home with a single transaction.

The great part about a reverse mortgage is that it can be a tool to aid in retirement not only for seniors having a difficult time with their finances, but also for seniors who are looking to take that trip they’ve always wanted to take or visit the grandkids more often.

Some seniors use this reverse mortgage to increase the equity in the home through home improvements as well which can put them in a better situation to refinance the home if they’ll be leaving it to their heirs or an estate.

Brian Armstrong is a loan officer in the state of Utah and is licensed to help seniors establish a Utah reverse mortgage.

You can contact Brian through his website where he provides information on reverse mortgage in Utah and also helps seniors in Idaho and Montana.