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For more information on buying property and retiring overseas and for all the information you need to decide for yourself if this is the lifestyle for you visit: http://www.costaricalandlots.com
January 24, 2006
After another stellar year that saw home prices continue to climb and sales of existing homes smash one record after another, there seems to be little disagreement among economists, builders and real estate execs that Canada?s hot housing market is finally due for a protracted slowdown in 2006. But amidst widespread reports of a bursting housing bubble south of the border, many homeowners and potential homebuyers in this country are wondering exactly what the nature of an impending slowdown in Canada will be? In particular, will house prices tumble like many high-flying technology stocks did back in the year 2000?
Fortunately, the answer is a resounding ?no?. That?s because fundamental factors like solid affordability, and strong job and income growth have been responsible for much of the robust housing activity on this side of the border, in contrast to the excessive speculative buying evident in many major U.S. markets. This is a key reason why national home price gains of around 9 per cent in Canada, have been much slower than the double-digit gains seen in the United States. It is also a key reason why a ?correction? in Canada?s housing market will not be necessary.
Instead, housing demand in Canada is likely to gradually cool down to a more sustainable pace in 2006. That?s partly because borrowing costs are expected to only gently rise this year but remain low from an historical perspective. Meanwhile, high levels of immigration and net migration into major urban centers of Canada are expected to continue strongly supporting new homebuilding. So while housing starts are expected to simmer down from 223,900 units in 2005 to about 195,000 in 2006, they will still be at very robust levels relative to their long-term average of about 175,000 units per year.
Slightly softer housing demand together with a relative improvement in the supply of available homes should also help to unwind the generally tight conditions underscoring most Canadian housing markets in the last few years. This improved balance between supply and demand will ultimately mean that the growth of home prices will cool down to a more sustainable pace ? around the low- to mid-single-digits over the next two years. In short, although Canada?s housing market is poised to come off its peak in 2006, the slowdown will simply amount to what economists deem a ?soft landing.?
Is it still a good time to buy?
Whether they are looking to buy for the first time, or they are looking to trade up, many potential homebuyers may be wondering whether 2006 will still be a good time to buy a home. Of course, the answer typically depends on a host of factors including one?s personal financial and lifestyle situation. But generally speaking, a soft landing in the housing market should result in favourable conditions for prospective homebuyers for two reasons. First, although borrowing costs are expected to move slightly higher this year, their impact will be partly offset by healthy disposable income growth along with a slower rate of home price appreciation. As a result, housing affordability will still remain extremely attractive from an historical basis. For example, the percentage of household income needed to service the costs of home ownership is expected to mildly erode to about 30.4 per cent this year from about 29.9 per cent in 2005, but that is still considerably better than the average rate of 32 per cent over the 1990?s.
Second, a better balance between buyers and sellers in 2006 means that prospective homebuyers will find themselves in a stronger position to negotiate on prices compared to the past few years. That?s because buyers will have a bigger and more varied selection of homes from which to choose from given the greater number of available listings coming onto the market in 2006. Consequently, buyers will have the luxury of taking more time to find a home that is right for their needs, without fear of either losing out to another buyer due to a potential bidding war or simply being priced out of the market because they waited a little while longer to make a decision.
Homeowner wealth will remain intact
Over the last few years, the swift pace in which house values have risen has far outstripped the pace at which mortgage debt has been growing. As a result, the amount of equity that most Canadians have built up in their homes, defined as the market value of their residences minus their mortgages, has grown for five straight years after trending downward over most of the 1990?s. Correspondingly, rising home prices have been a big reason why the net worth, or wealth, of Canadian households has grown by over 20 per cent during the same period.
Given this development, it is not surprising that many people believe a house is one of the best investments they?ll ever make. Over a lifetime, they would probably be right especially since every penny made on a principal home can be pocketed as these gains are not taxed when they are realized. That said, many long-time homeowners who have experienced previous housing cycles can also tell a story or two about how a home can also be the most expensive mistake one could make, should a homeowner be forced to sell when prices are down.
The good news is that as Canada?s housing market slows this year, the wealth that existing homeowners have recently accumulated should remain as safe as the foundations on which their homes are built on. As we noted above, that?s because the expected slowdown in housing activity should merely result in a better balance between supply and demand. As a result, house price gains can be expected to slow to a more sustainable rate, with the likelihood of outright prices declines very slim in most major markets of the country.
But while the short-term situation for housing prices still looks favourable, what about the longer term? In particular, some observers have expressed concerns that as the leading edge of the large baby boom generation approaches retirement, housing prices could collapse as this group increasingly unloads their family homes to a smaller pool of younger buyers. While no one can forecast the longer-term with complete accuracy, it is important to keep in mind that not all baby boomers will be retiring at the same time. That?s because this demographic group currently spans in age from just above sixty, down to forty years old. So while many older boomers may be pondering retirement in the next few years, their younger counterparts with growing families will still be looking to trade-up to larger homes. This should help to keep the housing market broadly in balance and therefore keep prices stable over the next decade.
It is also important to note that even as older boomers start to retire, they will not give up on homeownership right away. In fact, the fastest growing segments for homeownership are those above 65 and boomers will certainly not reverse this trend given their high levels of wealth. Consequently, aging boomers are likely to only reshape the types of housing that is in demand over the next two decades but they are unlikely to cause a deep contraction in overall home prices.
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http://www.tomwhitfield.ca
February 7, 2008
There are still several months left in 2006, but if you’re hoping to sell your home by the end of the year, it’s time for you to get serious. The reason? This year has proved to be far more difficult year for sellers than last year’s record-setting market.
The real estate market in 2006 has been characterized by a distinct move toward buyers. Selling a home is no longer just a simple matter of pounding a sign in the yard and then waiting for buyers to bid aggressively for the right to buy. As 2006 rolled along, the growing " buyer’s market" was caused by an oversupply of homes for sale and an undersupply of qualified buyers.
Nationwide, the volume of home sales has continued to decrease slightly, according to the National Association of Realtors, although the median price of homes in most areas has remained about the same. What that translates to is that a full-scale price correction hasn’t taken place, but the days of double-digit price inflation are gone, at least for the foreseeable future.
To help beat the odds, you’ll need to become a motivated seller, which is a buzz word buyers look for when searching for potential homes, especially when they’re being given more and more houses from which to choose. If you’re going to attract a buyer quickly, you’ve got to be conscientious in marketing your home. Here are four home selling steps to help you.
Clean to Sell
You’ll need to spruce up and clean up your home. In a buyer’s market, your home has to look its best at all times if it’s going to stand out from the competition. Repaint your home, inside and out, to make it look and feel fresh and clean. Painting is the most cost effective improvement you can make when marketing a home.
Repair to Sell
Look around your house and repair, paint, or clean everything you see that will create a negative impression in a buyer’s mind. If you’ve lived in your home for a long time, it can be very helpful to ask a friend to walk through and make comments on the things they see that you might have missed simply because you’ve lived with them for so long.
Pay special attention to the kitchen and bathrooms. These are deal breakers if they’re not spotless and inviting, so keep them clean and uncluttered. They’re the two most important rooms in a house, as far as buyers are concerned, so don’t neglect them.
Stage to Sell
Besides deep cleaning and decluttering, consider home staging strategies. Take the best feature in your home and play it up so that home shoppers remember your home more than the others they preview.
Price to Sell
Start by making sure your price is very competitive. Thus far, 2006 hasn’t been a year for testing the water. It’s been a year for becoming a fiercely competitive seller, and one of the tools at your disposal is the price of your home. If you’re not prepared to be realistic about your home’s price, chances are you should stay put and wait for the market to improve.
It’s a much tougher market out there in 2006 than it has been in the past five years, so if you want to become a successful seller, you’ll have to adopt new strategies to give your home an edge in a buyer’s market.
Copyright © 2006 Jeanette J. Fisher
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Free home selling information and teleseminars at http://www.sellfast.info
Home Staging Expert Jeanette Fisher teaches home sellers five ways to get top dollar for their home. Home Staging Information
Low risk investments can yield high returns and here we will outline one that can do so, and has significant income advantages as well.
We all know property is a good low risk investment, but a way to turn into a high yielding investment is to buy in the right location.
Many people are put off property investment, because they think it is to complicated or expensive, however this one is not.
So what is the right location?
Costa Rica, just 3 hours from the US by direct flight has and is, providing stunning gains for savvy investors.
Consider this:
A $30,000 investment in property near the town of Jaco just 14 years ago, is worth up to $800,000 today!
Can your shares mutual funds or even your high risk investments rival this growth rate?
But this investment gets even better..
Not only do you have an asset going up in value. You could also get valuable rental income from the booming rental market, as well a FREE vacation home, to use whenever you want.
RISK
How low risk is this investment?
Well, consider these gains have been ongoing for years and the market has tended to increase in a steady upward curve and it certainly does have low risk, but also fantastic grwoth potential as well.
With investment rising, as overseas investors, buy cheap property in one of the most beautiful and stable countries in the world and the outlook for the future looks good as well.
Consider the above facts and you will see that you can get low risk and high returns from an investment.
Other advantages of this investment include:
It’s tax efficient, you get the same rights as residents when buying and finally, there are many experienced realtors to help you select the best properties.
Its all about profit potential
Don?t be put off this investment because you think it is complicated, it is not and if you are interested in building significant profit potential with low risk, you could make gains that will make your present asset manager envious.
Discover this low risk investment for yourself and you may be glad you did.
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FREE REAL ESTATE ADVICE
NEWSLETTERS, PDF, DVD’s AND MORE
For more info on all aspects of investing in overseas real estate visit our website for a huge resource of articles, features and downloads and at http://www.net-planet.org/index.html
February 6, 2008
Buying cheap property for sale and selling it quickly and making huge gains is the aim of most property speculators, however buying cheap property for sale often leads to disaster for many property investors.
They simply don?t understand one fundamental fact:
Cheap property for sale is cheap for a reason!
No one wants it.
Now, some cheap property for sale will become expensive but most will not and it is here you need to balance the risk to reward carefully and keep these two points in mind:
1. Don?t buy markets that have not turned up
If you are buying an area of your home country or are buying cheap property for sale in the booming overseas markets don?t buy a market that may take off for reasons you believe in, look for the facts to point to it has taken off and that means rising prices.
Of course, we all want to buy the bottom of a market but the risk is high.
If you want to be a pioneer go ahead, but keep in mind some made huge rewards and most got the arrows and its the same in property investment.
Property trends last for decades, so what if you miss the absolute bottom? If you can still buy cheap property for sale and make triple digit gains who cares?
2. Buy only locations where the infrastructure points to higher prices
This means buying the cheapest property for sale with lowest risk to highest reward.
Normally, this means buying near new infrastructure.
New roads, airports, marina?s etc are great locations. When their built, the herd comes in and property values soar.
Don?t buy a property in the middle of nowhere and think that it may increase in value!
You may be waiting a long time to see grow, if at all.
Cheap property for sale a great market
A fantastic market offering affordable property is Costa Rica.
With beach view property up to 70% less than in the USA and a rising number of retirees and second home buyers coming in from abroad and you could be piling up some huge gains with the right location.
At present the central Pacific coast near Jaco offers great returns with low risk and is rising in popularity.
Buy cheap property for sale here and you could be looking forward to some fantastic capital growth potential
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FREE REAL ESTATE ADVICE
NEWSLETTERS, PDF, DVD’s AND MORE
For more info on all aspects of investing in overseas real estate visit our website for a huge resource of articles, features and downloads and at http://www.net-planet.org/index.html
February 4, 2008
Search engines, such as Google, Yahoo and MSN send out software robots, frequently called spiders, to collect data from websites for indexing in their databases. These spiders jump from one site to the next by following live links, so the more inbound links you have to your site, the better. First, because search engines like Google consider them ?votes? for your site which may increase your Google Page Rank and, second, because web surfers may find those links and click-through to visit your site. That?s the upside of links.
The downside is acquiring links takes a lot of time. You can pay someone to post thousands of links for you, but adding too many too fast may result in your site being penalized by search engines with a lower?even zero?rank or being dropped completely from search results. The odds of that happening are slim but must be considered.
Before you start acquiring links, decide if you want to handle link exchanges manually or semi-automatically. A link exchange software program can automate some of the process but it still requires you to request, review, accept and post links for your site. Some programs allow you to set filters to block the types of sites you won?t accept, while automatically searching for the types of sites you seek. Before you purchase any link program, check with your webmaster or the company hosting your site to make sure the program is compatible and can be installed on their system. Try a Google search for link exchange programs and review their features and pricing, or ask your webmaster for a recommendation.
You don?t have to use a separate program to start a link exchange campaign. You can simply designate one or more pages on your website as Links, Resources or Partners and manually post each link partner’s information. This is a good arrangement if you are self-managing your website but could get expensive if you pay a webmaster for changes and updates.
To find out how many sites are linking to you, enter your domain name (yoursite.com) in the search field (not the address line) of Google. The results will show not only sites linking to you, but how your site appeared the last time Google ‘cached’ or saved it, sites similar to yours, sites you link to, and pages containing the domain name for your site.
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About the Author:
Sharon Hassler is author of the NEW downloadable ebook, ‘So You Think You Want A Website: Internet Marketing 101 for Real Estate Agents.’ She is owner/manager of 4 web page and directory sites for professionals in the real estate industry. Prior to founding Go Get Experts, LLC, in 2004, she served as Communications Manager for First American Title in Arizona and was a real estate agent, then a loan officer in Southern California in the 80s. For more about the author, real estate agent directory, and the ebook, please visit http://www.GoGetRealEstate.com.
January 30, 2008
Mortgage Banks and Brokers everyday are closing home buyers and refinancers at a higher rate than they deserve! This artificial upping of the rate and the revenue created by doing so are hidden from the customer. This hidden ripping-off of the mortgage consumer is called Yield Spread Premium overchaging if the loan is originated by a broker and Service Release Premium overcharging if the loan is originated by a mortgage bank…you know, Countrywide, Wells Fargo, or Bank of America.
Prof. Howell E. Jackson, Associate Dean for Research and Special Programs Harvard Law School, testified before the Senate Banking Committee on January 8, 2002, and testified to the following:
…the vast majority of borrowers pay yield spread premiums - on the order of 85 to 90 percent of all transactions. Moreover, the average amount of yield spread premiums is quite substantial, on the order of $1,850 per transaction, making these payments the most important single source of revenue for mortgage brokers. In other words, contrary to the Department’s assumptions, yield spread premiums are not an optional form of financing made available to a limited number of borrowers with special needs. Rather these payments constitute by far the largest source of compensation for mortgage brokers and are imposed on almost all borrowers who obtain mortgages or refinancings through this segment of the industry.
If Professor Jackson testified on Service Release Premium that mortgage banks receive, I’m sure his statments would echo the same as above.
The Governments own numbers, which are grossly understated I might add, say this Yield Spread and Service Release premium overcharging costs American home owners $16,000,000,000 a year…each any every year!
To beat these guys at their own game, you simply must learn how they price out a loan including this rip-off! Reading this article is a good start, however, the complete guide to eleminated Yield Spread and Service Release Premium overcharging is outlined in my ebook, Mortgage Secrets Exposed!. See the resource box at the bottom for more information.
Understanding how to price out a loan by reading Mortgage Bank Rate Sheets is really quite easy though it may seem intimidating at first. It will all become clear as you read this narrative on how we do it at our company, Integrity First Mortgage, Inc. in Denver. So, settle in and take the 10 minutes to read this article and understand this practice.
Doing so will save you 10s of $1,000 over your lifetime owning and financing houses. A small price to pay indeed!
Here we go!
All of mortgage lenders we work with at Integrity First Mortgage, Inc., furnish us with rate sheets on a daily basis via the internet or by fax. We follow the rates several times a day in order to properly quote the best available rate and term to our customers. When reviewing the rate sheet, we also determine which rate will NOT create a rebate from the lender known as a Yield Spread Premium. We believe upping your rate to make additional revenue over the 1% origination fee is deceptive, dishonest, and a bad business practice?believe me, other companies do not hold that opinion.
Let?s use the rate sheet data below to demonstrate how we determine the rate that we quote to our borrowers. We will also show you using the corresponding HSH Survey data how other Brokers and Banks are making enormous undisclosed profits in the form of Yield Spread Premium.
Lender Rate Sheet (see below ) data was collected from a real Wholesale Lender?s (Ampro Mortgage ) Rate sheet dated 03/10/2006. You can confirm the HSH data is real as well by visiting HSH.com.
30 Year Fixed
Rate 15 Day 30 Day 45 Day
5.750% 1.350 1.475 1.600
5.875% 0.611 0.736 0.861
6.000% 0.039 0.164 1.826
6.125% (0.392) (0.267) (0.142)
6.250% (0.773) (0.648) (0.523)
6.375% (1.180) (1.055) (0.930)
6.500% (1.623) (1.498) (1.373)
6.625% (2.029) (1.904) (1.773)
6..750% (2.280) (2.155) (2.030)
HSH ASSOCIATES The Nations Largest Publisher of Mortgage
The Nations Mortgage Market: Average Rates for Residential Mortgages Week ending March 10, 2006
Owner-occupied 1-4 Family and Condos: Previously Occupied Homes Source: HSH Associates
National Ave. SURVEY CONVENTIONAL MORTGAGES
30 Yr
6.51%
In our example, we will quote our borrower a 30 year rate that carries a lock period of 30 days. If we are seeking to earn only a 1.0% origination fee and NO yield spread premium (back end fee), we will quote the rate of 6.000%. According to the rate sheet, 6.000% actually costs .164% Discount payable to the Lender not Integrity First Mortgage. On this rate sheet, 6.000% is as close to par pricing as we can get. As you can see the next higher rate, 6.125% creates .267% of Yield Spread Premium and that?s not good. (YSP is shown in (.267) parenthesis). So with this example, look at the costs for a loan at 6.00% with us.
Rate: 6.000%, $200,000 Mortgage Loan x 1.0% Broker Origination Fee + 0.164 Discount = $200,000 x 1.164% = $2,328.00
Now we will show how everyone else does it! First realize that banks and brokers don?t usually quote you the rate you?ll close with?they bait-and-switch with low-ball rates and artificially lowered closing costs to get you to apply with them. Then on closing day, the rates and costs are higher than you expected, but they claim their Good Faith Estimate was in deed just that?an estimate. You?ve got the moving van idling in parking lot, so you sign. They count on the fact you are painted into a corner and have but one option?sign.
How do I know this to be true? One reason is 15 years of asking folks, ?How did your last loan go?any surprises at closing?? About 85% of those folks answer, Yes to that one. Second, every closing exit poll conducted by Fannie Mae and Freddie Mac show the same results. But the most compelling reason is up above on HSH Survey data. It shows for the week ending Mar 10, 2006, the National Average interest rate on CLOSED Loans was 6.51%!
(NOTE: HSH has an agreement with their 2000+ survey participants to give them closed loan rates, not lobby rates or other teaser rates.)
I guarantee you that all those folks did not sign a Good Faith Estimate at application showing them 6.5% because that is not the rate advertised all over the news, radio ads, and the internet over the prior 4-6 weeks when these folks were applying. The loan officer for the bank or broker could not very easily advertise 6.00% and have them sign at 6.5%…everyone would balk at that. So they show them 6.00%, get them to sign, and then sometime during processing or just at the closing, the borrower is informed his rate had to be adjusted upward. The loan officer will get very creative on explaining all the reasons why this had to happen, but suffice it to say, this was the plan from the beginning. So with this rate sheet data, let us look at what they made.
Rate: 6.500%, $200,000 Mortgage Loan x 1.0% Broker Origination Fee +1.498 YSP = $200,000 x 2.498% = $4,996.00
The banks and brokers simply cannot forgo the Yield Spread Premium overcharging because at the very least it DOUBLES their income for each loan!
Now with this tutorial and our daily rate sheet updates you can protect yourself from the most egregious consumer rip-off in history.
Good Luck!
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Rob K. Blake, author of the book Mortgage Secrets Exposed! has been teaching folks for the last 15 years all the tips and tactics to save $1,000s when shopping for a mortgage. For more home loan tips, Visit his website at www.themortgageinsider.net .
Many folks believe getting a handful of Good Faith Estimates and picking the company with the lowest cost estimate is the right way to shop for a mortgage.
After 15 years in the mortgage industry, I can unequivocally say?boy, is that wrong!
Once folks learn the frivolity of using estimates, the most asked question I hear is, ?If estimates are out, how do I pick one mortgage company over another??. To answer that question, I put together the ?Run, Don?t Walk? Checklist for mortgage shoppers. To use the checklist, remember, if the company/loan officer you?re evaluating, possess, says, or demonstrates any item on list?.Run, Don?t Walk!
Well, here we go: The Checklist
1. It?s a bank?.you know Countrywide, Wells Fargo, Washington Mutual etc, Banks are not the low cost providers of mortgage money ?big surprise, right! And they don?t have to disclose their overage (ie. YSP or SRP).
2. They don?t have you sign anything?no application, good faith estimate etc. (self-explanatory)
3. They have you sign blank documents. Signing blank documents is worse than no documents.
4. They are a friend or family member…once you learn the truth, so long friend.
5. They verbally lock loans?no lender lock confirmation. If they won?t send you a lender lock confirmation, they are hiding the YSP.
6. They play stupid or get irritated when you mention YSP (yield spread premium).
7. They promote loans with a pre-payment penalty. They make more YSP with a pre-payment penalty unless the lock confirmation shows otherwise.
8. They are uncomfortable or irritated discussing their compensation. If they can?t discuss and explain their total compensation without equivocation, run!
9. They push Adjustable rate mortgages (adjustable rate mortgage) when your hold period is 5 plus years or when the market has obviously changed to an increasing rate market.
10. They push an interest only loan when your hold period is 5 plus years or when the market has obviously changed to an increasing rate market. Interest only loans typically are used to obfuscate the underlying adjustable rate.
11. They push an FHA and/or VA loans when they haven?t attempted a conventional approval first. Conventional lending now provide 100% and bruised credit programs which formerly were the main reason for the FHA and VA programs. They are now obsolete.
12. They push a sub-prime or bruised credit loan without attempting an ‘A’ credit loan first.
13. They do not get immediate computer approval.
14. They insist on a personal meeting for application designed to pressure you into signing.
15. They promote a ?fixed fee? or ?No-Cost? loan?.there is no such thing! Yield spread premium rate hiking will cost you thousands over the life of the loan.
16. They won?t disclose their exact total compensation. This includes all revenue generated by origination fees, mortgage broker fees, processing fees, and all ?back-end? compensation also known as yield spread premiums (for brokers ) or service release premiums (for banks ).
17. They push an interest only loan and tells you to pay extra principal payments.
18. They promote Adjustable rate mortgages in an increasing interest market.
19. They can?t explain how the ADJUSTABLE RATE MORTGAGE index and margin come together to make an ADJUSTABLE RATE MORTGAGE rate.
20. They can?t explain what the initial, periodic, and lifetime caps on an ADJUSTABLE RATE MORTGAGE are.
21. They don?t know the difference between a convertible and a non-convertible ADJUSTABLE RATE MORTGAGE.
22. They push negative amortizing loans like the ?pick-a-payment? or ?option? Adjustable rate mortgages so predominant in radio and TV advertising these days.
23. They don?t know the difference between payment caps and rate caps on Adjustable rate mortgages.
24. They work part-time in the mortgage business.
25. They are new to the business and therefore lacking in experience.
26. They were referred by a Website lead portal like LendingTree and others. These lending sites increase the cost of the loan. In the case of LendingTree, the increase cost is over $700!
27. They were referred by a real estate agent. They will probably be related to the loan officer or have some financial arrangement that will increase the cost of the loan for you.
28. They work for the builder mortgage company. See 27 above.
29. They work for the real estate mortgage company. See 27 above
30. They are also your insurance agent or financial planner. See 27 above.
31. They claim or allow you to assume, you can get the lowest rate simultaneously with a No-Cost or Flat Fee loan. An example is when you see a low rate on a Ditech commercial flashed right next to a flat fee offer of $395?they don?t go together, but you?ll only discover that after you call.
32. They use massive TV or Radio Ad campaigns. The cost of those ads gets re-couped by increased cost to you. Yield spread premium to the rescue!
33. They collect a huge deposit. As in the case of LendingTree, where they collect a NON-refundable $600!
34. They quote you a rate without first gathering important, rate-changing, information like, type of loan, credit score, loan-to-value, and income qualifying vs. stated income, etc.
35. They don?t mention mortgage insurance when the loan to value is over 80%.
36. They can?t get a loan done in less than 30 days.
37. They push ?pay off your credit cards with a Home Equity Loan. These loans are by definition adjustable rate loans usually based on the Prime Rate which changes with each Fed change?not good.
This checklist should be used with a healthy dose of common sense. I always tell folks to trust their instincts as well. Knowing that your BS meter is going off at high volume should not be ignored. These points allow you to ask the loan officer the question, get the answer, and then listen for the alarm to sound. Of course, if you don?t listen for the alarm and act on it, no amount of advice will help you.
Good Luck!
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Rob K. Blake, author of the book Mortgage Secrets Exposed! has been teaching folks for the last 15 years all the tips and tactics to save $1,000s when shopping for a mortgage. For more home loan tips, Visit his website at www.themortgageinsider.net .
I can?t tell you how many times over my 15 years in the mortgage industry when I ask potential clients how they picked their agent, I hear, ?Oh, my brother-in-law is an agent?.
Yikes!
We all know someone in our circle who thinks making a bundle selling real estate is right around the corner but let me assure you, for 99.99% of them, it is not.
The truth is the average earnings for an agent run about $35,000 per year.
According to the Bureau of Labor Statistics:
‘The median annual earnings of salaried real estate sales agents, including commissions, were $35,670 in May 2004. The middle 50 percent earned between $23,500 and $58,110 a year. The lowest 10 percent earned less than $17,600, and the highest 10 percent earned more than $92,770.’
Let?s break that down:
The average home price where I live in the Denver area is $240,000. Let?s multiply that by half of a normal commission or a typical 2.8% for the buyer?s agent. That?s $6720 per closed deal for the buyer?s agent. Now let?s divide $35,670 by the average commission to discover the number of successful transactions the average agent completes per year.
$35,670 ? $6,720 = 5.3 deals per year.
Ouch! Five closed deals per year hardly make one a ?pro?. In my mind, it makes them a rookie and at that pace, they?d stay a rookie for over 20 years.
My first month as a full-time, commission-only loan officer, I completed 23 closed loan transactions. I was so green then I didn?t know what I didn?t know?but I had the benefit of multiple transactions per month as my teacher. Still, I made mistake after mistake, learning something new from each deal. Now after 15 years and thousands of transactions, I can finally say I?ve earned the title of ?pro?.
Can a real estate agent doing 5 deals a year say that?
I think not.
So, when it?s time to find a real estate agent, you owe it to yourself and your family to ignore the fact you have a cousin with a license. Ignore referrals from friends and family altogether. Don?t feel obligated to use these sources. Don?t be lazy. Do your own research. Interview a number of agents and find a real ?pro?.
Remember, this is the largest single financial transaction of your life. Give it the respect it deserves. Hire the most experienced professional you can lay your hands on!
I can hear you now, ?Okay, Rob, how do I find the most experienced professional??
Good question and one I answer in my free report, ?How To Pick A Real Estate Agent?. I will say, as you?ve probably guessed, experience counts. The best way to determine experience is by the number of transactions an agent is handling monthly or yearly. The agent?s production is going to give you the best indication of how committed they are to the profession. Is the agent a part-timer who’s just dabbling in real estate sales - or is the agent a full-time, productive, professional whose livelihood depends on their ability to repeatedly close real estate transactions?
But, I digress. I?m supposed to be advising you on how NOT to pick a real estate agent.
So let?s recap. How not to pick a real estate agent:
1. Don?t use a family member
2. Don?t use a family friend
3. Don?t use one of your friends
4. Don?t use a referral from a family member
5. Don?t use a referral from your friends
I hope you actually use this advice on your next house hunt. If you don?t, you?ll pay the price. I know it sounds a little dogmatic, but after 15 years of dealing with countless rookie agents, I know of what I speak.
Happy Hunting!
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Rob K. Blake, author of the book Mortgage Secrets Exposed! and host of The Mortgage Insiders Show, has been teaching folks for the last 15 years all the tips and tactics to save $1,000s when shopping for a mortgage. For more home loan tips, Visit his website at www.themortgageinsider.net.
Investors are everywhere when you are trying to avoid foreclosure. Foreclosure hunters, as they are called, are just waiting to pounce.
Be very careful.
They could be someone with real knowledge of the real estate world but instead of using their powers for good they use them for evil.
Or?they could be someone who just watches too much late night TV. After purchasing a package or attending, they think they know everything there is to know about foreclosure.
One thing you do know for sure is they are not there to help you. They are there to make money. Telling you they can help stop foreclosure is how they get in the door.
Let me explain some of the techniques these investors or foreclosure hunters use. It depends on how much equity you have. If you have 20% or more equity in your home, usually this is the technique they use. First, they say you can stay in the house. This seems to be a real selling point for people trying to stop foreclosure. Second, they say they will pay your back payments and bring you current on your mortgage. All you have to do is sign all these papers?..one of them being a Quit Claim Deed giving ownership interest of your home to the investor. Another is a rental agreement making you their tenant.
The goal of the investor is to get you out of the home as soon as possible. ?But they just told me I could stay.? That is how they got you to agree to all of this. People trying to stop foreclosure are so stressed out that they just want someone to tell them everything is going to be ok. Unfortunately, I used to work for someone who used this technique so I know of what I speak. I have seen it first hand. The really weird thing is many times another foreclosure hunter would get to the homeowner and they would sign that investor?s Quit Claim Deed too. It was a game between the investors to see who could be the last one to record their deed at the county before the sale date.
Let?s get back to the technique. After you sign the paperwork, you will find that in there somewhere the investor reserves the right to change your monthly rent payment. Their goal is to broadside you with a payment you cannot afford. Once you default on that payment, they use their rights as a landlord to evict you from the home. Sometimes people were evicted before the investor had even paid the back payments?.so they weren?t out any money at all! The investor immediately sells your property and pockets your equity. Keep in mind, judges hate these investors. If any of these people would have shown up to court during the eviction process they probably would not have lost their homes. The judges try to keep tenants in the homes as much as possible and that goes not only for investors but any landlord.
What if you are trying to stop foreclosure but you have no or little equity in your home? Unfortunately, these foreclosure hunters or investors have a spin on that too. If you have no equity and you are already down more than 2 payments there is really nothing anyone can do. But, watch out for anyone who says they can. This is what could potentially happen. In these situations, the investor will not tell you that you can stay in the house. You will always have to leave. They have you sign a lease option or a real estate contract ?subject to? the mortgages. Either way they just want control of the property but you have to remember you are still responsible for the mortgage(s). Now here is where the real scum come in. Like I said before if you are more than 2 payments down with no equity?be careful. After these investors gain control of the property, they will put another party in the home. The new renters will sign a lease option or rent to own document. The investor will ask for a sizable amount down and usually a higher than market rent amount. After they get the down payment from the new tenants, they disappear. Your mortgage never gets paid which they promised to do and now there is someone else living in your home and you don?t even have the right to evict them anymore. You were trying to stop foreclosure and you ended up being foreclosed on anyway.
This doesn?t mean that if you are not 2 payments down yet it couldn?t happen to you. I am just saying it is a 99.9% chance it will happen in the above scenario. These investors are taught by the late night infomercials that you try to get to people before they are more than 2 payments down. They also know that if something goes wrong and they need the money coming in from the new tenants to pay that gambling debt of theirs, they have no problem skipping out on you and leaving you facing foreclosure again.
Another thing to be concerned about is the lender. When you sign a mortgage note, there is a clause in there that states you will not transfer title and/or equitable interest to the property. Technically when you sign a lease option you are giving equitable interest in the property. The lender has every right at that moment to call the note due and payable.
Be aware of any ?investor? out there. Also, be aware of commercials, ads, or websites that say they can help stop foreclosure. Most of the time, they are just lead generating machines for these horrible investors.
If anyone proposes any of the things I have described above run like your hair is on fire!
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