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Financial Freedom Through Real Estate

Financial Freedom Through Real Estate
This is a Mortgage and Real Estate Blog that covers important real estate related strategies, laws, and wealth building techniques. This blog features several topics that will cover the homebuying, refinancing, and real estate investing process. The

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Articles

Is Now the Best Time to Acquire a Rental Property?
2009-04-11 21:54:00
In the last few weeks we have witnessed an encouraging uptick in the stock market and housing markets. It may be a sign of a bottoming out process, but who knows. One thing that is certain, mortgage rates have never been this low since we began tracking mortgage rates. Sub 5 percent mortgage rates on 30 year fixed loans are literally unheard of, but we are now experiencing them. Couple that with a more affordable housing market and this may be an opportune time to consider picking up a rental property. Such a move may payoff for you in five years and beyond, once we get out of the financial mess we are currently in. A rental property near major transportation and employment hubs will set you up for when the economy turns around. Homes located in these areas will be in higher demand. Since it is still a buyer's market, you can request that sellers (if they are not bank-owned properties) do some repairs before the settlement date. This will reduce the amount of work you will have to ...
More About: Rental , Property , Time , Acquire

HouseWealthy.com has been redesigned
2009-02-24 01:48:00
The main website for this blog www.housewealthy.com has been totally redesigned. In addition to covering real estate wealth building topics, it will also offer discussions, forums, tools, methods, and techniques for gaining financial self-sufficiency through utilizing residual income and renewable energy. Everyone wants control of their financial well being, but the means to gain control seems to be more elusive than ever. The path to fiscal stability is moving further out of reach. One thing the recent financial turmoil should be teaching us is that we can no longer depend on our employer, 401ks, or stocks to take care of us. We must become "HouseWealthy", which means we must create and grow our wealth in-house and not be solely dependent on the increased risk of outside sources. Please visit the newly redesigned main website (www.housewealthy.com) and leave us a comment. You can also register and post a question or tip for other users to answer or comment on.

How to be Financially Self-Sufficient in Today's Uncertain Times
2008-12-12 23:45:00
We have gone through some of the worst financial conditions that have been seen in the last 70 years. Everything from stocks, home values, savings rates, consumer spending, and all types of businesses have suffered greatly from the recent events. There seems to be absolutely nothing that is considered a good investment these days. In the past, if one investment sector had a downturn, there was always another that would pick up the slack. For example, when stocks plunged from a combination of the tech bubble and the 9/11 terrorist attacks, the real estate boom picked up the slack and money funneled into that sector. Initially, as real estate quickly cool in 2007, the thought was that stocks could start to pick up some of the slack. That line of thinking did not work this go around, as the severity of the real estate crash has affected everyone and everything. The biggest impact has been the tremendous loss of jobs, since this is the driver for consumer spending and the GDP hea...
More About: Times , Sufficient

Is real estate investing coming back?
2008-05-05 14:27:00
I have been on the lookout for some new real estate investments during the last few months. Most of the time, I have been met with unrealistic prices and expectations from the sellers. They still dream of the good ol days of 2005, where they could pick a number out of the sky and watch multiple bids come in. But now, things seem to be slowly coming back to earth. Whether it be a short-sale, or more favorably a seller that just needs to get out of a property, prices are starting to get to the levels where investors can consider coming back in and establishing sound rental properties. Based on the dynamics of the still depreciating market, rehabbing may be a little ways off, but rentals are starting to look attractive. I looked at a few houses this weekend in the D.C. metro area and after running the numbers, there are a couple that will receive offers. Of course, they will not be at asking price. I still believe that offers should be at about 80% of asking price, depending on...
More About: Estate , Real Estate , Real Estate Investing , Investing , Back

2008 Spring Real Estate Market
2008-03-13 18:51:00
For the past couple of Spring seasons, the real estate market has been in a slow, steady decline. Prices stopped rising at the breakneck pace that we have become accustomed to during 2001 - 2005. Based on that frame of reference, any reversal in appreciation started to look like the deal.But something seems different about the coming Spring of 2008. I am beginning to see price reductions unlike what has occurred in the past 2 years. It seems like the true reality of the real estate market is finally starting to sink in. I have witnessed price reductions of 25% to 50% of previous purchase prices, which was usually during 2005 - 2006. You may be wondering how a homeowner is able to take such a hit to unload a home. Well, it is not the homeowner directly taking the hit. These steep discounts have been due to what are called short sales. A short sale is when a lender agrees to sell a home at less than the mortgage balance, just to write-off the loss and avoid a costly foreclosu...
More About: Estate , Real Estate , Real Estate Market , Market

Jumbo Loan Rates Set to Fall
2008-02-16 19:35:00
Congress has just passed their economic stimulus plan that is supposed to put money in everyone's pocket so they can go out and boost the economy. This is the highlight of the plan, but it also covers another important provision that will be good news for homeowners and potential homebuyers. The conforming loan limit that is insured by Fannie Mae and Freddie Mac is $417,000. Fannie and Freddie are the government companies that buy and package mortgage backed securities from banks. Any loan amount over $417,000 is considered a jumbo loan and is not insured by these entities. Ever since the subprime fallout, these jumbo loans have become expensive and average about 1.25 percentage points higher than conforming loans. Wall Street is very reluctant to purchase these securities since Fannie Mae or Freddie Mac does not back them. The stimulus plan will instate a temporary increase in conforming loan limits to about $729,750, depending on your location. This means that these highe...
More About: Loan , Rates , Fall , Jumbo

2008 Refinance Boom May Be Looming
2008-02-02 16:45:00
With the slowing economy, talks of recession, the tick up in unemployment, and the volatile stock market, the 30 year fixed rate mortgage has slowly continued to drop. A couple of weeks ago, the Feds finally took steps to combat the signs of recession by cutting the Fed rate by a combined 125 basis points. Usually the Fed funds rate has little to do with fixed rate mortgages, but it usually does not take long for fixed rates to follow the trend. Long-term mortgage rates are already low and may go lower. Usually when the economy faces a possible recession, these rates drop. We all remember what happened to rates from 2003 ? 2005, after the 2001- 2003 recession. So, if history is any indication, there is a good possibility that rates can fall further. This is good news for potential buyers, but even better news for current homeowners with decent credit that want to refinance out of ARMs or higher rate fixed mortgages. Rates have not been this low in a long time, and it may be w...
More About: Refinance , Boom , 2008

Home Staging Helping Today's Home Sellers
2008-01-07 04:01:00
In order to sell a home in this market you must have a property that is in good condition and well priced. But one area that is often overlooked is presentation.Professional home stagers have been receiving more business and have helped increase the likeliness of a home selling. Prospective buyers want to be able to picture themselves in a home. A house with too many personal items or unique features will make it hard for a buyer to see themselves in the home. In order to cater to the variety of potential buyers, you should make your home as neutral as possible. This would include neutral furniture, paint, artwork, etc. You don't want to offend any prospective buyers.
More About: Home , Sellers

2008 Real Estate Outlook
2008-01-07 03:55:00
Another new year has come and we are all looking forward to what it may have in store for us. This is true if you believe in New Year's resolutions or not. This may be especially true for all of the potential homebuyers out there. As most waited out the market shifts of 2007, 2008 may be the most favorable time than ever to dive into the market. There are currently some really nice deals out there, which has been absent from the market for a long time. Current home sellers are a bit anxious and the usual slowdown in sales that the winter months bring will accentuate this fact. As always, no matter what the sale price may be, it is always best to negotiate within reason. This goes for owner-occupants as well as investors. You must also be looking to hold the property for at least the next 4 - 5 years. This is definitely not the time to consider rehab projects if you are an investor. Good, solid long-term rentals would be a better strategy. Normally, real estate cycles las...
More About: Estate , Real Estate , Outlook , Real

Simple Tips for Controlling Mortgage Cashflow
2007-11-20 01:57:00
Since we are in the middle of rising mortgage rates and potential foreclosures, I want to suggest a few ways for folks having cash problems to avoid potential disaster. The number one rule is not to close your eyes and ignore the problem that you are having. It is best to read the signs and address problems that you see coming down the road. The biggest mistake would be to allow yourself to make late mortgage payments. That will virtual eliminate about 90% of the solutions you would otherwise be eligible to receive. If you have an adjustable rate mortgage that you know will reset soon, pull out the paperwork and find out what new rate is due to adjust. Refinance ahead of time, because mortgage rates are pretty low right now. Also, if you have consumer debt (e.g. car loans, credit card balances, etc) that has a high interest rate (8% - 20%), you can consider paying off those loans with a cashout refinance. This only works if you have enough equity in your home. This strategy...
More About: Tips , Mortgage , Simple , Mort

Basics of a Reverse Mortgage
2007-11-20 01:53:00
Reverse mortgages are starting to grow in popularity. In general the borrower must be over 62 years of age. This type of mortgage allows the borrower to receive monthly cash payments by tapping into their home's equity every month. The mortgage interest that the borrower will usually pay is added to the balance of the reverse mortgage. So the debt against the property increases each month. Most reverse mortgage programs do not have income qualifications. A retiree with no income can qualify. The interest varies and can fall between 6 percent and 9 percent. The closing costs for a reverse mortgage are generally higher than with a regular mortgage refinance $15,00 - $20,000). The lender may also may keep the appreciation accrued in the home once the borrower passes, even if this appreciation is more than necessary to cover the remaining mortgage balance.In my opinion, reverse mortgages are only good for individuals that do not have an income. If a retiree has some sort of ...
More About: Mortgage , Basics , Reverse Mortgage

Buyer's leverage increases
2007-10-18 04:08:00
We have been in a buyer's market for more than a year now. Since the buyer's market began, buyers have gained leverage over sellers in negotiations. Over the past few months that leverage has grown even more substantial because sales have continued to decline while inventory has risen. The problem now is that as inventory rises, sellers have put a lot of "junk" houses on the market. These houses that are in poor shape are usually listed at or close to the price of homes that are updated. Many of these "junk" homes are unrenovated investor properties or foreclosures. Since most homebuyers look at the cheapest homes in a neighborhood first, they are forcing the owners of updated homes to list their properties at or close to the price of the homes in poor shape. This again plays to the advantage of buyers that are actively looking. In my opinion, this winter holiday season will be the most optimal time to buy this year. This should continue until about February of 2008. We ...
More About: Leverage

Sellers must disclose defects in "as-is" sale
2007-10-18 04:01:00
In this currrent market, there are a lot of properties listed as "as-is" sales. Many buyers are not clear on the meaning of "as-is" and what it may imply. Selling "as-is" does not protect a seller who lied about the condition of the property or who concealed huge faults that the buyer could not see. They must still disclose "known" defects in the property, they are just not obligated to make any repairs before the sale is finalized. When buyers take property in as-is condition, they acknowledge that they realize what repairs are needed and have offered below market pricing. But they have not agreed to accepting hidden defects in the condition of the property.
More About: Sale , Disclose , Sellers

Refi your Subprime ARM into an FHA Loan
2007-09-12 15:43:00
Last week, President Bush introduced a plan called the FHA Secure Initiative. This plan will enable homeowners to refinance various types of ARMs that have recently reset, and/or are delinquent into FHA loans. A Federal Housing Authority (FHA) mortgage is a government insured loan. Since it is backed by the government, the rates and terms are usually much more favorable than a regular conventional or subprime mortgage. These loan also have FIXED rate 30 year terms. This is important news for homeowners out there that have ARMs that are due to reset or are currently struggling to pay the higher interest rate on ARMs that have already reset.Here are the important points of the program:- The mortgage being refinanced must be a non-FHA ARM that has reset.- The mortgage payment history, during the 6 months PRIOR to the reset must show no late payments.- Late payments made after the loan has reset ARE acceptable.- In many cases homeowners may wrap late mortgage payments into the ne...
More About: Loan , Subprime

Where did all of the Mortgages Go?
2007-09-12 15:40:00
The subprime crisis has been all over the news for the past few months. Every week, it seems like a handful of former high-flying mortgage companies are either shutting down operations or laying off numerous employees. This has caused a ripple effect throughout the industry and it is now harder than ever to acquire a home mortgage. Many programs that once ruled during the real estate boom are now no longer available. Many lenders are also increasing minimum credit score requirements and getting rid of "state-income" and "no-doc" loans. Nowadays the majorities of buyers have to possess good credit, low debt to income ratios, a healthy down payment, verifiable income, and be looking to finance less than $417,000. There are still many good programs out there but you really need to search hard for them. The best advice for someone looking to refinance in the near future is to pay your mortgage on time. Late mortgage payments (within the last 12 months) in this market will almost g...
More About: Mortgages

Market Update
2007-07-17 05:13:00
It has been a couple of months since I have sent out a newsletter. I have been out of the country for a while and just returned last week. From what I see the housing market is still slow, which of course is beneficial to potential buyers. The National Association of Realtors has pushed back the potential for price recovery to the 2nd quarter of 2008. There is an wide selection of homes available on the market today. My website, www.housewealthy.com covers many techniques that buyers can use to negotiate the best price in this market. With historically low mortgage rates this summer and sustained job gains, it could be a good time for first-time buyers with long-term plans to test the housing waters. Is Your ARM hurting?More than two million subprime adjustable rate mortgages (ARMs) are about to reset at much higher rates in the next few months. Many buyers took out 2 and 3 year ARMs in 2004 and 2005 which offered low "teaser" rates. Once these mortgages reset, their paym...
More About: Market , Update

This Week's Carnival Of Real Estate Investing
2007-04-30 16:30:00
This is my first time hosting the Carnival of Real Estate Investing and I am pretty excited to be participating. I went to the Penn Relays in Philadelphia this weekend to watch some of the best Track and Field athletes compete in sprints, field events, and distance running. As I watched the events, I couldn't help but find a link between real estate investing and the races.I watched the sprints and noticed that the athletes trained to give a maximum effort for 10 - 45 seconds and then the event was over. This is similar to the real estate rehabber. They acquire a property, renovate it for 1 year or less and then try to sell for maximum profit.The field events showcased athletes that combined athletic ability with very specific technical skills. This is similar to the real estate investor that specializes in short sales or preforeclosures. They rely on learning specific techniques and approaches to create their success in real estate. The long distance runners train hard to i...
More About: Real Estate , Real Estate Investing

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