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Buying a home is not easy. Although costs are falling dramatically with the collapse of the prices of many homes in the United States, a survey by the National Association of Realtors reported several obstacles to achieve the dream of home ownership, according to the survey, 82 percent of Americans believe it is a good investment, especially with the low prices.
The entry fee or “hook” is an obstacle to home ownership
According to the survey, down payment or “hook” of a home is one of the biggest obstacles perceived by the public. The cost varies from 5 to 20 percent of the house, and many buyers can not get much money at one time. However, those buying their first home and have an annual salary of less than $ 75,000 can get a tax credit of $ 8.000 through Credit for First Time Buyers .
Obtaining credit is an obstacle
Once you pay the entrance fee, you pay the rest through a mortgage. According to the survey, another perceived obstacle is obtaining credit to pay the cost of a home, a sentiment shared by about 70 percent of respondents.
After the collapse of many mortgages in recent months, obtaining credit has become more expensive, according to MSN Money. Lenders have become much more careful in lending money, and a bad credit can cost you thousands of dollars. One way to avoid you high interest rates may be waiting a couple of years to buy a house, and use that time to create a good credit history, paying all your bills on time and challenge unfair charges.
Extra costs and unemployment
Another obstacle is the payment of extra costs, payments for real estate agents and government payments, according to the survey. Unemployment is another concern of the respondents, because without money can not buy a house. The unemployment rate reached 9.7 percent, according to online statistics.
Not only buy but keep a home
Not only buying a home is a problem, but also maintaining a home.
Half of the respondents (51 percent) believe the eviction from their homes a problem. Although 92 percent of respondents have not experienced a dispossession of their homes, nearly one third (32 percent) of respondents are concerned that he or any family member can not pay the mortgage costs have been rising.
The process of getting financing for a home can take several months. To date a loan approval is not certain that will actually receive funding. But once you approve the loan, you could rest assured. But now this is changing. If your record has changed then the bank can reverse the decision to approve you and deny you the mortgage.
What kind of change can hurt you?
Many changes. For example:
* Applying for new credit (credit cards)
* Closing accounts or credit lines
* Changing work paid a fixed salary only pays commissions
The most common financial mistake people make is to apply for new credit. To many, nor are they cross your mind that applying for a credit card (or several) can impact the mortgage application. They believe this because they say that “since the application was approved.”
What should you do?
It is best to wait until after closing to make decisions that impact your credit. If your closing date is delayed a few months you must take this into account before applying.
Please ensure you have enough money saved to meet living expenses or moving expenses without having to get more credit.
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The ads are seen and heard almost incessantly in Hispanic media: Do not lose your home! Stop paying your mortgage without have to move! Avoid Foreclosure! Declare bankruptcy to discharge his debts! These radio and television ads can convince almost anyone that there are magic solutions to financial problems. But the reality is that many are nothing but fraud, scams and swindles.
Types of fraud related to mortgage modification
The Royal Spanish Academy offers three definitions of a fraud:
1. Action contrary to truth and righteousness, which is detrimental to the person against whom it is committed.
2. Act aimed at circumventing a law against the State or third parties.
3. Offense if the person in charge of monitoring the execution of public contracts, or some private league with the representation of conflicting interests.
These definitions capture well the behavior of people who prey on the desperation of Hispanics with respect to their mortgage. But there is also a fourth category that would add to the definition of fraud in this context: The lack of knowledge. Many people have entered the “business” of the changes they see an opportunity to make money. They have no intent to commit a crime. I really want to ride a legitimate business. But I just do not have the experience or expertise to do a good job.
I consider this a scam too because even though the intention is good, do not have the resources to fulfill their promise.
Signs and clues that modification service is not legitimate
To avoid being a victim, you should be aware of the following signs that the person you wish to advise you may be a scam artist:
Collection of fees in advance
It is never a good idea to pay in advance. In many states like California, it is illegal to charge for services in advance of change. Some promise to refund 100% of what you pay if the end does not receive the change. Others do not charge you for making the change, but they charge you for other “services.” They are tricks. Only pay after you receive the final result of the modification, which can take months.
Promises that can stop foreclosure
This is not possible. If you’re in foreclosure, the process does not stop just because you request a modification. Only the bank can for the process if they want. There are no tricks to cancel a foreclosure.
Do not offer a written agreement
Very bad sign. Always have a written agreement. Read it before signing. If you put pressure to sign it immediately, do not do and look for another consultant. You should get an independent translator to ask you a Spanish translation if you can not read English. If the contract you sign is in English not trust the Spanish translation that gives the advisor. You may be false.
Denying access to information on successful cases
You have the right to call evidence about other people who helped counsel and achieving results. Confidentiality can not give you the name, but they must have information on successful cases. If you do not want to show anything, then think again.
Read the rest of this entry »
Be approved for a mortgage is still something very difficult. Banks have gone from one extreme (lending money to anyone) to another (not wanting to lend money to almost anyone.) But people with good credit, stable jobs, high income, savings to put a down payment and bank which participates in the programs of Fannie Mae, Freddie Mac or FHA have a good chance of being approved. But what if you are an independent contractor? Or if you own a small business? Is it possible to be approved for a mortgage at this point?
Why banks do not want to approve independent contractors and owners of SMEs
If the bank lends you money to buy a house they want you to pay your dues on time. Point. They do not want anything else! To pay on time month after month for 15 or 30 years requires a steady income. The banks believe that a salary generated by working with a company is more stable and secure income that comes from being an independent contractor.
Like most ventures fail, they take the position that there is a high possibility that the self-employed person fails to your business. If that happens, you can not pay the fee. To some extent they’re right. But the reality is that economic trends show that there is not very stable when you can stay employed because of earnings at any time.
Do you want the bank will approve your mortgage?
If you want to buy a house and you are independent contractor or owner of an SME, you have to accept the reality that will be harder for you to be approved for a mortgage. But if there are things you can do to maximize the chances of being approved.
Wait for your business is two years old
If your business does not have a minimum of two years in operation, leaving you better wait because almost no bank is going to seriously consider. The banks require a minimum operating history of 24 months.
Have all your documents organized and existing
Although this sounds obvious, most entrepreneurs fail to this point. If your business is a corporation, do you have the statute? Do you have the certificate of incorporation? Do you have the latest tax returns? Do you have your financial statements for the past two years? Do you have your account statements for all accounts of the business?
In addition, you must have all personal documents that are required for any mortgage.
Avoid online mortgages
One gets online mortgage or by phone may be good but for people who have a standard profile. The self-employed person does not have a standard profile. You do best to go in person to local banks. Even better would be to apply for a mortgage from a local bank already knows you because you have worked with them for many years for personal reasons or business. Some local banks have an expert specialist in mortgages for self employed people.
How it works?
According to their individual needs and budget, the homeowners insurance can be purchased in a selection of packages. The coverage can insure against losses due to:
* Injuries that occur on your property.
* Fire and lightning.
* Damage caused by smoke.
* Wind and hail storms.
* Vandalism.
* Theft.
* Explosions.
* Riots and civil commotion.
* Damage caused by vehicles and aircraft.
* Broken glass.
Premiums are based on the level of coverage, rates for individual companies (which may vary considerably), the value of your home and its contents, its location and the amount of your deductible.
Why should inform me better?
Ask yourself:
* If my house burned to the ground, how could I find the financial resources to rebuild?
* If thieves entered my house and my possessions stolen or destroyed, how quickly replace them without sacrifices?
* If a neighbor slipped and injured on my property, would I be willing to risk paying a trial?
* If a tree fell on my roof, how would pay for the repairs?
What is Homeowners Insurance?
This coverage helps to limit their financial losses in case of damage, destroy or steal your property or contents. For an annual premium budget, if you are properly insured, insurance for homeowners derives the bulk of the risk to the insurance company.
Then, depending on your policy, if your possessions are lost or damaged due to fire, theft, vandalism, storm or other disaster covered by the policy, your homeowners insurance can help rebuild, repair or replace goods . You can also pay for damages if someone is injured on your property. (Note that insurance policies for homeowners do not cover flood damage and they require a separate policy).
Who Needs the Homeowners Insurance?
You may need it if you own a home, whether a single house, duplex, condominium or mobile home. When applying for a mortgage, the lender will request proof of homeowner’s insurance to protect both your investment as your own. Although not required, however, homeowners insurance is the best way to protect against unforeseen accidents.
The signs ‘for sale’ begin to form part of the landscape. There is a growing and longer. And is that selling a home is no longer a simple task. Fear of buyers to the scams and the credit crunch has significantly reduced demand and therefore sales. This situation forces the sellers to be more dedicated to it when preparing a home to remove the market if they want to succeed.
According to experts, some details to consider before getting a visit from some customers are:
- Factor Price: in crisis, “the owner has to ascertain the true value of the floor, its real price and not be guided by the price that others make,” said Ruben Cózar, director of residential Consultants Forum. “Maybe the neighbor across the street ask for a certain amount and sell the other end. That’s why everyone should be clear about the real value of their home, “he explains.
From there, you must define a strategy: “if you want to sell quickly, from a price below the actual value if there is no hurry, try to keep it” suggests Cózar.
- To highlight and enhance the main advantages and qualities of the floor to differentiate themselves from competition.
- Advertise the sale in various ways: “we have to rely on real estate portals such as weapons and not give just a simple banner,” advises Cózar. Internet can provide much more information through pictures, videos, maps, etc..
- If the building is quite old, it is worth making a small investment to carry out reforms and fix flaws that can give a bad image and reverse the prospective buyer. In this sense, it is advisable to paint and look for cracks or leaks.
The documentation that would exist for the negotiation of a mortgage loan consists of a prospectus, the binding offer and the loan agreement itself.
The booklet is a document that financial institutions are required to make available to stakeholders, which should be informed of data related to the loan and preparatory costs of the operation. You should also inquire about the following issues:
* Maximum Loan Amount.
Term of the loan.
* Frequency of payments (monthly, quarterly, etc ….)
* Interest rate. (Fixed or variable).
* Annual nominal interest rate, if the interest is fixed or the margin over the benchmark, if variable.
* Deadline for revision of interest rate.
* Arrangement fee.
* Prepayment Commission (partial and total).
* Taxes and fees (indication of the concepts.)
* Table of installments.
* Rates and fees of professionals involved in the operation
* Other expenses.
It is advisable to gather information from various banks, so to choose that loan that is most advantageous and best fits their economic conditions for it are concepts that should be taken into account, and must be clear:
1. The interest rate may be fixed or variable:
If you choose the fixed rate, it remains unchanged over the life of the loan, so if the evolution of the market tends to rise, the consumer is protected from this increase, but if you tend to fall, may not benefit thereof. These rates, banks usually do not hire them, because the average life of a loan is to vary between fifteen to thirty years, according to economic capacity of the debtor, so that signal a fixed rate involves taking a significant risk to both the entity and the consumer. To agree a fixed rate entities require the repayment of capital are not excessively long, with a trend to ten years.
If you choose a variable rate, the total amount that will have to repay the bank will vary depending on how you do the benchmark, used to determine the interest rate.
Noted that the usual practice, combining fixed and variable during the first year the rate is fixed and the rest of the life of the loan is variable.
2. There are reference rates more or less objective, the most common applied in a loan are the Mibor, which is an interest rate set by the Bank of Spain and the Euribor that establishes the European Banking Federation, which will gradually replace MIBOR.
3. The differential is an added benefit enjoyed by the bank on the reference interest rate (MIBOR, Euribor …), the application of the percentage differential is determined by the price of the bank loan that gives the best price for a loan spread is established by applying the entity. As for the review, it is normal to take values from year to year so that if the first value of the reference rate is dated April 1, the next review it will be with the type value reference on April 1 next year, many institutions apply the review every six months. It has allocated between 0.5% and 2% above the benchmark.
The term commercial real estate is used to describe a property of more than 5 units. Commercial Real Estate are widely used by employers who want to make an expansion of its business. Real estate is in charge of looking for a place for your new project.
The terms of leases are many, for example sets the rent that the landlord must pay, establishing the use to which it must give to the facilities, space to be leased, the duration of the contract, the use of and local changes that you can do inside, the place you rent, the costs that the owner should cover either the sewer, water or light, the renewal of the terms, insurance requirements and other terms more.
There are five types of leases for the election of the person. Each type to use depends on the business structure that you want to do, you have the budget to finance the leasing of space that you need. These leases are:
* Gross Lease: This is the most used. Here the tenant pays a monthly fee the owner paid for this insurance, taxes, maintenance costs and other expenses that may result in the property. Regularly this lease is known as a fixed contract.
* Net Lease: This is a network of rent the tenant must give the owner a monthly fee and a share of the costs that have to do with the ownership of real estate. The monthly payment includes the cost of maintenance, repairs, taxes, insurance, etc. This lease gives the tenant the opportunity to modify the commercial real estate leasing.
* Triple Net Lease: This is very similar to the previously mentioned net lease. In this the tenant pays a monthly fee for the operating costs of commercial real estate.