How to choose suitable home loans
By cpa | February 26, 2008
When we decision to sign a contract for the sale, we should start looking for mortgage companies to get loans in accordance with contracts on time transactions, the purchase of the entire housing process to be completed. In your application for housing loans, we must first understand the current market individual banks which products to choose from, according to their own situation to determine which loans, which are a lot of knowledge. Most choose 15, 30 fixed interest rate, or five or seven years of the 30 fixed loan amount. In fact there are dozens of projects for which loans are available, more importantly, the majority of people do not understand there are more and better and the majority of mainstream American society by the project. Below me to introduce them loans:
(A) fixed-rate loans
Fixed-rate loans are locked necessarily mean life remain unchanged, there are usually 10, 15, 30 years and 40 (less), 10 and 15 years APR 20 and 30 years APR basically the same, because they bond with the same period . If higher income and stability, orientation 15, or 30 years. 15 of the 30 low interest rates than 0.5% to 0.75%, but because the relationship between the short period, the monthly payment higher.
(B) Adjustable rate loans
Adjustable rate loans to 30 years for the loans, the interest rate fixed a certain period of time, and then adjust according to the prevailing market. Adjustable Rate often 3 / 1 ARM, 5 / 1 ARM, 7 / 1 ARM and 10 / 1 ARM, and so on, and five years respectively for three years ? ? fixed seven years and 10 years, and then adjusted once a year. The recent: 5 / 1 ARM Interest only is a very good project, it is 5 / 1 ARM, but the main interest can be paid monthly, pay more money can be automatically reduce the principal, and interest rates than the 5 / 1 ARM, lower is recommended. As in the United States for the frequent moving, a lot of people are willing to choose five or seven years ARM. Because the many state does not allow any prepay penalty, so the money could be paid loans.
(C) Special loan
Housing loan applications are usually ordinary type (Conventional), there are still some special loans, as the Chinese community rarely used, it refers only to this.
1 FHA loans: Federal Housing Agency-financed loans, targeted at the low-income families apply for the loan; the federal government provides subsidies, generally reflected in the interest rate, the preferential interest rate of 1%. The high average household income, and their loans will be limited, very few people able to meet this standard.
2 VA loans: Veteran Agency subsidized housing loans for veterans, some pine for the terms and conditions, but the interest rate is not much different. 3lot and construction loans: loans for the purchase of that land and build their own house. There are many requirements of such a loan, for instance, the first phase of the requirements of more than 30%, to 2 to 3 years in building houses, or houses to be completed in two years, the interest rate is usually higher than ordinary loans 0.75% ~ 1%, and commercial loans are basically the same.
4 The average interest rates on adjustable loans: MTA (Monthly Treasury Average), also known as Option ARM. MTA loans compared with a lot of other characteristics:
1, low initial interest rates, usually 1%
2, the monthly ? ? every three months or every six months adjusted annual rate
3, the interest rate from the previous 11, the average interest rate decision.
4, have the highest interest rate adjustment restrictions (? 9.95%);
5, per month in five different form of payment options:
a. pay a minimum amount; b. pay interest only; c. 5 / 1 ARM; d. 30 fixed ; 15 years fixed.
6, next year should not exceed the minimum amount of the previous year’s 7.5%
7, interest can be deferred for up to 12 months without penalty;
8, all interest can be tax-deductible;
9, as low interest rates and low monthly payments , the first phase, requires less the same circumstances can be more amount of the loan;
10, no credit demand, which poor people credit is particularly appropriate.
The aforementioned characteristics of a recent MTA is the most popular loan
product, which is why Americans more than 50% of the population use the loans
because of this. As far as the real estate broker, they are enthusiastic about MTA,
because they can sell even big house to buyer.
(D) housing loans star – MTA (Option ARM)
MTA is Monthly Treasury Average, also known as Option ARM, can be transferred, the
average rate loans. For the mainstream American society in housing loans, more than
60 percent of the population using MTA. Here to explain all this in detail.
(a) Basic terms
Deferred Interest: If you choose to meet the minimum monthly payments on the interest, the remaining interest will be added to the principal, this would lead to “Negative Amortization.”
Fully Indexed Rate: ARM loans with interest rates Margin Index are calculated.
Index: ARM is used to calculate the interest rate adjustment of the economic indicators, usually with the Federal Rate equal to or close.
Introductory Period: Option ARM and Home Equity loans, the lending bank to customer
concessionary period, during this period of time the interest rate will be very low (like when you apply for new credit card ).
Lifetime Interest Rate Cap: ARM loans in the entire course of the loan ceiling for the maximum, usually the existing interest rates +5%.
Margin: lending rate minus the margin Index (Spread), Margin of them is fixed, usually at 2.75 percent.
Negative Amortization: As Deferred Interest, the loan repayment period to table shows the principal will continue to grow.
Payment Change Cap: Monthly loans to the largest percentage of the annual, for example, in 2008 $ 1,000 / month, if the 7% Cap, 2008 should be ? (1000 × N $ 1070/ month).
Recast: Option ARM loans based on interest rates and the remaining unpaid principal amount of years to re-calculate the minimum monthly payments, generally every five years, or more than the initial loan principal amount of 125% (110% NY) will be recast.
Stact Rate: Introductory Period interest rates.
(b) the basic characteristics of MTA
Option ARM compared with other loans, there are many features:
1, the only super-low interest rates, usually 1% -1.75%;
2, every 12 months adjusted interest rates;
3, and its interest rates from the first 11 months of 20 points in 10 Margin to decide, is always lower than the Prime Rate;
4, the highest interest rate adjustment restrictions (? 9.95%);
5, a monthly five different payment methods available (see below);
6, next year’s minimum monthly payments should not exceed the previous year’s 7.5%;
7, deferred interest (Interest Deferred) can be up to 12 months without penalty;
8, check-free income, free check deposits as the interest rate of loan applications;
9, all the interest may be tax deductible;
10, no credit requirements;
11, and requires minimal down payment, monthly payments low, under the same conditions can be more amount of the loan.
(c) The MTA monthly payment option
MTA As mentioned above, there are many advantages, there are different monthlypayment methods to choose from:
1, the minimum amount of pay;
2, interest only;
3 by 5 / 1 ARM pay;
4, the interest rate on 30-year fixed pay;
5, by 15 to pay a fixed rate of interest.
(E) How to apply for refinance loans
When you do refinance, the existing loan is usually paid (Payoff) and the re-signing of a new loan, the new loan may or may not from original bank (Lender).
(a) The purpose of refinancing Refinance said there are three objectives:
1, lower loan rates and / or change the loan period (Rate / Term);
2, cash for its use (Cash Out);
3, removed Loan Insurance (Mortgage insurance).
(b) The timing of new loans
When the home loan interest rates for low-level, there will be the wave of refinancing, many people for the purpose of lowering interest rates to reduce the monthly payment, or to change from the 30 years of loans to 15 or 10 loans, or adjustable interest rates loans into fixed interest rate, or vice versa. If it is cash out for business investment, or for their children’s education or other paid high interest debt such as credit cards, and so on, select the time not so calmly.
To know that the interest rate of housing loans to the general difficult, but in order to know that short period of time (1-2 days) direction, it is necessary to analyze the market dynamics.
(c) To reconsider the choice of loans
When you re-apply for loans, we must first decide whether or not to pay Closing Cost, if you think that interest rates really low, and your will continue to live a fairly long period of time (3-4 years), then choose to pay the Cost cost-effective, because you will henceforth save the contrary, if you think that interest rates will decline, and also re-No Cost lending opportunities, or will be moving within three years, you will have to calculate how much use the money saved time you pay to offset the Cost. Calculation methods can refer to the table below.
Generally speaking, the Closing Cost broadly equivalent to 1% of the loan amount,large loans <1%, while loans for small> 1%. Of course, when re-choice No Cost loans, the interest rates it should pay Cost higher than 0.25%, equivalent to selling point (1% loan to buy a 0.25% interest rate).
(d) The application procedures for the refinance
Refinance loans VS the purchase of home loans much simpler, but also on loan applications is FullDoc, or NoDoc LowDoc.
1, 2-Pay Checks
2, 2-years W-2
3, 2-monthy Bank Statement
4, Deed (& HUD-1)
5, Drive License
If it is in the same bank (Lender) , for refinance there is no need to provide documents.
Topics: Qualifying | 4 Comments »
Gift Letter
By cpa | February 25, 2008
Gifts – with the proper documentation – can be from relatives, friends, an employer, church, municipality, or nonprofit organization. Lenders often have stricter restrictions on gifts from friends and relatives other than parents.
Having generous parents is nothing to hide. An estimated one-third of first-time buyers purchase their home with a loan or a money gift from their parents.
Lenders will ask for a gift letter stating that no repayment of the “gift” is expected. In addition to the letter, a lender can ask for two or three months’ worth of statements for the account where the down payment funds are located. If the money was recently placed into that account, the lender may ask where it came from and request verification of that source as well.
If someone is willing to make a gift of funds in order for you to purchase a home, lenders will ask for a gift letter stating that no repayment of the “gift” is expected. The amount of the gift and the date funds were transferred should be spelled out in the letter, along with the donor’s name, address, telephone number and relationship to the borrower.
Also, if you put less than 20 percent down, some lenders may require that a portion of the down payment be your own cash, not a gift. If you want to use a gift as part of your down payment, check with individual lenders to learn the restrictions of specific private or government-insured mortgage programs.
Topics: Qualifying | 2 Comments »
Lease Option
By cpa | February 22, 2008
When a renter signs a lease with an option to purchase a property for a specific price within a certain time frame, that is called a lease option. In most lease-option situations, a portion of the rent is applied to a future down payment.
Lease options are most popular among buyers who don’t have enough funds for a down payment and closing costs.
A lease option is an arrangement with you and a seller to exercise the option to buy a house after you have rented it for a specific period. A portion of your rent would applied toward the purchase if the option is exercised. This is referred to as rent credit, which most institutional lenders will accept as part of the down payment if rental payments exceed the market rent and if a valid lease-purchase agreement is in effect, a copy of which must be attached to the loan application.
If you are a seller, lease options can give you several advantages, especially in a slow market. These include a monthly rent higher than market rent, top-market value for the property and tax-free use of the option consideration until the option expires or is exercised. Also, the renter is more likely to treat the property like an owner, tax-free use of option consideration until the option expires or is exercised.
Read any lease-option arrangement carefully for details on transferring the option and other important concerns.
Topics: Buying Your Home | 2 Comments »
Annuity Trap
By cpa | February 20, 2008
The market has bought a pandemic annuity, mostly by insurance companies designed to sell a annuity contract. The contract is purchase from insurance companies and immediately understand the rights and responsibilities of Legal document. Before there was a decision, buyers should carefully examine the size of the contract terms. Best to find an experienced, reliable professionals coming together participating in detail. With the insurance industry can not single words, promotion of the language. Not a matter of chance.
Since the purchase annuity There are two Cat and the two periods. Two period is the contribution period (that is, payment terms) and the extraction period. Of course, the contribution period may be longer or shorter, more can be a one-off payment. Extraction period annuity set the date of the contract. Maturity can be purchased at the start drawing of the annuity provisions of the contract amount. Generally speaking, it can be extracted on time, can also be a one-off-all mentioned. Also choose from time specified number of years or the life of another. Most of the annuity contracts allow buyers due to extraction method for the decision. If the purchaser before the expiry of the cease contributions or asked for early withdrawal, it will lose some of entitlement. Losses may only be one or two percentage points, it may also be a number of 10 percentage points in terms of the contract shall prevail.
Traditional annuity
From the theory of the annuity can be divided into traditional and non-traditional two Cat. Since the purchase of the traditional annuity contract at least has the following characteristics.
1) deadline – if purchased in the period to stop contributions or early withdrawal will suffer. General deadline is 7 years to 10 years, but also the five-year. The number of losses, although identified above may only 1% or 2%, but the number may be 10 percentage points. Of course, the closer to deadline, the less the loss.
2) Cost – many project costs. Generally include promotions, investment, planning, financial management, management, maintaining and increasing the fee collection items, and so on.
3) return – usually earn more pay, less Shaozhuan back to the method of allocation annuity annual return. In some cases when the deduction understand cost, and return may be more federal savings bonds lower, and some annuity to provide a minimum return guarantee. But may have to pay more fees.
4) The funds – the traditional annuity Most of the funds should be guaranteed provisions. However costs may be increased.
5) Other – such as seriously ill, disability, or even death, and so when they occur, the traditional annuity there will be special provisions. Of course, costs will increase.
Non-traditional annuity
Whether traditional or non-traditional, annuity in the end it is still the annuity. Still is a priceless, no legal document. Non-traditional annuity is a person with insurance companies from the purchase of executed contracts, in accordance with a contract to Do to act. Still deadline requirements and limitations expired when withdrawals are fixed changes to the scope and methods. In this regard with the traditional annuity is not only too small Datong is abnormal. From another angle future, returns, costs, and the financial security elements, but with the traditional annuity is small with the large abnormalities.
According to the United States Securities and Exchange intermediary Association (NASD) statistics from the non-traditional annuity in the year 2003 is a year of the 7000 complaints. 2004, 2006 and 2005 have more than 10,000. According to the 2006 data are calculated, it is estimated that up to two million. Readers need to understand that the general should not be victims of 100% of complaints to the relevant authorities. If the complaint number of people to 10,000 to two million, the number of victims certainly high. This could see, non-traditional annuity is a category should be avoided as far as possible investments.
As this type annuity marketing practices that the majority of the high-pressure case, order a non-retail investors to buy may not be feeling. In view of this, provide the following five key reference for readers:
1. Salesmen often put forward the annuity tax benefits. This is a one-sided of the story. Because annuity of the cash investment is not tax deductible, the only return on investment can be tax-deferred. To tax-deferred benefits, the purchaser to pay a tax on the price. The price is the annuity accumulated by the return of all future must be ordinary income (Ordinary Income) pay taxes. Understand sacrifice dividend (Dividend) and the long-term value-added (Long Term Capital Gain) should be the maximum tax rate of 15% concession.
2. Salesmen often proposed to have purchased the old annuity contract for the new annuity contract. Coming from the general angle to see if the new annuity adverse good design is the case, this proposal might not be. It must be noted that when you purchased replacement at the equivalent of a new annuity. Further period of the new, virtually shackles year extension period.
3. Interest to purchase the psychological fear of a future marketing lifelong protection (Life Time Payment) annuity. If the annuity contracts with guaranteed lifetime benefits, the cost would certainly increase. Generally increase each year by 0.5 to 2 percent, and so does not.
4. When you retire to consider buying annuity may have been too late. Illustration of this type is wrong. The best investment annuity is the time in the pre-retirement moment. Reason is the purchase of a retirement that is, buy that from the annuity is that the annuity best way for restraint.
5. Annuity It should be a part of estate planning. This is not responsible for the promotion misleading. Of course, in the purchase of the remaining people were killed when the annuity value can be selected from future generations to inherit. But the annuity plot accumulated returns, inheritance need to ordinary income (Ordinary Income) pay taxes. In the heritage tax, but not a fixed and Life (Permanent Term Life) in the future of the operator. Besides, if people choose to buy life extraction method, the death of the annuity value vanished.
Finally, since the purchase annuity is not whether traditional or non-traditional, both is a contract should be avoided. If they truly need to buy a annuity, it should beware of the annuity means personnel promotions, so as not to fall into the trap and not feel.
Topics: STOCK | 1 Comment »
Are foreclosures an option?
By cpa | February 13, 2008
In most states, a foreclosure notice must be published in the legal notices section of a local newspaper where the property is located or in the nearest city. Also, foreclosure notices are usually posted on the property itself and somewhere in the city where the sale is to take place.
When a homeowner is late on three payments, the bank will record a notice of default against the property. When the owner fails to pay up, a trustee sale is held, and the property is sold to the highest bidder. The financial institution that has initiated foreclosure proceedings usually will set the bid price at the loan amount.
Despite these seemingly straightforward rules, buying foreclosures is not easy as it may sound. Sophisticated investors use the technique so novices may find themselves among stiff competition
A foreclosure property is a home that has been repossessed by the lender because the owners failed to pay the mortgage. Economic conditions affect the number of foreclosures. Many people lose their homes due to job loss, credit problems or unexpected expenses.
It is wise to be cautious when considering a foreclosure. Many experts, in fact, advise inexperienced buyers to hire an expert to take them through the process. It is important to have the house thoroughly inspected and to be sure that any liens, undisclosed mortgages or court judgements are cleared or at least disclosed.
Buying a foreclosure property can be risky, especially for the novice. The process has many disadvantages. There is no financing; you need cash and lots of it. The title needs to be checked before the purchase or the buyer could buy a seriously deficient title. The property’s condition is not well known and an interior inspection of the property may not be possible before the sale. Usually, you buy a foreclosure property as is, which means there is no warranty implied for the condition of the property (in other words, you can’t go back to the seller for repairs). The condition of foreclosure properties is usually not known because an inspection of the interior of the house is not possible before the sale.
In addition, there may be problems with the title, though that is something you can check out before the purchase.
Buying directly at a legal foreclosure sale is risky and dangerous. It is strictly caveat emptor .
Topics: Investing in Real Estate | 4 Comments »
The benefits of seller financing
By cpa | February 8, 2008
Seller financing is when a seller helps to finance a real estate transaction by taking back a second note or even financing the entire purchase if the seller owns the home free and clear. Usually sellers do this when a buyer has difficulty qualifying for a conventional loan or meeting the purchase price.Seller financing differs from a traditional loan because the seller does not give the buyer cash to complete the purchase, as does a lender. Instead, it involves extending a credit against the purchase price of the home while the buyer executes a promissory note and trust deed in the seller’s favor. These special circumstances must be acceptable to the lender who makes the first mortgage on the property.
The necessary paperwork is prepared by the title or escrow company after the terms are worked out between the buyer and seller.
If you are a seller considering such an arrangement, it is critical to thoroughly evaluate the creditworthiness of the buyer first. Fear of default makes many sellers reluctant to take back a second. But seller financing can bring a higher price plus complete the sale sooner in some situations.
Seller financing offers tax breaks for sellers and alternative financing for buyers who can’t qualify for conventional loans.
If you are a seller, the risks you face are the same as those facing any lender: Is the borrower a good credit risk? Will the property hold enough value over time to allow for the repayment of all loans made against it?
You should run a full credit check on the borrower, require hazard insurance on the property and include a due-on-sale clause. There also are financing, disclosure and repayment-term requirements that need to be met. It is wise to consult a lawyer when putting together this kind of transaction.
Topics: Selling Your Home | 5 Comments »
Can you buy homes below market?
By cpa | February 5, 2008
While a typical buyer may look at five to 10 homes before making an offer, an investor who makes bargain buys usually goes through many more. Most experts agree it takes a lot of determination to find a real “bargain.” There are a number of ways to buy a bargain property:*Buy a fixer-upper in a transitional neighborhood, improve it and keep it or resell at a higher price.
* Buy a foreclosure property (after doing your research carefully).
* Buy a house due to be torn down and move it to a new lot.
* Buy a partial interest in a piece of real estate, such as part of a tenants-in-common partnership.
* Buy a leftover house in a new-home development.
Topics: Investing in Real Estate | 1 Comment »
How can I improve the value of my property?
By cpa | February 5, 2008
The biggest factor outside of a homeowner’s control is market conditions. But other issues — including the condition of the property, specific home improvements and neighborhood stability and safety — can influence property values.The greatest rise in home prices occurs when the economy is strong and the number of home sales is increasing. Though markets vary, that has occurred several times in recent history — including the early 1980s, late 1990s and late 2000s.
Specific home improvements can increase the value above the cost of the improvements. According to Remodeling magazine, which publishes an annual “Cost vs. Value” remodeling report, a remodeled bathroom returns 81 percent to the owner, a bathroom addition, 89 percent and a master bedroom suite, 82 percent. Remember, quality pays. Well-planned and well-executed remodeling jobs are a good investment while bad work seldom enhances value or livability.
The safety and security of a neighborhood can affect property values, too. If you live in a high-crime area, an organized community watch program not only will lower the crime rate but give home values a boost, too.
Topics: Investing in Real Estate | 3 Comments »
Vote for Hillary February 5th
By cpa | February 2, 2008
We see what seven years of a George Bush economy has done to working families in New York: rising health care costs, home foreclosures, jobs sent overseas and our pensions in jeopardy.
THE PROBLEMS WE FACE…
Nearly 47 million Americans without health insurance
Foreckosures and plummeting home sales
Oil prices at record highs
More than 3 million jobs lost since 2001
Underfunded pension plans
America is facing a recession at home and a never ending war overseas. We need experienced leadership in these serious times.It will take more than words to fix the America economy. now is the time for real change and real leadership.
Our Senator Hillary Clinton has the experience to fix our economy and she’ll be ready to lead from day one.
Hillary ‘s plan to repair our economy:
*90-gay moratorium on housing foreclosures
*$40 billion in tax rebates for working and middle class families
*$25 billion in energy assistance for millions of American families
……THE CHANGE WE NEED
We need a President with the strength and experience to get our country back on track . As our Senator,Hillary Clinton has fought for real change and shown real leadership,again and again, on issues that New Yorkers care about. We need Hillary Clinton in the White House.
How you vote is a personal decision. But , together, we can change our country!
Real change starts with voting on FEBRUARY 5TH!
Topics: READY FOR CHANGE AMERICA | 2 Comments »
Hillary on the issues
By cpa | January 30, 2008
Life
Whether it is protecting our pensions, fighting for quality health care or taking a stance against privatization, Hillary has show her commitment to working families.Here ‘s where she stands on key issues that affect the lives of the men and women who provide the vital services that make America happen.
FIXING HEALTH CARE
“I believe everyone,every man, woman and child should have quality,affordable health care in America.”
Hillary Clinton
STRENGTHENING THE MIDDLE CLASS
“Social security has been our nation’s most successful domestic program,protecting millons of Americans from poverty due to old age,death and disability.”
Hillary Clinton
PROMOTING PUBLIC SERVICES
“Any effort to contract out government jobs without regard to the efficiency or effectiveness of the private firms that would be hired is irresponsible and a bad use of taxpayer dollars.”
Hillary Clinton
PROTECTING AMERICAN WORKERS
“EFCA would create a fair and level playing field between workers and employers,and promote the economic growth of the American Middle Class.”
Hillary Clinton
How you vote is a personal decision, but electing Hillary Clinton for President is right for America.
Topics: READY FOR CHANGE AMERICA | No Comments »
« Previous Entries Next Entries »