| Distance to Water: | Waln | Paved Street?: | Y |
Make sure that you save enough to justify the process of refinancing. It is best to decrease your interest rate by at least .75% to 1%. For example, this will save you about $100.00 a month on a $150,000.00 mortgage.
By law, closing costs must be disclosed within 3 days of the loan application, however, there are different approaches to calculating them. Closing costs are initially estimated until the details of your specific loan are clear. It is wise to use a worst case scenario and be pleasantly surprised.
Some refinance simply to reduce their interest rate. You should be aware that simply reducing your interest rate is not always to your advantage, so make sure that the gains from your rate reduction more than cover the related fees. There are, however, other legitimate reasons to refinance that may not be related to interest rates. Some are debt consolidation, home improvements, or a major purchase. Some of these choices may offer other financial or personal advantages, such as taking cash out to buy a car. In this example, you may be able to deduct your interest payments on your tax return. Always consult an accountant or tax attorney before making these types of decisions.
| Description: | Upper Unit With Laundry Hookup, One Detached Garage, Carpet Floor, Close To Freeway/Market/School(Elemental/Middle),Well Maintained Condo, Good Condistion To Move-In. Associated Pool, Small Park With Playground |
Put the sellers equity "off to the sidelines"
Often to make a deal work, a property seller must place part of their equity off to the side or suspend it for a period of time where it will require no interest payments or perhaps no payments at all.
For example, you acquire a nice rental home worth around $200,000 for 10% under its value or a sales price of $180,000. The home will lease and stay leased for about $1,400 per month. You obtain a new institutional first lien mortgage for $160,000 from a mortgage lender that is amortized over 360 months at 6.5% and payable $1,011.31 per month in principal and interest payments.
The sellers are willing to finance $20,000 by agreeing to carry a second lien mortgage & note. After adding in the cost of hazard insurance, property taxes, and management, the home just slightly produces some modest cash flow each month from the rent coming in versus what must be paid solely on the $160,000 first lien mortgage note.
Thus, no payments can be made to for a period of time on the sellers $20,000 second lien mortgage note until rents support the additional debt service. This is a form of putting the sellers $20,000 of equity still due them off to the side until a future point in time.
Please stay tuned for more details.
An appraiser will tell you that the principle of progression states that property of lesser value is enhanced by proximity to better properties. English translation, please? Buy one of the cheaper homes on the block because the more expensive houses all around yours pull up the value of your home.
For example, suppose that your agent shows you a house that just came on the market in a neighborhood you like. At $175,000, it's one of the least expensive homes you've seen in the area. The agent says that the other homes around it would sell for anywhere from $225,000 to $275,000. You start to salivate.
Which type of mortgage is right for you? Basically, it comes down to two factors:
1. How comfortable you are with risk
2. How long you plan to live in the house
Clearly ARMs are riskier than FRMs. But taking on more risk may result in a lower rate -- at least temporarily. But if you plan on staying in the house for a long time, an ARM can be particularly risky -- and potentially confusing -- since rates will fluctuate many times over and there will be more adjustments. Conversely, if you plan to move after five or six years, you could take a 5/1 ARM, meaning the first five years are locked in (at a low rate) and it converts to an adjustable rate after that -- right about the time you plan to sell.
Along with other decisions you will find yourself making while shopping for a mortgage, you will be deciding whether to take a fixed-rate mortgage (FRM) or an adjustable rate mortgage (ARM).
As the name implies, the interest-rate of an FRM will remain the same throughout the life of the loan. If interest rates are low when you are buying or refinancing a home, an FRM is a good choice, because you can lock in that low interest rate. ARMs, however, will fluctuate as interest rates rise and fall. Your 6 percent rate today could drop to 5 percent next year or end up at 8 percent if the market rate goes up.Exactly when the rate of your ARM loan will change depends upon the terms of your loan agreement, which could see rates change every three months, once a year, every three years, or not until five years. It?s not uncommon to find ARMs that start at a fixed rate and convert to an adjustable rate after several years.
ARMs also generally come with a "cap," which limits the amount a lender can raise its rate. The cap for most ARMs is 2 percent, meaning a lender can only increase its rate 2 percent within a single adjustment period. But several adjustments can turn a 4 percent interest rate at the beginning of the loan into a 10 percent interest rate later on.
As you might imagine, FRMs are more popular. Most home buyers want the security of knowing how much their mortgage paying will be each month. An FRM will allow you to more easily manage your monthly and yearly budget. If you have an FRM and rates do drop precipitously, you can always refinance.
Buyers benefit most when staying in home long term
Given the recent negative press about the state of the residential real estate market, it's understandable that buyers would be reluctant to offer more than the asking price. Yet, some buyers are finding that a list-price offer is not enough. Multiple offers are making a comeback in some markets.
A couple from San Francisco, who had resolved to pay no more than the list price, is now resigned to do so for the right property. They were surprised to find that there were multiple buyers seriously interested in each of the first three listings they considered buying. The one they chose to offer on received three offers. The winning bid was for $10,000 more than they offered.
Exhausted and disappointed from the experience, the San Francisco couple realized that if they wanted to buy a good house in their first-choice neighborhood, they would have to be prepared to compete.
Some buyers in this situation would decide to wait to buy until there are more listings and fewer buyers. A downside of this approach is that waiting in a market that's short on inventory could mean paying a higher price later.
Although appreciation has been flat to negative in many areas of the country, there are pockets of the market -- like the starter-home markets in Oakland and Berkeley, Calif., and Brooklyn, N.Y. -- where there aren't enough homes for sale to satisfy the demand. This tends to put an upward pressure on prices.
HOUSE HUNTING TIP: Does it make sense to pay over the asking price in a market that could soften further? The answer depends on how much over asking you have to pay and how long you plan to own the property.
Some sellers are still pricing their homes low to stimulate buyer interest. In this case, paying over the asking price may not mean paying over market value. Check the sale price of the most recent comparable sales in the area to determine if paying over asking is too much. Your real estate agent can help you with this.
Even if a listing is fairly priced, paying more might make sense depending on your circumstances. If the house will serve your long-term needs and you're confident that you won't be moving for five or 10 years, paying an extra $10,000 is probably worth it. However, if your future is uncertain, it could be risky to pay more than the asking price.
A job transfer that forces you to sell in a soft market soon after buying, could leave you in a precarious position -- particularly if you financed the purchase with a mortgage for 100 percent of the price. Unless you have financial assistance from your employer, you might have to pull money out of savings to cover your selling costs. If the value of your home has declined you might not be able to sell for enough to pay back the mortgage.
Another factor to consider before offering more than the list price is whether the house will appraise for your offer price. Typically, a lender's mortgage commitment is conditioned on an appraisal of the property that substantiates that the buyer is not overpaying. Most lenders require that the appraisal report include three comparable listings from the neighborhood that sold within the past six months.
Due to the general slowdown in the housing market, some lenders are tightening up on their appraisal requirements. Recently, an appraiser who was appraising a property in Oakland's Upper Rockridge neighborhood was instructed by the lender to use comparable sales from the last three, not the last six, months.
THE CLOSING: To protect yourself, include an appraisal contingency in your purchase offer so that you won't risk losing your deposit should you back out of the contract because the property doesn't appraise for the purchase price.
Understand first of all that there IS a difference between price and value. Price is the amount you are asking for the property. Value is buyer perceived, and this perception of value is influenced by many factors such as location, features, condition, comparison to other purchase option, etc. By attending to details that can have a positive impact on the value, sellers can significantly increase their chance of attracting qualified buyers willing to pay the asking price.
HOW "AS IS" HOME BUYERS CAN PROTECT THEMSELVES.
Knowing the key reasons many home sellers elect to sell "as is," home buyers can benefit from such sales if they know how to protect themselves.
The best way for a buyer to protect against an unscrupulous seller who "forgot" to disclose a serious but known home defect is for the buyer to include a professional inspection contingency clause in the purchase offer.
Buyers of every house and condominium should include such an inspection clause making the purchase offer contingent on the buyer's approval of their professional home inspector's report. That means, after the home seller accepts the buyer's purchase offer, the buyer hires a professional inspector and then approves or disapproves their written report.
Home buyers should be wary of inspectors recommended by the real estate agent. Such an inspector might be known as "easy" and not a "deal killer." Ask such inspectors recommended by a realty agent about their experience, background and professional memberships.
An excellent credential is an experienced independent inspector who belongs to one of the professional home inspections organizations.
| Status: | Active |
| Bedrooms: | 4 |
| Total Baths: | 2 |
| Full Baths: | 2 |
| Built: | 1977 |
A seller's biggest advantage is time, because the more time you have, the more you can prepare and do your homework. However, if you're in a rush to sell, you're at the mercy of the buyer; you won't have the luxury of preparing or waiting for an ideal one.
Do not disclose your timetable to anyone, except your agent. If you can't trust your agent don't do business with them. Your agent has a duty of confidentiality to you per your written contract and will only disclose information you as the seller give permission to disclose. A rushed seller means a bargain for the buyer and savvy buyers can smell panic a mile away. If you're planning on selling in the next 6 to 12 months, you have lots of time to prepare.
As odd as it sounds, sometimes people sabotage their own intentions by being too greedy. Don't do it! As you really start looking at homes on the market, you will develop a sense about what is priced low, high, or just right. Doing your homework here will help you truly understand home values and you will be able to set a reasonable price -- a price that buyers know is just right.
Tracking neighborhood values - You need to become somewhat of a snoop because you need to learn more about your neighborhood than you ever thought possible.
