Category: real estate and mortgages

Life changes don’t come much bigger than moving to another country and as such the decision to move overseas is not one made lightly. If you are considering moving over the pond to the UK, whether because of marriage, divorce or because of business, it pays to be aware of the property market over there.  If you are buying in England and Wales, in particular you’ll need to be aware of the buying process so you can avoid the nasty practice of gazumping. Here’s a quick breakdown of how property purchase works in England and Wales:

1)      If your own home is sold in the US you can get the process moving fairly quickly. In the UK it can be hard to secure a property if you don’t have a buyer for your own because the process can become so drawn out. For this reason some people use the services of property buyers to speed it up.

2)      Most UK homeowners fund house purchase through mortgages – these are usually approved in kind before offers are made, so that individuals know how much they are able to bid on a home. If you’ve sold a property in the US or have other savings than you’ll be able to skip this step and move on to the interesting bit!

3)      Choosing your new home and area is always the most exciting part of the buying process  – perhaps even more so in a new country. Seek the help of local experts to help guide you – family and friends and even forums. Also try looking at sites to help you find local agents and give you some guidance on prices you can expect to pay. They produce a monthly house price index that will give you an idea of the going rate across the nation.

4)      To secure the home of your dreams you’ll need to make sure you’ve got a good team in place – namely a solicitor and surveyor. Once you’ve had an offer accepted on a property you’ll need to move fast, because someone can still come in and make a higher offer right up until the day of completion.

5)      Once you’ve had a survey completed to make sure your property is structurally sound you should finalise a mortgage if you need one, if not move swiftly on!

6)      After contract exchange day it’s time to get everything rolling – that means having your goods shipped over from the States and/or shopping to fill your new home.

7)      Once the title deed is transferred into your possession on completion day and you’ve paid stamp duty and land registry fees paid, all you’ll need to do is move into your new home and pay any remaining legal fees.

Take your time to plan things out if you move to England or another country. Settling into a new area can be tricky and is even more difficult when you are in an entirely new country, so don’t put too much pressure on yourself to settle in straight away. Pursue your hobbies and interests through local groups and chat to colleagues and neighbors and hopefully you’ll feel at home in no time.

Real estate prices are hovering at levels we haven’t seen since around 2006, or right before the real estate bubble. Many people are saying now may be a good time to buy a house, and for may people it is – provided they are prepared for it. The Wall Street Journal has a great resource for people who think they may be ready to move out on their own. Some of the tips include having a steady income, a down payment, and the security of knowing you will be living in the area for the next few years.

Many people are finding that banks aren’t offering as many loans as they were just a few years ago, and while that is true to a certain degree, most of the loans they are declining are the type they never should have offered a few years ago – including the so-called liars loans, sub-prime mortgages, and those that stretch borrower’s limits financially. If you have a good credit score, a low debt to income ratio, and are buying a home you can afford, you should be able to get a mortgage fairly easily.

Once you find a house you want to purchase, you will need to consider a few other factors, including how much of a down payment you can afford, the interest rate, and whether or not you want to get a 15 or 30 year mortgage. The down payment is an important factor because most lenders want you to have at least a 20% down payment, otherwise they may require you to purchase Private Mortgage Insurance (PMI) which insures them against buyers defaulting on the payments.

Should you buy Private Mortgage Insurance?

There are several important things to know about PMI:

It doesn’t protect you – it protects the lender. Lenders may try to sugar coat it, but PMI only exists for their benefit, not yours. If you default on your loan,

Private Mortgage Insurance is expensive – and it’s not tax deductible. The cost of PMI is usually about one-half of 1 percent of the loan, divided into monthly payments. For example, if you buy a $200,000 home and only make a 10% down payment, you would have a $180,000 loan. One half of 1% of that loan would be $900, which would be the annual cost of your PMI, or $75 per month. To top it off, you cannot deduct this expense on your taxes.

Lenders probably won’t tell you when you have paid down 20% of your loan. Lenders like collecting your PMI – it adds up to hundreds, or even thousands of dollars per year (and potentially millions across all of their loans). They are happy to continue collecting until you challenge them on it by paying off 20% of your loan or by getting an appraisal proving your equity is above 20%. If you don’t challenge the lender on your PMI, they are required by federal law to stop collecting once your equity reaches 20%. But that still gives them a couple months of additional PMI payments unless you notify them first.

You can avoid PMI. Many lenders won’t tell you up front that there are ways to avoid PMI. Some of them include special mortgages backed by the government, such as a VA loan, or other programs for first time home buyers. You can also avoid PMI buy purchasing a home with an 80-10-10 loan, which is a primary mortgage of 80% of the purchase price, a second mortgage at 10% of the purchase price, and a 10% down payment. The second mortgage typically has a higher interest rate, but that can often be less than the cost of PMI.

In the end, Private Mortgage Insurance can be avoidable in some cases, and it’s usually best to do so if you can. It will save you thousands of dollars over the course of your loan.

Buying a home is a balancing act. In addition to location, school districts, and size, you’ll have to throw the all-important money question into the mix. “How much house can I afford?” But what many homeowners don’t stop to consider is that when you buy can be just as important as how much you buy. Are you ready to take that big leap into home ownership? Here are a few hints to help you answer that question.

Is the market ready?

Buying a new home (or your first home) can depend largely on what kind of housing market you are working with. In the face of the financial hardships that many homeowners began to face just a few years ago, many of them are desperate to sell. This may seem like a report of gloom and doom, but it can actually be good news for you because it means that housing prices are lower than they would normally be.

Mortgage companies like Freddie Mac made news earlier this year when it seemed that the bottom fell out from underneath its interest rates. This was a good indicator for many potential home buyers that now is a good time to move. Magazines like Forbes were also reporting that these were the best mortgage rates the market had seen, both fixed and adjustable, in half a century. If you’re an opportunist, you may also see this as a sign to buy now because as the economy gets stronger, these rates are bound to increase again.

Are you ready?

More important than the climate of the market, however, is the state of your finances. A good deal on a home isn’t really a good deal if you can’t afford to buy it in the first place. This is where a bit of caution can go a long way for consumers, especially considering that many lending companies have relaxed their restrictions on who can take out a mortgage. Remember, the housing crisis was caused by the same kind of behaviors.

That is not to say that financially stable consumers shouldn’t be considering buying a home. But they should do the math first. The traditional argument for most homeowners has been that owning a home means that you are paying into an investment, rather than providing income for a landlord the way renters do. While this is solid logic, you should also consider the fact that owning a home can be almost twice as expensive (in terms of monthly expenses) as renting. You may begin with a fixed mortgage payment, but you should also calculate the costs of home owner’s insurance, maintenance, and property tax.

In addition to your monthly budget, you should also consider your long-term budget and credit history. One of the primary factors that can influence whether you’re ready to buy a home is your credit rating. Good credit makes you eligible for the lowest interest rates available on home loans, so whether you have put time and effort into boosting your score can make or break your decision to buy.

Another advantage for prepared home buyers is having enough saved up for a 20 percent down payment. Though current lenders are easing restrictions and letting people buy homes with less money down, paying off at least a fifth of the cost of your home upfront can drastically reduce the amount of interest that you’ll end up paying on your mortgage by thousands of dollars. Use a mortgage calculator to play with the numbers and see how much you can save by paying more upfront.

Now that you have a “cheat sheet,” deciding when to buy a home will be easier. Just remember to go at our own pace, not the market’s.

Many people consider refinancing their mortgage in order to reduce their monthly payment, save money on interest, or to take some money from the equity of the home to do home repairs or consolidate other debts. But do you know how to refinance a mortgage? Before jumping in, let;s look at a couple considerations, including the fact that refinancing is not always a good idea, and there are a variety of aspects to consider before you try to refinance your mortgage.

Good Reasons to Refinance Your Mortgage

You don’t want to refinance the mortgage if it’s going to cost you more money over the long run.  Common reasons to refinance:

• to switch from an adjustable rate mortgage to a fixed rate mortgage,  if the interest rates are predicted to increase. If you are overseas, you may have a standard variable rate mortgage.
• to lower your interest rate, if the rates were higher when you first took out the mortgage than they are now; or if your credit is better and would enable you to obtain a lower interest rate than you currently have
• to consolidate debts or to use the equity in your house to pay college expenses, living expenses if laid off, or make home repairs

Does Refinancing Your Mortgage Make Sense?

Sometimes it doesn’t make sense financially to refinance your mortgage.  There are costs involved with a refinance including fees for getting the new loan, potential closing costs again, and sometimes penalties for paying off the original mortgage earlier than planned.

If you may move from your home before you’ve experienced savings in your new monthly mortgage payments to recover the costs of the fees associated with refinancing, it doesn’t make sense to refinance.

If you refinance for a longer term (you had 20 years remaining on your original loan but refinanced to a 30 year mortgage) in order to get a lower monthly payment, you’ll still end up paying more for the home over the long term if you pay for it longer.  This doesn’t make sense financially if you intend to remain in the home that long; or if you can afford your existing monthly payments without refinancing.

Costs of Refinancing a Mortgage

Despite the potential financial benefits of refinancing a mortgage, there are potential costs associated with refinancing, including:

• Points – prepaid interest to the lender.  The more points you pay at the start of the loan, the lower your interest rate will be.
• Appraisal Fees – your home will need to be appraised in order to refinance the mortgage, unless it was just done recently.
• Loan Origination Fees – this fee varies but is normally between .5 and 1% of the total loan amount.
• Miscellaneous Fees – some mortgage refinances will have recording, copying, document preparation fees, or application fees.

Apply for Refinancing

If you decide that it makes sense to refinance, you’ll need to find a lender and apply.  You can often get the best deal from your existing lender, but you’ll want to shop around and find the lender who can offer you the best interest rate and lowest fees before choosing.

Once your application is complete, it will be sent off for approval and if approved, you’ll be scheduled for a closing and the mortgage will be refinanced.

Recent years have seen a boom in the housing market, making property investments a popular way of making money. However, the current financial climate has led to the stabilizing of interest rates along with property prices remaining steady, making people question whether or not now is a good time to be investing in real estate. It is always a good time to start building up a property portfolio providing you are prepared to commit long term. If it’s a get rich quick scheme you are looking for, property investments are probably not for you, but if you can look 10-15 years down the line, then it is likely you will see your property appreciating in price.

It takes time and plenty of research to know which of the many property investment opportunities is the right one for you. Many books and websites offer sound advice as well as national shows which hold seminars for potential investors. You can invest directly on your own by finding properties that can be improved and renovated, or you can choose to invest through a property investment company that does all the research and makes investments for you. Many of these firms have fully tested means for making sound investments whatever the financial climate and have the influence to make purchases below market value, ensuring considerable profits are made.

With shrewd buying it is feasible to build a sizable property portfolio in a fairly short length of time. Interest rates are at an all time historical low, while tenant demand continues to be strong. The healthy rental market continues to offer smart investors decent long-standing prospects. With so many property investment opportunities out there, choosing the right one for you is key to building a successful property portfolio and the more educated you are of the market, the more likely you will be financially successful.

Begin your research with understanding the legislation for landlords. Read plenty of books, keep an eye on the market prices and attend seminars, exhibitions and property shows. Novice investors may find approaching companies that specialize in property investments is the easiest way to start their property portfolio business. These consultancies and firms do the time consuming work for you by scouring the real estate market and examining the rules that certain property investments involve. By investing into a property scheme with a respected company you will be reducing the risk of financial loss. These firms pool investor’s money, giving them the buying power to purchase below market value, giving you better returns. These companies can also access deals that are unavailable to private investors.

You can begin to build your property portfolio with just a relatively small sum of capital. The more money you can afford to invest, the greater the opportunities are and the larger the returns are likely to be. A property portfolio does not have to be a huge number of properties, but can consist of just a handful. It is imperative you hold some money back as a reserve or buffer as your properties may not always have tenants in them paying rent. Property will make you money if rented out constantly at a decent rate, however it will cost you money if it sits empty for periods of time. It is therefore prudent to ensure you have a reserve of money for every eventuality.

If you decide to avoid firms dealing in property investments and invest independently, it is important that you locate the right property. Think about where the property is and whether you are going to manage it yourself or find a letting agent. Find out through the letting agents what the local rental rates are and what you are likely to receive as a landlord. Go to see all the available estate agents in the area you are looking at and visit as many properties as you possibly can. When you decide to make a purchase, find out everything you can about the seller’s situation and make sure you bargain to get the best price. Have a full survey done as you will be liable for any structural problems as a landlord and it may help with the price negotiations.

If you are uncertain of how to start building your property portfolio, join a professional property investment company. By becoming a member you will have access to their extensive research and collated market data, providing you with the facts and information required to make an educated investment decision. Property investment opportunities are endless and by selecting the right ones you will be able to not only develop, but sustain your fortune.

Property investment always has the goal of maximizing profits while lessening associated risks. By utilizing a property investment firm you will rely on their controlled models which have been designed to make money while decreasing risks in all market conditions. Their projects are put through rigorous testing and need to meet stringent criteria in order to be approved as potential investments for their members. Their aptitude for buying at below market value generates significant returns, making an investment with an experienced property investment firm a great place to begin for a first time investor who wishes to build up a profitable property portfolio.

People everywhere are looking to make predictions about what is next for the US housing market. Many people want to know whether or not now is a good time to buy a house, other people may want to plan for the future. Unfortunately, most of those predictions aren’t positive and don’t seem promising for the average American. The use of a mortgage calculator is a helpful way of deciding whether to purchase a home or not.

As the government joins in with the hordes of Americans in over their heads when it comes to debt, things are shaky at best and people just aren’t confident about what is around the corner. Some believe that things will get worse while others fear that it is already as bad as it can possibly get.

Is this a good time to buy?

If you aren’t already a homeowner, this may be the perfect time for you to jump in with both feet. Home prices are down and eventually they will rise again.

If you just want to own a home and plan to be in it for a long time, you may be one of the few people wanting to find an online mortgage calculator to figure out just what you can afford.

Get your funds and paperwork together

If you are serious about purchasing a home right now you can begin to put together the paperwork you need. If you haven’t done so already, start saving up for a down payment.

When that perfect deal finds you, be ready. The more work that you do upfront, the easier the process will be.

Look into different loans and programs

If you are a first time homebuyer, there are programs that can help you get into a home. You may be able to put down less of a down payment. You will also want to look into different terms, such as a standard variable rate mortgage, fixed rate, etc.

You may be able to buy a fixer upper and include some money for the repairs in the mortgage (you will get cash back from the purchase to use on the home). Depending on where you live and your current financial situation, there are opportunities that you just need to discover.

Decide on whether or not to use a realtor

You might be able to save money if you don’t use a real estate agent, but it takes a lot of work on your end. If you want someone else to do some of the legwork for you, contact a local realtor. They can find homes in your price range in the area that you are most interested in. Just give them a few stipulations and a list can be created just for you. If you don’t have a lot of time to look around and make phone calls, this can be an easy alternative.

Alternatives to buying

If you aren’t ready to make a purchase you can always rent until you are ready. While you are renting you can continue to save and work on your credit to make sure that you are really ready for the commitment of a mortgage. Because of the condition of the housing market in the US, you have time to get yourself together and then make a purchase. While renting, continue to check in with a mortgage calculator. You can plug in new rates or your additional down payment to see how the numbers have changed.

Typically, the longer a home has been on the market the better chance you have of getting it at a discounted price.

The global housing market is in tough times. Trying to sell your home in such a market can be a major headache. With profit margins at all time low, saving on real estate agent fees are more significant than ever before.

There are still a number of ways to market your property without engaging the services of a real estate agent. Here are some alternative ways that you can market your property and save yourself thousands of dollars in selling fees.

Market your Property Using Social Media

The most common use of social media sites like Facebook and Twitter are to post funny pictures and poke fun at friends and family. However, more and more commercial companies are turning to using social media to market their products so why can’t you use it to market your property! Facebook is a great way to advertise your property. Interest grows as friends look at the pictures of your home and leave comments, in turn, friends of your friends will have visibility for your property and so the interest snowballs and can gather significant momentum.

Twitter can work the same way. Even though you only get 140 characters, with the use of clever marketing, you might be able to get your tweet read by millions of the 175 million registered twitter users.

For Sale By Owner

Another way to get the word out about your house while staying in charge of the sale is to sell your house yourself. By cutting out any real estate agent and going with a private home sale, not only do you keep all control over the listing, you don’t have to worry about commission or fees. This allows you to keep 100% of the sale price. You will find sites on the internet that will allow you to list your property for free or very little and for a relatively small price also supply you with a for sale board. It is worth noting how effective a for sale board can be when you consider that 80 percent of the population will only move relocate 10 miles from where they currently live.

House Swap

Whilst not that common a house swap is exactly what it says on the tin! Believe if it or not there are websites out there where you can register your property details for other interested house swappers to search and you can search yourself for properties that fit your criteria. You can arrange a straight swap if you believe both properties to be of similar value, or if one property is of greater value than the other a cash settlement can be made to balance this inequality. It is recommended though that if an agreement is made with another party willing to swap their property, that the services of a lawyer is engaged to complete the swap.

Auction

Another way to sell your house without a traditional real estate agent is to put your home up for auction. There are several agencies that can do this for you, but it will end up costing you a percentage of your final sale price. Auctions can be difficult to locate in your area so keep your eyes out for their boards. Whilst you will typically be charged a percentage of the sale price this can often still be a cheaper method to sell your home than a real estate agent and the speed of the sale often far quicker.

If you are serious about saving money on real estate agent selling fees then give one or more of the above methods a try. They do work and if you try one of these alternatives we’d love to hear from you!