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Archive for the 'Financing' Category

Routine Repairs vs. Capital Expenditures (CapEx)

For some residential investors, capital expenditure terminology — CapEx for short — is unfamiliar.  Capital expenditure reserves are common in the commercial real estate sector but lesser known in the residential real estate space.

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Stated Income Loans for Investment Property

Norada Real Estate Investments is pleased to offer our new Stated-Income Mortgage Loans, available on many of our investment properties.  These loans are available on 1-4 units properties with just a minimum mid FICO score of 650.  You can get up to 70% loan-to-value (LTV) with absolutely no personal income verification.

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5 Reasons Real Estate Is (Once Again) a Prudent Investment

If you are someone who has given up on the dream of real estate investment, before even giving it a serious look, consider a few trends.

Construction is on the rise, foreclosures and repossessions are decreasing.  The U.S. Census Bureau recently reported that new residential sales in May 2014 have increased an estimated 16.9 percent compared to the same period last year.

Far from least, US median property sales are up over 11% annually, the biggest increase since 2012.

It’s clear, conditions are optimal.  Given today’s economy, with low property prices, decreased interest rates and a high demand for housing, there has never been a better time to profit from owning rental property.

In my opinion, the next five years will be the best ever for those who choose to make their fortunes in real estate.  If you already own good investment property, hold onto it dearly.  Don’t be tempted to sell.  If you’re on the fence, there are five things I want to share with you:

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Understanding Your Purchase Appraisal

Appraisal FormOnce you have a property under contract and you’ve performed an inspection, it’s time for your loan officer to secure a purchase appraisal.

Be aware that an appraisal will almost always render a lower value than you determined in your comparative market analysis, for a number of reasons.  Appraisals do not give an accurate market value – they simply give you a reflection of what you’re trying to accomplish with the bank.  There are actually different types of appraisals, and each one serves a different purpose.

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The Risk of Not Investing

Before I break down the risks of investing, one of the most important things you need to look at is; what is the risk of not investing?

Whether in businesses, real estate, stocks or mutual funds – what’s the risk of not investing your cash?

What is the risk of just putting it under the mattress and saving your money, or putting it into a bank account that makes a tiny interest rate every month – what are those risks?

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Due-on-Sale Clause – Understanding Land Trusts

This article is Part 3 of a four-part series on Land Trusts.  You can find Part 1 here: Understanding Land Trusts

Now you may be asking — how is the land trust going to help me with my lender?

The answer lies in why the land trust was created, and why it’s perfectly legal. It’s basically a compromise between two opposing forces.  On one side is the bank which is interested in generating income from loans and at the same time protecting itself through a security interest in real property — on the other side is the borrower (real property owner) who desires to transfer title to his property without fear of foreclosure or forced refinancing.  The bank acts as the protagonist by incorporating a “due-on-sale clause” into most, if not all, mortgages its writes.

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Infographic: History of Mortgage Rates

Since 1971, when mortgage rates first started being tracked, they have ranged from a high of 18.63 percent in the early 80′s to a low of 3.20 percent in late 2013.  Currently, rates are still relatively low and for many prospective home buyers, low rates can greatly affect the affordability of a home and the monthly mortgage payment.  But, what will the future hold?

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Top Ten Tax Deductions for Landlords

No landlord would pay more than necessary for utilities or other operating expenses for a rental property. Yet millions of landlords pay more taxes on their rental income than they have to. Why?

Rental real estate provides more tax benefits than almost any other investment.

Every year, millions of landlords pay more taxes on their rental income than they have to.  Why?  Because they fail to take advantage of all the tax deductions available for owners of rental property. Investment real estate provides more tax benefits than almost any other investment.

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How to Determine Property Values in Today’s Market

In today’s market where there are so many foreclosure and bank REO sales, figuring out the real value of a property can be difficult. The comparable sales method is the most commonly used — and still the most accurate one — to determine the value of single-family homes, condominiums and smaller multi-unit properties (two to four units).

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What is a Reverse Mortgage?

Reverse MortgageA reverse mortgage (or home equity conversion, as it is sometimes called) involves selling the equity in a home while retaining the right to live in that home until death (a life estate). It turns a home’s equity into regular cash payments. However, there are age restrictions on this procedure, as well as other disadvantages that might outweigh the benefits for some people.

We suggest that you seek legal counsel when pursuing such a plan.

What is a reverse mortgage?
A reverse mortgage is a type of home equity loan that allows you to convert some of the equity in your home into cash but retain your home ownership. Reverse mortgages work like traditional mortgages, only in reverse. Rather then making a payment to your lender each month, the lender pays you through advances against your equity. Unlike conventional home equity loans, most reverse mortgages do not require any repayment of principal, interest, or servicing fees for as long as you live in your home. Funds obtained from a reverse mortgage may be used for any purpose. This type of remortgage was originally designed so that seniors whose homes are paid for, or nearly so, can finance living expenses without having to sell their property.

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How to Appraise Real Property Value

There are many good reasons to have your property valued. Whether you are applying for a home equity loan or refinancing your mortgage, having an accurate reading on what the value of your property is will be important in achieving the financial goals that you have set for yourself.

There are some important things to consider when appraising your value, so here are the steps you will want to take to ensure that you get the most accurate reading on your property.

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New Record Low for Mortgage Loans (Again!)

Long-term mortgage rates continued to move lower this week, with a 15-year fixed-rate mortgage falling to a record low for the second consecutive week.

The weekly rate report from Freddie Mac says 30-year fixed-rate mortgages averaged 3.35 percent in the week ending May 2, down from 3.4 percent last week. The average rate on a 30-year fixed rate loan is just above its all-time low of 3.31 percent set in November.

A 15-year fixed rate loan fell to an average of 2.56 percent, on par with average rates for both one-year and five-year adjustable-rate mortgages.

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How the FICO Do I Repair My Credit?  [Infographic]

What is a FICO Score? Most credit bureau scores in the U.S. are calculated from software developed by Fair Isaac and Company. They are commonly referred to as FICO scores and include a rating based on information found in credit reports.

If you’re planning to finance the purchase of any investment properties now or in the future, then knowing what make up your credit score and how to improve it are critical.
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Surefire Methods for Building Your Credit Score

Credit scores can be the deciding factor for many major transactions. Lenders use credit scores to predict future behavior based on your past—if you have a low score because your cable bill is delinquent, then a lender won’t think you’re a good risk.

The credit score consumers are most familiar with is FICO, but there are a variety of credit scores, and each is customized to fit a specific transaction type. It’s wise to know about what these credit reports are saying about you, and a reputable identity protection and credit monitoring service can keep you up-to-date. Protecting your information, including social security number and financial accounts, is essential in safeguarding your future. An identity protection company will look after your sensitive data and keep it monitored under any possible threats.

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Why It’s Still Hard To Get A Mortgage

The housing market may be coming back, but a growing number of policy makers have expressed concerns recently that it’s still too hard to get a mortgage.

Federal Reserve governor Elizabeth Duke outlined some of these concerns and their causes in a speech last month. She was quick to note — as is anyone else who has sounded similar alarms — that she doesn’t want the market to return to the go-go days of 2005 or 2006 when anyone who could fog a mirror could get a loan. “But I also don’t think it would be a good idea to go back to the quite restrictive credit conditions of the early 1980s,” she said in the speech to mortgage bankers.

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