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Home Equity Line For Real Estate Investing?
Posted by: | CommentsFor the last few years the “home equity line of credit” has gotten a lot of attention.
Home equity is the value of your home minus the remaining mortgage balance which is outstanding. While you live,and sleep in your home worrying about debts or wishing you could refurnish the living room you may be sitting on the cash that will grant your wishes.
Why Would You Want an Equity Line of Credit?
With a normal loan, which deposits a set amount of money in your account and begins charging you interest and payments at a fixed rate until repaid, a line of credit acts sort of like a credit card account. You do not need to pay interest on the full amount you have access to — only on the amount you have used. (And in some cases you then have access to the account again.)
Using an equity line of credit (also known as a Home Equity Line of Credit or HELOC) gives you greater flexibility with the least cost. Not only can you access the credit only as you need it, but your monthly payments will reflect only the balanced used. The less used the lower your payment.
A HELOC is a great his if you don’t want to spend a large amount in one place..as well as if you want access to that credit agian, once it has been repaid, without asking for another loan.
What can the HELOC be used on??
We can all find lots of uses for a line of credit loan…but here are some of the most common examples.
Consolidate Debts
Consolidate or wipe out some of your other bills/debts completely. Not only does this make your monthly breathing room a bit wider…but in the long run it will help your credit score and interest rates that are offered to you on other loans as well.
Second mortgage
Use your line of credit to pay off the existing mortgage for better interest rates.
Travel, remodel, or Addon
You may use your line of credit for renovating, buying new furniture or a car, or taking a vacation with less interest payments than using a credit card or store card making it a wise choice for large purchases.
The Down Side of a Line of Credit.
While the before mentioned information sounds great…whats the rest of the it look like.
Some debts — like student loans- have features that you may not be entitled to if you switch them to an equity line of credit.
Other items like cars and vacations may seem like a good idea to buy with your home equity line of credit, but with the ability to pay only the interest you may find the motivation to pay off the debt is lacking and end up owing for items that have lost their value or were consumable. Plan to pay off the debt quickly for the most advantage.
Now refinancing a second mortgage may not be a good idea depending on interest rates and your repayment terms. While lines of credit take advantage of current low interest rates you may find that your regular loans protect you better from fluctuating rates if you will not be paying the loan down in the next few years.
We all understand the freedom and relief that comes from having access to extra funds. For both those emergencies, as well as last minute purchases. However its important to understand the risks as well as benefits.
Doc Schmyz has worked with investors all over the US. He built a free free website shares Real estate investing information for all over the US. Findreal estate information by state
Got An Offer On Your House… How To Judge The Offer?
Posted by: | CommentsSo you decided to sell your home, you have interviewed several real estate agents, picked the best agent, and have listed your home. There have been several open houses and some interest and you have finally received an offer. How do you tell if this is a good offer or not? Of course, your agent will help in that department, but, remember, they are there to sell your home they don’t have any idea what will work for you and your family.
First thing you should look at is the buyer’s financing. Are they able to get a loan or are they just hoping to qualify? The best case scenario would be that they are pre-approved which means that a bank/lender has taken a look at their income, credit, and down payment and has agreed that they would qualify for a certain amount of financing. This is a good indication that the loan will go through. As a seller, you or your agent has the right to contact the bank and make sure the information presented is correct and that the bank has verified income, employment, and down payment funds.
Next,consider if the buyer has put down a substantial down payment. The larger amount, the better for the sale to go through. The more money the seller has invested in the contract, the less likely they will be to back out. It also shows how “heart felt” the buyer is on the property.
Watch out for special conditions within the contract that you cannot meet or control. For example :If a buyer must sell his home first before purchasing your home.This condition requires you to factor in other questions. Does he have any offers on his home now or any approved buyers? He does have his house listed with an agent, doesn’t he? If there are any clauses that you do not understand, you must clarify them in writing. Be sure you understand every word on the sales contracts…if your not sure of the terms used make sure you ask your agent.
One other thing that you must realize in the real estate contract you will receive is there are dates and deadlines that must be reviewed. There is a certain rhythm for things to happen. For instance, there should be an inspection, appraisal, loan approval, and the closing date. These items should not have excessive time allotted to each by the buyer. For example, the closing date must allow time for the bank process to be completed including the underwriting, appraisal, and paperwork. The inspection date should be close to the contract date to allow time for any problems to be resolved quickly by the seller so the contract can be completed.
Any of the above mentioned items can void your contract. Be sure you understand all that is being asked of you, make sure the terms listed and set in all the documents make sense to you, before you complete the sale.
Doc Schmyz has invested all over the US and Canada. He owns a free website that shares Real estate investing information for all over the US. Findreal estate information by state
New To Real Estate Investing?
Posted by: | CommentsSo you decided to get into real estate investing. Good for you! While at first, real estate investing can seem a bit overwhelming, if you pay attention, you will be paid in rewards and dividends for years.
Where to start? Well lets look at a few basic tactics for a new investor.
Plug into your local real estate investors association. Most medium to large communities have a real estate club where other real estate investors attend regular meetings. These are other investors with the same goals and dreams as you.
People gathered together with like minds create a social atmosphere that motivates new investors to take action. Club members share ideas with other members, discussing what works and what does not work in real estate investing.
Before you spend a dime. Make sure you map out what you want to invest in and what youre going to do with it. BE SPECIFIC. What type of property? Are you going to hold it for appreciation or are you going to turn it over?
So know you need to decide on the type of investment property you want to invest in. do you like the idea of duplexes? Single family homes? Small apartments? Remember this, if you start out with one type and become familiar with it, then you will learn exactly what you need to do to make the profit from it. Being a specialist in this manner can lead to faster profits.
Building your team is the hardest part of the whole process. You need to find good quality craftsmen who wont break your budget. Contractors, sub-contractors, plumbers, electrical guys…all of these are important. GREAT ones who do good work are harder to find then a good real estate deal. When you find one…hold on to them.
If you will be working with “fixer-upper” houses, line up a plumber and an electrician, as well as heating and air-conditioning experts. Better yet, find a reliable “handyman” who is capable of doing many of the jobs needed in fixing up houses.
Working with an investors real estate agent in a dream….but they are a nightmare to find. Interview your agent. Tell them exactly what you want to do. Tell them…I want to invest in real estate…I want to buy x amount of properties a year”. This means you need to have an agent thats willing to do far more for you then just show you a house or two. A good agent will write offers…LOTS of offers, and show you the selling history for a given area.
Have an exit tactic in mind. This is a critical element of investing in real estate. How are you planning on selling this house once it is fixed and ready for market? How much room do you have on price so you sell it and still make a profit?
Every beginning real estate investor will make mistakes that cut into potential profits. It is imperative to recognize these mistakes and correct them before they can cripple the business.
Be efficient, and resourceful. Keep your eye on your bottom line and you will grow a nice little investment business.
Doc Schmyz has worked with investors all over the US. He owns a free website that shares Real estate investing information for all over the US. Find real estate information by state