Archive for July, 2010
Jul
20
Affordable Home Insurance - A Need To Re-Examine
Posted by: | CommentsA disturbing bit of information from the American Insurance Agents Association saying that about u of home owners do not have adequate home insurance coverage is a sure source of concern. Do people know what it means to be fully covered? In fact let me ask you. Do you know what it means to be fully covered? Is your home fully covered?
Let’s really look at what it means to have your home fully covered.
Insuring your home usually has to do with its value. The idea of insurance is that should there be any disaster, the insurer bares the cost of replacing the insured item. The insurer gets the value of the item to be insured from you and with this information, they calculate an amount called premium to be paid at a regular agreed upon interval. Monthly or yearly as the case may be.
If the insured home were to get damaged within the terms stipulated, the insurer is bound to pay the value as stated and with which your premium was calculated.
So the question every home owner should ask is this. Can I correctly value my house?
A few points you need to know in valuing your home is that in most cases, real estate increases in value. This means that if you correctly value your home today, that value would be in accurate in the future. What this simply means is that to have your home and the possessions inside fully covered. You have to constantly update its value to reflect current market realities.
The lesson in summary is this, your home could be fully insured today but not tomorrow unless you take steps to update its value.
Help yourself get very affordable home insurance coverage by comparing quotes online. This is one of the proven ways of getting very affordable rates and best of all its absolutely free.
Repossession
Jul
16
Home Mortgage - A Deeper Insight Into Its Pros and Cons
Posted by: | CommentsBuying a house is such an ardent experience because of the fact that you have achieved your long day’s dream. However, what come next are the mortgage problems that you are going to encounter. Home mortgage is a smooth and easy process when you deal it in the right way. However, sometimes it turns out to be a little messy especially for first time buyers when they take a wrong move.
Prequalification and pre-approval is required when u get a mortgage before buying a home. The people who are benefited by this process are:
Yourself: - Prequalification makes you head in the right way by setting rates for the variables like previous income, debt, credit history, variations in different mortgage types etc. in the application form. It gives you a clear sense of direction.
Agent: - Since your agent is well aware of your mortgage parameters, it will be easy for him to look for a house that fits your range.
Seller: - A seller always chooses an offer that is pre-qualified because he will have only a second thought on ‘I will get back to you soon’ buyer who he cannot trust.
The first step for applying home mortgage is to fill the application form, which has details like personal earnings, monthly expenses, employment record, the house you are going to buy, debts to pay the mortgage etc. The lender will not approve the application if the credit history is not satisfactory.
The financial condition of the buyer marks an important deciding factor for the mortgage payment. A real estate judger will be consulted for the estimation of the property. This decides the amount of mortgage that is required by the buyer.
The loan decision affecting factors for house mortgage are
If the down payment offered by you is not sufficient, the lender goes for other mortgages that suit down payment.
If the appraiser underestimated the value of the property, the buyer can ask for re-examination. If the amount has already been paid, a copy can be received from the lender.
If the lender is not satisfied with the credit history, the buyer can explain him the debt ratios with the credit history standards.
Federal law plays an important role in preventing injustice that may possibly occur to the buyer or seller in the name of sex, creed, race, religion or physical disabilities. Federal law tells that
1. The lenders should willingly provide you the information like how to apply for the loan etc.
2. They should consult with the buyers about the various mortgage plans and analyze on which suits them the best.
3. They should be proactive in taking a decision without any delay after the buyer submits the application form and the other necessary details.
4. The lender should not have race or religion as the priority depending upon the neighborhood of the house that the buyer is going to purchase.
These regulations, when followed correctly, can help you in settling with a smooth home mortgage process.
Real Estate Professionals
Jul
11
Avoid Critical Commercial Mortgage Mistakes
Posted by: | CommentsAlthough it will not be easy, avoiding key commercial real estate financing mistakes is likely to eliminate critical commercial mortgage problems that often have disastrous consequences. The combined use of advanced investment strategies and proper precautions is likely to produce improved business finance results.
While we will not be addressing all possible commercial mortgage mistakes in this article, we will include several of the most severe issues to anticipate. In our experience, the potential difficulties involving factors discussed below are more serious and common than most commercial borrowers are likely to expect.
Inexperienced Business Finance Brokers and Lenders -
Commercial mortgage financing has recently become more popular with brokers and lenders that previously focused on residential real estate financing. More and more lenders and brokers are looking for alternative revenue sources due to residential financing difficulties. Many of them are devoting increased attention to business finance and investment loan services.
While this shift might eventually result in a positive outcome for commercial borrowers, the immediate impact is a sudden influx of inexperienced residential mortgage brokers and lenders attempting to provide investment advice for business financing and commercial real estate financing. For most business borrowers, the use of inexperienced business finance advisors will be a mistake of potentially serious proportions. As we have written about extensively, there are approximately 25 major differences between residential financing and commercial financing, and most residential financing experts are simply unprepared for business loan complexities.
SBA Loan Refinancing for a Commercial Mortgage -
Because it is more difficult to refinance an SBA loan or conventional commercial mortgage than many borrowers realize, it is advisable to thoroughly review refinancing options before completing the initial business financing if at all possible. The biggest potential business finance mistake involving an effort to refinance is likely to be an assumption that refinancing can be easily accomplished and whenever the commercial borrower chooses.
In reality most business and commercial mortgage refinancing situations will require less attractive terms than the initial business financing. Since acquisition financing includes terms not possible upon refinancing, this observation is particularly relevant for SBA loan refinancing. Another potentially critical mistake is to overlook short-term business financing options which will eliminate refinancing problems.
A major obstacle to refinancing a commercial mortgage, whether it involves an SBA loan or not, will be prepayment penalties and other financial restrictions that effectively prevent refinancing for several years. Short term possibilities should be considered if a borrower expects that commercial loan refinancing in the first three years of the business financing is likely.
Specialized Commercial Real Estate Investment Property Issues -
With more specialized commercial properties and investments, the potential for serious mistakes increases substantially because of the advanced business financing complexities. Commercial mortgage loan choices are also likely to be more limited because there are fewer lenders which will provide this kind of specialized commercial real estate financing.
Businesses involving apartments, offices and retail space are generally considered to be less specialized from a commercial lending perspective. This is due to the likelihood that potential users and renters of such properties are more interchangeable than for a business investment involving specialized uses such as a funeral home, golf course and gas station.
The business finance costs for more specialized properties are likely to be more variable and unpredictable than for office buildings, retail stores and apartments. For example, environmental and appraisal requirements for properties such as funeral homes and gas stations will be extensive and time consuming.
Solutions and Strategies for Avoiding Business Financing Mistakes -
The potential business finance mistakes described above can be overcome successfully. It is recommended that business borrowers find sources offering helpful strategies and background information which will provide a comprehensive comfort level for complicated commercial real estate loan factors. Business borrowers should thoroughly discuss business financing options with a business loan expert before refinancing or buying a commercial property or business investment.
Real Estate Professionals
Jul
07
Sell and Rent-back Option Details
Posted by: | CommentsDespite the growing popularity, a Rent-Back isn’t everybody’s best option. This article aims to give all the facts and information one needs to make the decision that’s best. Here we address your concerns; explain the plan details, including its advantages and disadvantages.
Recently there’s been bad press regarding some sections of the sell and rent back scheme. In an industry that is currently unregulated, there’s the opportunity for some individuals to act unethically or unprofessionally. A Rent-Back is a long term commitment so you should look at how established the company you are dealing with is and what guarantees they offer. Speak to as many companies as possible and whether you use us or another company, here’s what to watch out for:
• Does the buyer need a mortgage? Very few buyers have cash. They have to apply for a mortgage, get their lenders’ approval and then wait for the mortgage offer to be issued. This all takes time. We’ll pay cash for your property so there’s no delay.
• Your long term security of tenure. This is a long term commitment for any purchaser so you’ve better protection with a large well funded organisation than with an individual. There are also some companies offering a guarantee for a few years. All they usually offer is an intention to renew the tenancy every year, not a guarantee of security of tenure.
• Franchised operations. Groups of buy-to-let investors club together to share marketing costs. Your details would be handed to a local franchisee who’d buy the property themselves. It is possible that they will be honourable and will have the financial backing and experience to offer you a long term solution but there’s risk involved.
• Be wary of percentage quotes. Some companies quote a percentage of the market value as their purchase price. This can be misleading when a high percentage is quoted, but it’s based on a low valuation. When quoting a percentage it should always be based on an independent Chartered Surveyor’s internal and external valuation.
Make sure the company assures your complete confidentiality. Ideally, they do everything by post and over the phone. There’s no sale board, no property details in agents windows, in the local paper, or on the internet. As far as anyone else is concerned, it’s as if nothing has happened.
Find out whether a company guarantees a rental figure to avoid surprises in the future. A sell and rent back rental formula is included and agreed by our solicitors and we cannot alter this during your occupancy of the property. We aim wherever possible to agree on rental figures below the average for similar properties in your area.
Consider a situation when you may have difficulty paying the rent. Ask the company what they can offer as a solution, for instance, some companies may offer to claim Housing Benefit.
Find out whether a company guarantees you an option to buy your property back if you want so later. Some may offer an on-going Buy-Back option if requested at the outset, which they can agree with you prior to purchase and will be legally binding on them at any time during your occupation.
To reduce your costs, look for no set-up fees, estate agents fees and no home information pack needed as this is an off-market transaction. Company should be able to pay all your legal costs too, including that they subsidise the valuation fee which is payable on application and is refunded to you in full on completion.
By law, after the first year, you would not have a guarantee of tenure. If you decide to go for the scheme, you can get some piece of mind by going for an established company with many years in business. For instance, a company can offer a legally binding side letter stating that if they were ever to ask you to leave; they’d have to pay you a penalty of £10,000. A serious business should be aware that this side of the scheme may put clients off, so look for a company that are open to suggestions on making it more comfortable for you.
Home Cash Release is not ideal for everyone’s circumstances so before you make a decision here’s some disadvantages to consider.
• You’ll be selling your property for less than you’d receive on the open market although you’ll have no legal fees, estate agents fees, home information pack fees or excessive mortgage payments to pay.
• You may lose means-tested state benefits that you’re currently entitled to although the plan will not affect your State Pension.
• We recommend that you discuss your intentions with your family before you proceed as you’ll be selling the whole of your property so neither you nor your beneficiaries will benefit from any increase in its value in the future.
Quick House Sale
