What is Amortization?

A mortgage loan that is amortized has a fixed payment over a fixed period of years. Each payment has a portion of the payment going towards interest and principal. The longer the loan goes the higher the amount of the payment goes towards principal and a lower amount is charged to interest. Most of the interest paid on an amortized loan is paid in the beginning of the loan. In fact on a 30 year loan you don't even own half of your home until the 24th year. Your best bet is to pay as much as you can in the beginning of the mortgage to save yourself thousands of dollars.

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What is a balloon payment for a mortgage?

A balloon payment would be the amount of money that is due at the end of a loan. Not all loans are 30 years. Some mortgage loans allow you to pay a lower payment for a short period of years with a balance that is due at the end. Typically these types of mortgage loans are 5 to 7 years in length. They differ from adjustable loans in that and adjustable loan will have a rate adjustment at the end of the fixed period versus have the entire balance due like on a balloon payment mortgage.

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What is a wrap or wraparound loan?

Commonly referred to as a wrap, carry, carry back or wrap around loan, This type of financing is when a buyer takes over the payments for the seller. This allows the buyer to get a loan without qualifying. The only catch is that most residential mortgage loans have a due on sale clause. What this would mean for a wrap loan is that once the title is transferred to a new owner, the loan should be paid off. Most lenders don't have a habit of checking on the status of the title. The banks main concern is the the mortgage instrument is being paid. As long as it is not deficient they usually don't care.

If you are considering doing a wrap or wraparound loan, I would recommend speaking with an attorney first. This type of loan does come with some concerns that need to be addressed.

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Free money to buy a home

No I'm not crazy. With the Ameridream program you can get a seller to contribute 3% of your down payment for your home purchase. If you don't have any money, the fha will also allow a seller to pick up all of your closing costs. Effectively you can still buy a home with no money down and have equity in the property. The key is to find a seller that is willing to provide you this funding. With the real estate market the way it is, sellers have to be more aggressive in the marketing of properties. A seller can give you up to a 6% concession on an FHA loan. In a buyers market, you should be able to find a seller that is willing.

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What is Chattel?

Chattel is a term used in the real estate world to refer to personal property. In a residential transaction, the purchaser is buying the real estated or everything nailed down to the property. If it is not nailed down, it is assumed to go with the seller. A refrigerator that is not nailed down is assumed to be the property of the owner and will go out the door with the seller. It is considered chattel. Unless there is a written agreement to the contrary, the refrigerator will go with the seller.

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What does Abeyance mean?

The term Abeyance is a french word that when translated means "gaping". An abeyance refers to property where there is an absence of clear ownership or title to a piece of real estate. Abeyance also carries the expectation that the ownership issue will be resolved in a quick and reasonable period of time.

During an Abeyance the property is not allowed to be sold. There must be owner of record for a property to be sold. Once the Abeyance is resolved, the person who is determined to be the owner will be responsible for the taxes.

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What is a REIT?

In short, the term REIT stands for Real Estate Investment Trust. A REIT is a company that owns and most often will manage income producing real estate. The US Congress established the REIT back in the late 1960s to give small investors the opportunity to invest in large income producing real estate. Most REIT stocks are traded freely on most major stock exchanges.

There are over 180 REIT entities today. Most REITs focus on one particular type of real estate. Others handle the management and the maintenance of real estate.

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What you don't know about Jumbo Loans may kill you

If you are trying to sell a home that would require a jumbo mortgage you may be in for a shock. What most people don't know is that their is a big difference between conforming loans and jumbo loans when it comes to interest rates. Jumbo rates can be as much as 3% higher than conforming loan limits. Some Jumbo mortgage interest rates are 9% or more. This is bad news if you are marketing a luxury home. These higher rates makes the pool of buyers much smaller. The best bet obviously is if they can pay cash. If not, you may need to wait it out or be very patient when trying to find a buyer. It is just going to take longer to get these properties sold. I think most people don't realize how much jumbo mortgage rates have jumped. This is just the banks way of hedging their bets right now. Banks have more exposure when it comes to jumbo loan. With all of the turmoil due to the credit crunch, many lenders are just skid dish now.

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Will Global Warming impact property values in the Southwest?

I have been hear more conversations in the media regarding the impact of global warming on property values. I just saw a story in Florida about owner that are concerned about their beach front properties being less desirable because of hurricanes and rising sea levels. A similar conversation has started in the Southwest in some of the most arid areas such as Arizona, Nevada and parts of California. Hot summers now would be unbearable if it were another 5 degrees warmer. I can't imagine anyone wanting to move to Phoenix with temperatures a constant 120 degrees in the summer. What do you think?

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There are no Stated Income Jumbo Loans

I have had two calls this week from self employed people who want stated income jumbo loans. To set the record straight, there aren't any anymore. If you are self employed and want to buy a home, you will have to start reporting your income. I just spoke with a gentleman who needed a refi on a $600,000 mortgage. He had equity in the home for it was worth over $1,500,000. I got his tax returns and he is reporting just over $50,000 in come. This was a well to do individual who was belligerent in his assertion that he should have no problem in getting a loan. Well the truth is the banks don't care who you are anymore, they are going by the book these days. If you don't have documentable income, then no loan for you. Stated income loans help people skirt the issue of declaring income. I don't blame people for wanting to reduce their tax burden, but it is time to pay the piper now.

What is Ameridream?

Ameridream is a non profit company that helps low to moderate income individuals or families by a home by providing down payment assistance. The Ameridream dpa program has been setting the standard for which all other down payment assistance programs strive to be. To get the Ameridream cash assistance, you must find a seller that is willing to participate in the program. The seller pledges money from the proceeds of the sale to the Ameridream foundation. In exchange Ameridream will gift the buyer the down payment needed for the FHA financing. Typically it is 3%.

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Interest Rates may have hit bottom according to the Federal Reserve

The fed made it's quarterly speech yesterday. It appears they are taking the stance of no further rate cuts. The market is now on its own. If you are waiting for interest rates to go any lower, they wont. If you think Obama is going to win the election you better refi now. I don't think interest rates are going to go any lower at this point.

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Is The Real Estate Market Ever Going To Come Back?

May 21, 2008

Is The Real Estate Market Ever Going To Come Back?

I hear it everyday… Will this real estate market ever come back? How long is this going to last? Have we hit the bottom yet? Well, the honest answer is, no one knows for sure. If you were to line up ten educated and seasoned real estate analysts, you’d surely get a 50/50 split in the opinions. Some say we’ve already hit bottom, other’s say we won’t see it until Spring 2009. It certainly seems like the newspapers do all they can to keep a negative spin on current conditions! I recently came across this excerpt from the Wall Street Journal, one of the finest of all newspaper publications. For once, a newspaper, more importantly, the WSJ offers a more positive spin which gives homeowners and consumers hope. Read on…

May 16, 2008 (Wall Street Journal) Home construction turned up unexpectedly in April and showed surprising vigor, making the biggest increase in two years, while building permits also rose, a sign of optimism for the sickly housing sector. Housing starts increased 8.2% to a seasonally adjusted 1.032 million annual rate, driven higher by a surge in apartment buildingconstruction, the Commerce Department said. Starts plunged by a revised 13.8% in March to 954,000. Economists expected April starts to drop by 1.4% to a 934,000-unit annual rate.

Written By: Dan Blew, Propertynut.com (with contribution from the Wall Street Journal)

Can I still buy a home with no money down?

Easy answer is yes. FHA has some great options available. With an FHA mortgage you are allowed to have a seller pay all of your closing costs and provide a down payment. You must find a seller that is willing to do this because all of this money comes out of their proceeds. But in a down market sellers are more willing to do this if they are motivated to sell their property. My advice is to find a Realtor this is familiar with FHA financing knowledge to help you work out a no closing cost home purchase.

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Your Realtor may ask you for money upfront due to high gas prices

With gas approaching $4 a gallon this summer, don't be surprised if your real estate agent asks for money up front before showing you property. It used to be that one of the perks of using a real estate agent was getting shown property on the agents nickel. I am now hearing reports of agents getting a fuel retainer to cover costs in looking at property. It is also a great way see if a buyer is really serious about looking for property or are they just tire kickers.

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How Do I Advertise My Property Online - PropertyNut

Need to rise above the competition with selling your home, or your property listings? Find out why PropertyNut.com is a great service in helping 1000's of houses for sale to get sold! (click for Full Story)

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Get to Know the Power of FSBO - For Sale By Owner

If you are considering selling your home on your own, aka For Sale By Owner, or FSBO you should read this article. It is gratifying to sell your own home, but there are some things you ought to know before you set out on this journey.

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Real Estate Sales Contract - Unique Items To Observe

If you are selling your own home, you will need to be prepared. Read this article to get tips on what you need to know about the real estate sales contract click for Full Story)

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Need To Sell Your Home - Look Online For A Listing Agent

There are a ton of real estate agents, but not that many of them know how to effectively advertise homes on the internet. Most agents rely on their office to upload properties on the MLS and hope that the word gets out about their listings. This is not sufficient - Look Online For A Listing Agent


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How To Write An Ad For A Home On The Internet

There are many websites to sell a home online. And there are many homes for sale online. The key to getting your home found online is your ad. Write your ad for the home buyer - the searcher. Find more about how to write your ad to sell your home online.


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Credit Report companies do not allow Affiliate Marketing with credit repair companies

If you are a website owner and offer credit repair content on your website, credit reporting companies such as transunion, equifax and experion will not allow you to sell a credit pulling product on your website. Seems odd that the credit reporting agencies do not want you to get information that might help you improve your credit score. I saw this information on commission junction. I was interested in offereing people the ability to pull their tri merge credit report on my website.

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Foreclosures continue to rise in April

The new numbers on new foreclosures are out and they are not good. Compared to last years numbers, foreclosures are up 65%. Nationwide over 240,000 households received at least one foreclosure filing. This is up from just over 147,000 as compared to last years numbers. This is according to Realty Trac. The hardest hit states for foreclosure are Nevada, Arizona, California and Florida.

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Is debt consolidation right for me

Is debt consolidation right for me? It depends. If you have been late a few times and your rates have been raised to where your can't afford the payments anymore. You may want to consider a debt consolidation program. Typically we are talking about consumer credit counseling. It is no longer a dirty word. It used to be that in a CCCS program you could not get a mortgage. It was looked at as a chapter 13 bankruptcy. Now you can buy a home even if you are in a consumer credit counseling program. The history shows that people in a consolidation program are no more likely to default than people that are not in a program. One nice thing that a negotiation program can do for you is to stop rolling lates and over the limit fees. This can be a real killer for people.

Before you sign up for any program, check online with the rip off report and the Better Business Bureau.

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Debt Negotiation may be cheaper than filing a Chapter 13 bankruptcy

I just had a client that was interested in doing a debt negotiation program. They checked with their attorney to see what the monthly payback would be and it worked out that it was cheaper to do a debt negotiation program than a chapter 13 bk. From my understanding it is that the laws for bankruptcy have gotten a lot tougher so it may be cheaper to do a debt settlement program. If you are considering a bankruptcy, you may want to check with a debt negotiation company just to compare what the payments would be.

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Realtors beware, your clients down payment could be disappearing

Many people use their home equity lines as down payments. If you are a Realtor you need to be aware that banks are pulling back and canceling many of them. I have had mine canceled in recent days. I would advise you to tell your client to pull the money out now and not when they need it. Because when they need it, it may not be there.

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The best real estate deal if you are buying a home is Ameridream

If you are a low to moderate income buyer and are looking to buy a new home, then you might want to get a gift of equity to buy your home. AmeriDream is a charitable company who is committed to people being able to buy a home who need down payment and closing cost assistance.

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There are no real estate appraisers in Ireland

When I was in Ireland I learned that they do not have real estate appraisers. Over there the estate agent or real estate agent does the property evaluation. One of the issues being covered in the news while I was over there was that some agents were inflating some of the values by as much as twenty percent.

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Why it's bad news that millions of home equity lines are bing cancelled

From the previous post I reported on my home equity line of credit or heloc was cancelled by National City. This is bad news for the economy because millions of home owners were tapping there home equity lines to make purchases, buy cars, make home improvements or just go on vacation. With these credit lines no longer available, this only means less money being put into consumer spending and the economy. My guess would be that it will take a few years to get the economy turned around. Hopefully lenders will loosen their lending guidelines which will make it easier for people to get money. This would help.

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National City cancelled my home equity line

Be on the look out for a letter in your mailbox alerting you to the fact that your home equity line has been reduced or canceled. This is my second one that I have received in the last 30 days. The line on my rental property from Washington Mutual was reduced $20,000 and now my line on my home of $60,000 was completely taken away by National City. They may not honor any checks that were written so you need check on that. To answer the question, a bank can do this on a second mortgage? It is definitely in the provisions of their notes to reduce or suspend any credit line.

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We are getting hosed in the US on our Savings account interest rates

Another thing that I noticed on my trip to Ireland is that we are getting hosed on our savings account interest rates. My HSBC account pays me just over 3%. If I had a Halifax account I could get up to 7.25%. The US just can't compete in the equities market anymore. I wonder why nobody is covering this. I think it would be good information to know. I wouldn't mind putting my money in Euros or Pounds. US currency is going down the hole based on what I saw overseas.

Check out the Halifax.ie rates. It will piss you off.

Halifax Rates

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Ireland and the UK is feeling the fallout from the mortgage mess in the US

I just returned from a trip to Ireland. I live in Arizona and coming from the desert I was in for a real shock. It just wasn't the weather or all the greenery. One thing I noticed from city to city was the amount of real estate for sale signs everywhere. This was even the case in the Isle of Man where I saw tons of Chrystals signs all over. There were Sherry Fitzgerald signs on every corner in Ireland. Sherry Fitzgerald is one of the biggest real estate companies in Ireland. I was told that Ireland is always six months behind of whatever the United States is doing. If this is the case they are in for a bumpy ride. I know that in Arizona this is still a huge inventory that needs to be dealt with before the market can turn around here.

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