Anyone planning to invest in real estate should remember that it’s a business and should treat it as such.
The first step in managing a successful real estate venture is to create a business plan complete with revenue projections for your first few years.
Next you’ll want to set realistic one-, three-, five- and ten-year goals so that it’s clear what you’re working toward.
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Although home prices have been increasing, so too have rent prices. So with interest rates as low as they are, it may be better, financially, to purchase a home than to continue to rent.
Even former HUD secretary Shaun Donovan has spoken out on the issue and said that the rate at which rents are rising is the worst the country has ever known.
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It likely comes as no surprise that when an underwriter is reviewing an individual’s mortgage application, income plays a huge factor.
“We want to see a history of income that’s documented and has a likelihood to continue,” says Arlene Allert Maloney, Senior VP of Wells Fargo Home Mortgage.
And for individuals with lower incomes, all is not lost. Allowing your income to go further by paying off debt will make you a more attractive candidate.
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Filling out loan documents is a long and complicated process, and you’ll be asked to sign lots of documents that you may not fully understand.
If this happens to you, don’t be afraid to ask questions.
The complexity of the process is “not necessarily a bad thing,” says LearnVest’s Ellen Derick. “But you should know what it [all] means.”
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When budgeting for your mortgage, consider spending no more than 30 percent of your monthly income on your housing costs. Spending more than that makes for a cost-burdened household, making it difficult to afford other everyday living expenses. According to the Harvard Joint Center for Housing Studies, approximately 40.9 billion households in the United States were cost-burdened in 2012, the most recent year covered in The State of the Nation’s Housing report.
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“Singles, couples, families — at some point almost everyone turns their financial attention to buying a home. But how much do we really need to save the first time out? How much is enough to handle the typically steep curve of down payments and closing costs?
When it comes to saving for a home, there are some helpful rules of thumb. But then, there are also alternatives for buyers who need a leg up.Let’s look at the basics and some workarounds when considering approaches that first-time buyers can take to getting through the front door of their first house…”
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“Many beginner or speculator-type real estate investors think that the crux of real estate investing is finding a distressed property, fixing it up, and selling for top profit. Keeping it as a rental ends up being a mistake, a backup plan, or a last resort for many people. But is keeping a property as a rental always a bad thing?
Regardless of how you come about owning a piece of property, there are a few things to keep in mind when considering whether you should keep it as a rental or not…”
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“I have plenty of experience going into debt. I’ve spent over half my life paying down a mortgage. I’ve taken out more than one home equity loan and have made more than my share of car payments. Have I ever been debt-free? Yes, for the first 18 years of my life. But now that I’m approaching retirement, I am nearing that state of equanimity once again. So I know how to get in and also how to get out.
There are plenty of ways to dig yourself deeper into the hole. For most of us, these are the top five debt traps…”
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“Interest has increased in recent years about whether reverse mortgages are a practical way to supplement retirement income. In a reverse mortgage, a lender makes payments to you based on a percentage of your home’s appraised value…”
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“While 30-year mortgage rates are not quite as low as they were during the first half of 2013, the current average rate of 4.14% is still very low on a historic level. In fact, before the mortgage crisis hit, we had never seen rates this low.
Despite the attractive rates, you don’t need to be in too much of a rush to buy right now. Despite what some of the recent news headlines might have you believe, I don’t think the low rates are going anywhere anytime soon. Here are three reasons why I think you’ll be able to take your time getting ready to buy a home…”
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