Those who take property ownership seriously often look for options to build equity at a faster pace. An aggressive approach is to select a 15-year loan program over a 30-year mortgage.
A 15-year loan works well for home buyers budgeting time and money, those who are possibly looking forward to a debt-free retirement, or those who plan to upgrade to a larger home within 15 years. But this requires a sincere commitment to making substantially larger monthly payments.
Provided the homeowner can afford the financial commitment of a 15-year loan, they will pay significantly less money in interest simply because the life of the loan is spread over a shorter period of time. This will also result in a larger tax deduction; but again, over a shorter period of time. However, they need to be aware that unless they are extremely financially secure, even a minor setback can have a tragic impact on their ability to make mortgage payments on time and in full. The bottom line is that it's probably not a good idea to put all available cash into a mortgage payment and lose any hope of a financial cushion in the event of emergency.
A less vulnerable approach is to consider making principal prepayments on a 30-year loan, or to invest the extra dollars into another type of asset accumulation account. Here the compelling question is, is it better to take the risk of a non-guaranteed investment, or bank on the guaranteed savings on mortgage interest?
Making prepayments on a 30-year loan is often deemed to be the safer route, and the borrower can make the extra payment when they want to, rather than through obligation. If the homeowner has made less than a 20% down payment, principal prepayment offers them the ability to have their loan reviewed by the lender for the purpose of removing any private mortgage insurance payment (PMI) earlier than expected. First, the borrower needs to discuss prepayment procedures with their lender, and take into consideration whether there is any prepayment penalty associated with their financing before initiating prepayments. They should also note that principal prepayment reduces mortgage interest, which is tax deductible. Depending on what their tax bracket is, this may or may not be beneficial to them.
If the extra money is invested in some other vehicle, the earnings will be reduced by taxes (unless the money goes into a tax-exempt fund). The borrower should compare the mortgage rate to the rate of return on another type of investment, and decide if it makes more sense on an after-tax basis to invest the extra money somewhere else and have the ability to liquidate those assets if necessary.
Bi-weekly mortgage plans are another option for building equity at a faster rate, but consumers should be wary of companies that ask for a setup fee and monthly charges. The most important thing to note is that each client has different goals. These are just a few options for building equity.
Are you a homeowner that is stressing out or concerned you may be headed for a foreclosure on your home? Do you know what to do or who to turn to? You need to talk to three types of people for help: the first person to discuss your personal situation with is an attorney, second you need to speak to your account/CPA and the third person you need to speak to is a CDPE certified Realtor. You probably are thinking what is a CDPE certified Realtor? This is a Realtor that has 16+ hours of class room training and has made a huge commitment financially and time to continuing education in the Certified Distressed Property Expert. Most Realtors may attend a 2.5 hour course given by a title company. This is not good enough to be able to call a Realtor an expert or knowledgeable.
Many homeowners need help right now in the market place. The homeowner who is in distress does not need or have time for a Realtor who has no idea what they are doing. Not every homeowner qualifies for a short sale. Do you know what a Short Sale is and why a Short Sale, if possible, is so much better for the homeowner than a foreclosure?
Time is of the essence is an understatement in the case of a short sale, avoiding foreclosure. All homeowners that are facing a foreclosure must find a Realtor that has the CDPE designation, Certified Distressed Property Expert, and hire only that Realtor. Do not wait until you have missed a mortgage payment(s) to call, if possible. Call as soon as you are concerned regarding your situation so you can understand your options to avoiding a foreclosure. A homeowner should insist on a CDPE designation Realtor only. A CDPE Realtor will help you explore ALL options, including staying in your home, if possible. WE CAN NOT SAVE EVERY HOME BUT WE GIVE EVERY HOMEOWNER A FIGHTING CHANCE.
If you are a buyer looking to purchase a Bank Owned Property, REO property, for yourself or as an investor, DO NOT kid yourself these homes are NOT easy to find. If you think you can drive neighborhoods and find these homes it will not happen very often.
The banks decided to give their listings to very few Realtors and these Realtors usually do not put signs on properties. Most of the Realtors who receive these listings from the bank will have 30 to 100+ listings at a time. These Realtor do a poor job letting the public know about these properties. If only the banks knew how poorly these homes were being marketed?
Also Buyers if you are searching on Real Estate Companies and Foreclosure specific web sites for properties, all you are going to find are properties that are the listings of that company only. So again you are limiting the homes available to choose from. Open up your available market of homes and find a good Realtor.
If you as the consumer/investor are interested in a REO property, bank owned property, you need to connect with a good Realtor to insure you are finding every possible property that may fit your needs. Please do not waste your time driving around neighborhoods thinking you are seeing the full market. The market has never been better for the investor/consumer.
Positive cash flow, high cap rates, reduced prices, low vacancy rates, still one of the fastest growing areas in the country. Yes, this is what investors are seeing in the metro Phoenix market for multi unit properties and they are starting to act on the great potential here. The metro Phoenix area has a broad range of multi unit properties on the market. Some of the units I’ve recently seen are a clean fully occupied 4 plex for under $60K and a 12 unit complex, fully rented, for under $500k and lots of properties in between. There have also been several larger, hard to find, apartment complexes on the market for you investors with bigger plans (and bank accounts).
For all of you under 50 who are concerned about your future retirement accounts tied to the stock market (IRA, 401K), this may be a great time to diversify into real estate. Use some of that self directed retirement money and get into the real estate market while the numbers are in your favor. Real estate is a long term investment, if you’re looking for a flip property or something you can sell after a year or two for a substantial profit, this is still not yet the market for you. If you want a long term investment that has great growth potential while supplying you a positive cash flow immediately, now’s the time to get in.
Well it’s been a quite a while since the market has allowed investors to get back in the real estate game, but it’s finally here. With the stock market continuing to tank and retirement accounts shrinking the average person is looking for something to grasp on to, to have some hope in being able to retire before they have one foot in the ground.
We are seeing professional investors getting back into the real estate market in droves. They are focusing on multi unit properties as well as single family homes. The average person looking for some security is also looking into real estate again as a long term investment value. There are a few things driving this resurgence: low interest rates, Fannie Mae allowing up to 10 properties, short sales and foreclosures depressing the price, more people needing to rent due to the economy. It’s like the perfect storm for anyone looking for a long term investment with a positive cash flow.
Here in the Arizona market we have finally seen the bottom of the housing market. Most areas have been stable for the past few months and with the government action to keep people in their homes, the foreclosure issue should clean up in the next year or so. Once the foreclosure market is reduced substantially we will begin to see the property values start to increase.
Relocation is a part of the corporate lifestyle. If it was not for a relocation package from corporations many employees would not be able to relocate because of the expense of moving. If employees do not relocate then many would never move up the ladder to a more challenging job, and of course better pay.
Sellers, when your employer offers you a relocation package this is a huge help and savings. It is so important that you use a Realtor that understands the process. You can jeopardize your benefit package if the process is not handled correctly. You can not hire a realtor from XYZ Realty and expect the realtor to know how to protect you and know the process. The paper work is very different, the process is very different. Another issue/problem you may run into is the buyer’s Realtor. Many times the buyer’s Realtor does not know the process and this lack of understanding can hurt the possibility of putting a contract together. So it is very important your Realtor communicates with the buyer’s Realtor to insure the buyers understand there is nothing about a relocation property that will harm their position. The process is just very different, so please make sure you choose a professional with the proper knowledge, training and field experience. A Seller’s relocation package generally consist of all closing cost paid, including Realtors commissions, moving company, and usually two home buying trips up to seven days each. Also there are different levels to the benefit package and it all stems from your employment level. Make sure you select the very best possible relocation realtor, ask questions. Make sure you understand, from your relocation counselor, all of your benefits.
Buyers, if you are being relocated with company benefits please check with your counselor because you want to make sure you use the benefits properly and please do not get ahead of yourself. The two prime mistakes buyers make when going on a house hunting trip is not getting pre-qualified with a mortgage person and if they have a buy-out on their home how long do they have to market the home before being offered a buy-out price. Most relocation companies do not make it clear that a buy-out on a home is not at market value but at a reduced rate, typically about 10% below market value. Two appraisers are hired to evaluate the home for a buy-out appraisal. Most buyers go into the home buying process assuming they will be offered a market value price. When the appraisals are complete the buyer finds him/herself short of money for the down payment. The primary way to insure you understand the process, make sure you select a Realtor that has years of experience handling these situation and a Realtor that will know what questions you should be asking your employer and/or relocation person.
Relocation does not have to be a stressful process. When working with a professional Realtor who has the training and experience that a relocation specialist should have your stress level should be low. For more information about the relocation process please contact us at 800-515-2134 or TheVogels@TheVogelGroup
Investors For Phoenix, AZ Real EstateOK, the election is over and we will have a liberal democrat as president. Don’t fear there is always something you can do to protect your money, your investments, your 401k and you IRA. That something is get out of the volatile stock market and get into a market that has hit or is near the bottom and will soon be on the way back up: REAL ESTATE. I know what your thinking: Real estate is so bad they had to pass legislation to bail it out, WRONG. They passed legislation to bail out the lenders who made bad loans to people who had no business in the market to begin with. The fact is the real estate market is still hurting but the price plunge seems to have slowed and even stopped in some areas. Real estate prices are poised to start their log journey back up. Arizona in particular has a very strong job market and the weather makes it a very desirable place to live. Because of the stricter lender requirements more people will need to rent until their credit is improved, this is a strong reason to look to homes for a longer term investment with a potential positive cash flow. If you are an investor, someone in need of a 1031 exchange, have a 401K to reinvest or an IRA that is maturing, do yourself a favor and look into the real estate market for your long term investment needs. Real estate and housing in particular is the one thing the government doesn’t have a direct impact on, so it is harder (not impossible) for them to screw it up. We, at The Vogel Group, are the experts in the metro Phoenix real estate market and we are here to help with all of your real estate investment needs.
We recently come upon a new web site that is a great tool for anyone looking into the real estate investment market in the Metro Phoenix area. This site is free to use and nobody will bother you unless you ask for a Realtor’s help or expertise. The site is Investor Loft. Go to the link and give it a try, it is easy to use and has a great financial page for each property to show the properties investment potential. Investor Loft is currently in Arizona and Colorado with future expansion into other states coming soon.Well that’s about all I have for now but if you have any questions on this new site or any other real estate needs please call us (800-515-2134) or go to our web site: www.TheVogelGroup.com. Bob Vogel
The Vogel Group
TheVogels@TheVogelGroup.com
• 3,610 sq. ft., 3 bath, 4 bdrm 2 story - 
MLS® $475,000 - Spectacular Power Ranch
Power Ranch, Gilbert - Highly sought after floor plan and builder (Meritage) in prestigious Power Ranch. When you walk in you'll see the difference is quality. Dramatic 25 foot vaulted ceilings, soft neutral tone paint throughout. Family room has cozy gas fireplace and built-in entertainment center. Gourmet kitchen with 42' cherry cabinets, granite counters,double oven. The large master is downstairs with a wonderful view of the pool & spa. The other 3 bedrooms are upstairs along with a huge bonus room with an exit out to the large balcony. There is also a loft area with a built-in tech center. Out back you'll find an oasis in the desert with a sparkling salt water pool and spa,grotto waterfall, gas fire pit, full length covered patio and nice size grassy area. The garage has extensive built in storage cabinets.
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For the last two weeks we have been hearing about the “Credit Crisis” and how it is difficult for even the best borrowers to get credit. Fortunately that is a false statement where mortgages are concerned.
Here is a condensed version of what the credit crisis or crunch really is. Banks and other financial institutions are not lending to each other. Why? Basically because they do not trust the other will be around long enough to pay the debt back, this is evident in the LIBOR rate which is the rate banks use when lending to each other as well as the starting point to many Adjustable Rate Mortgages. Banks are so leery to lend to each other that the LIBOR has raised dramatically to historic highs.
“The cost of overnight borrowing in dollars rose Monday, with the London interbank offered rate, or Libor, jumping to 2.36875% from 1.99625% Friday, according to the British Bankers Association”
Market Watch October 6, 2008
If you listen to the news or read the paper you will find politicians and financial specialist talking about the deepening burden of reduced lending. They will always quote commercial paper, car loans, as well as student loans but rarely if ever mention a mortgage. The reason is mortgages today that follow more common sense lending standards have a place in the secondary market. Today most loans are packaged and sold after closing to Fannie Mae, Freddie Mac, or Ginnie Mae. When lenders know they can sell these loans in the secondary market they have reduced their risk as well as freed up more funds to loan back out. This can not be said for other types of loans which the financial institution must now carry on their books which reduce the amount of money they have available to lend. (There is more involved in the process as well as liquidity requirements but as a condensed view it’s fine.)
But what does this really mean to you when getting a mortgage? As far as mortgages are concerned money is available, and available in abundance. What has changed, are the types of mortgages allowed and the elimination of the lenient credit guidelines. The days of getting a home mortgage just by proving you had a pulse is long over but mortgage loans for those with the actual ability to repay the mortgage will have little difficulty in finding a mortgage.
To take advantage of the many deals available to home buyers today you will need to realize what lender are actually looking for.
The most important thing right now to a lender is your ability to repay the loan. This may sound funny but this concept had been lost in the shuffle over the last few years. Lenders will now concentrate on your credit as a way of determining your future spending and debt handling ability by your past performance. Today you will also need to have a down payment ranging from 3% to 10% depending on the type of mortgage you will be applying for. During the housing boom down payments virtually disappeared with the implementation of 100% mortgages but lenders have found that borrowers with little personal investment into a home have far less incentive to pay their mortgages in difficult times. Finally, and in my opinion one of the most important factors is the borrowers debt to income ratio. This ratio is the difference between what your gross monthly income is versus your monthly reoccurring debt. During the days of lax lending policies it was not uncommon to have loans approved with 60% of the borrowers before tax income being used for to pay the mortgage and other reoccurring debt. A certain recipe for disaster which is one of the many reasons we are in this crisis to begin with.
A more reasonable level of debt to income should be approximately 38% of your monthly gross income though I am still seeing mortgage approvals at levels much higher but I would caution against confusing approvability versus affordability.
So, is there really a credit crisis when it comes to a mortgage? If you believe we need to go back to exotic lending and mortgage products available even to those who cannot possibly repay the debt, then yes we are in a crisis. However, if you are looking for a mortgage to purchase a home that you can actually afford to live in, raise a family, or retire, then there is more than enough credit available if you qualify with the traditional lending guidelines.
Clearpoint Mortgage Inc.
Larry Jacobson, President
Phone: 480-636-7068
Mobile: 480-330-0657
E-Mail: Larry@ClearpointMortgage.net
Web: www.clearpointmortgage.net
With the passage of the “Housing and Economic Recovery Act of 2008” you may be entitled to a tax credit of 10% of your purchase price up to a maximum of $7,500.
Before you go spending this windfall let’s take a look and see how this credit works.
How it works (CNN.com Aug. 19, 2008)
The credit is good for homes closed on after April 9, 2008 and before July 1, 2009, and can be taken on taxes filed during 2008 or 2009. Even buyers, who bought a home before the bill passed, but after April 9, can claim the credit.
Unlike tax deductions, which only offset taxes by lowering taxable income, the tax credit is a straight dollar-for-dollar deduction of your tax bill. So a buyer who would ordinarily pay $8,000 in taxes would pay just $500.
It's also "refundable," which means if a buyer's taxes are less than $7,500, the government will send them a check for the difference. For example, if a couple's income generates a tax bill of $5,000, the government will refund all of that plus $2,500.
Buyers must start paying back the loan within two years, at a rate of no more than $500 a year for 15 years. When the home is sold, any outstanding balance will be repaid from the profit; if it's sold at a loss and the difference will be forgiven.
Eligible Property | Any single‐family residence (including condos, co‐ops) that will be used as a principal residence. |
Refundable | Yes. Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year. |
Income Limit | Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000, respectively). |
First‐time Homebuyer Only | Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase. |
Recapture | Yes. Portion (6.67 % of credit) to be repaid each year for 15 years. If home sold before 15 years, then remainder of credit recaptured on sale. |
Impact on District of Columbia Homebuyer Credit | DC credit not available if purchaser uses this credit. |
Want your money faster?
Many people see the tax credit as something that will only benefit them after they file their income taxes, however individuals who are planning on purchasing or have already purchased can start seeing savings today by adjusting your current payroll tax withholdings or estimated tax payments right now to account for your anticipated lower tax bill. In addition, if you buy a house in 2009 after filing the 2008 tax return, you can always file an amendment to the 2008 tax return and claim the credit earlier.
How could you not like an interest free loan?
Read the Summary of the “Housing and Economic Recovery Act of 2008"
Clearpoint Mortgage Inc.
Larry Jacobson, President
Phone: 480-636-7068
Mobile: 480-330-0657
E-Mail: Larry@ClearpointMortgage.net
Web: www.clearpointmortgage.net
The National Association of Realtors seasonally adjusted index of pending home sales rose 5.3% from the readings of May 2008. The bad news it was 12% below levels of one year ago. A 5.3% increase is definitely a step in the right direction when all is considered in this uncertain market. NAR predicted a package of housing legislation signed by President Bush recently ($7,500 first time buyer tax credit) will help in the recovery.
Now what does this all mean for the Arizona market? Arizona has been hit hard recently with foreclosures and short sales, which has pushed regular resale’s down. Maricopa County is still one of the fastest growing counties in the nation so the job market is strong and these newcomers will need homes. It is my humble opinion the housing market in most of the Metro Phoenix area has hit bottom and although we won't see much increase soon we will see more buyers sticking their toe back into the home buying water. Another good indicator is that Las Vegas has seen an increase in pending and buyer activity. Historically Phoenix lags behind Las Vegas by a few months in market trends.
So if you’re thinking about buying a home in Scottsdale, Chandler, Tempe, Gilbert or any of the other Metro Phoenix communities don’t be afraid to get out and check out the current bargains and get in on the joy of homeownership (not to mention the tax incentives and future appreciation).
A Realtor® is a licensed real estate professional who is a member of the National Association of Realtors®, The Voice for Real Estate , and subscribes to its strict Code of Ethics and Standards of Practice.
The term Realtor® is a registered collective membership mark that identifies a licensed real estate professional who is a member of NAR.
There are approximately 2.6 million licensed real estate professionals in the United States, but only 1.3 million are members of NAR. NAR membership is composed of residential and commercial Realtors® who are brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry.
There are more than 1,400 local associations and boards and 54 state and territory associations of Realtors®. Members join NAR through their local Realtor® association.
The terms Realtor® and Realtors® are not generic terms. That is, they are NOT synonymous with “real estate agent” and “real estate agents.”
The NAR Code of Ethics obligates Realtors® to be honest with all parties involved in a transaction, whether buyer, seller, or cooperating agent.
The Code requires Realtors® to identify and take steps to eliminate practices which may damage the public or which might discredit or dishonor the real estate profession.
Realtors® must take a refresher training course and pass an examination on the Code of Ethics every four-year cycle. Real estate licensees who join NAR are required to take orientation classes on the Code.
Realtors® build communities.
The role of Realtors® in our communities goes far beyond the real estate transaction process of buying and selling. As local business owners and residents, Realtors® are vested in building healthy and vibrant communities across the country, neighborhood by neighborhood.
Realtors® across the country participate in several NAR programs that improve our communities. The Housing Opportunity Program provides tools and resources for promoting affordable housing at local, state and national levels. The Good Neighbor Awards honor Realtors® who have made an extraordinary commitment to improving the quality of life in their communities through volunteer work.
In the industry’s HOPE Awards (Home Ownership Participation for Everyone), real estate professionals recognize individuals and groups who have made outstanding contributions to increasing minority homeownership.
State and local Realtor® associations also initiate community projects of their own to improve the communities in which their members work and live.
Realtors® add value to the real estate transaction.
NAR’s Public Awareness Campaign, now in its 10th year of outreach to consumers, aims to increase awareness about the value Realtors® add to real estate transactions. This year, the campaign is encouraging consumers to consider real estate as a strong long-term investment and to contact a Realtor® to learn about local real estate conditions with the slogan, “Every market’s different, call a Realtor® today.”
Realtors® handle hundreds, if not thousands, of real estate transactions over the course of their careers, and can counsel and guide sellers through the process. Realtors® have the expertise and experience to help sellers protect their investment and help buyers build theirs.
Realtors® are strong advocates for homeowners and homeownership.
Every year, NAR leads the way on Capitol Hill and in the corridors of Washington to keep homeownership a top national priority.
NAR’s support for the mortgage interest deduction and other federal policies helps keep housing more affordable and makes housing a great investment. Sound housing policies empower home seekers to purchase a home of their own.
Realtors® have access to educational opportunities and training in real estate specialties that are not available to other licensees. In these courses, Realtors® learn to develop skills in guiding clients and customers through the complex real estate transaction process.
NAR offers advanced educational opportunities to its members that allow Realtors® to offer a more diverse array of services with such accredited sub-specialties as buyer’s representation (ABR®), residential real estate expertise (CRS®), and Internet readiness (e-PRO).
Through membership in NAR’s affiliated institutes, societies, and councils, Realtors® stay abreast of the most recent trends in their fields, remain well-informed of industry developments in their specialized areas, and address industry issues more effectively.
• 1,823 sq. ft., 2 bath, 3 bdrm single story
-
MLS®
$220,000
- Priced to sell
Sun Lakes, Maricopa County
-
THE ALAMEDA FLOOR PLAN IS ONE OF THE MOST POPULAR FLOOR PLANS THAT ROBSON BUILT. WITH A GREAT ROOM, THREE BEDROOMS, 2 FULL BATHS, DINNING AREA, A NICE SIZE BREAKFAST NOOK, PLUS A WELL LAYED OUT KITCHEN, THE HOME FLOWS WELL. THE HOME HAS NEWER TILE IN ALL THE RIGHT AREAS. THE OUTSIDE WAS FRESHLY PAINTED TWO YEARS AGO, A NEW A/C TWO YEARS AGO AND THE DISHWASHER WAS REPLACED TWO YEARS AGO. THIS HOME NEEDS A LITTLE TLC WITH CARPET AND PAINT, NOTHING MAJOR. THIS HOME IS PRICED TO BE ABLE TO SPARK IT UP A LITTLE. GOOD AREA, WELL LAYED OUT, VACANT AND CAN CLOSE QUICKLY.
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