Steps to Homeownership

Steps to Homeownership

The following are some simple steps and guidelines to get you started on the road to homeownership. The whole process can sometimes be a stressful and confusing time but with the right agent, the right knowledge and backed with the right information, you can close on your Olympia home easy and as stress free as possible.

1. Know your finances.

Basically you want to know you have a good financial snapshot before sitting down with a lender. Correct any mistakes on your credit report and get a good idea of how much you can afford and always go a little less. You don’t want to
move into a new home and not have a penny to spare to repair, fix up or furnish with.

2. Find a good buyers agent

Having a buyers agent on your side is so vital to the benefit of the buyer I cannot say enough. You need someone on your side throughout the entire process and if a buyer chooses to allow the listing agent to also be the buyers agent, it is hard to be certain who the agent is really working for. Of course the seller came first so the agent really want to sell the property for the seller. But the buyer needs someone looking out for them. It costs NOTHING to buyers to have an agent on your side, protecting your finances, situation and over all legal position in the transaction.

3. Submit and offer and wait for mutual acceptance.

A good buyer’s agent will put together an offer you are happy with and meets your requirements. They will make sure all the details are taken care of and your best interest is taken into account. Once we submit an offer to the sellers we will wait three days at most for a response. They may counter offer in which case you decide whether to accept or counter offer back. Once all parties agree to all the terms in the purchase and sale agreement, a binding contract has taken place. The earnest money will need to be deposited and you move onto inspection.

4. Get a professional inspection.

This is a huge investment and it really pays to know as much as you can about it. If you are not happy with the outcome, you can receive all your deposit back and move on. Or, you can propose options the seller can take to correct any issues.

5. Get homeowners insurance.

This is important as most buyers will be taking out a loan on the home. The bank will need to know their property is insured. Find a company you trust and make sure escrow has all the paperwork and information.

6. Let everyone do their job.

Bugging the escrow company, lenders and sellers throughout the process only slows it down. Make sure you are available for all signings, and provide and documents requested for an on time closing. Closing doesn’t happen when you sign but typically 1-3 days after. Closing means everything has funded and the deed is recorded at the county seat.

The difference between debt snowball and debt avalanche method

The difference between debt snowball and debt avalanche method

If you are suffering because of credit card debt related issues, then you must consider coming out of the situation as soon as possible. It is commonly considered that debt can be eliminated only by consumer credit counseling or debt consolidation or settlement. However, there are other debt elimination methods that you should try first because they are free and easy. Out of these the two most common are the debt snowball and the avalanche method.

What is debt snowball method?

In most cases it is said that you must pay off the highest interest rate debts first. However, as per this method you are to focus more on paying off your low interest rate debts first so that you can generate some momentum. The advantage of starting with the debt that has the lowest rate of interest is that it will be paid off quickly. The money that you were paying towards it can be used to pay the debt that is the next lowest interest rate debt on your list. As you can manage to pay the debts very fast, you feel motivated. Following this method gives you quick wins that keep you motivated towards the goal of paying off your debts. You may loose interest if you do not see results even after you have paid a lot towards the debt with the maximum interest rate and this may demotivate you to such an extent that you stop making all efforts towards debt elimination.

What is the debt avalanche method?

Under this method you are to pay towards the debt with the highest rate of interest. The credit card debt that has the highest rate of interest is the one that is targeted. You pay the minimum payments for all debts but pay more than the minimum towards the debt that has the highest rate of interest. After this debt is paid off you are to focus on the next debt with the highest interest rate. Under this method you are paying a debt that has a high rate of interest so the amount that you pay goes chiefly towards paying the interest with little contributions towards the principal. Thus, the results come much later and the level of motivation is very low.

Which method you opt for depends completely on your debt scenario. If you have debts that are more or less of the same interest rate, then you should opt for the snowball method. On the other hand if you have high interest rate debts as well as low interest rate debts, then you should consider the debt avalanche method.

Foreclosure FAQ

Foreclosure FAQ

1. Do all Foreclosures sell for less than market price?
No – Good deals are out there, but you can never assume that you’re getting a bargain simply because it’s a foreclosed property. Lenders and Banks that own foreclosed properties are usually prevented from accepting offers lower than appraised value, at least during the first several months that a home is on the market.

2. If I bid on a foreclosure auction do I acquire all the previous liens as well?
Yes – Before you bid on a foreclosed property at auction, make sure you know what debts go along with it. Conduct a title search to determine if any liens or fees are connected to the property. You may discover that you’d be taking on the previous owner’s s first mortgages, second mortgages or additional claims against the property and/or any tax liens.

3. Do foreclosed homes affect the other homes in the neighborhood?
Yes – Foreclosed properties can hurt the value of nearby properties and even have a negative effect on local crime rates, research shows. Even one foreclosure can decrease the value of the other homes within 1/8-mile by 1.44 percent. The goal is not getting into the mess in the first place.

4. Can I transfer title to someone else and avoid foreclosure?
No – This is a foreclosure rescue scam. As the number of foreclosures grows, so does foreclosure fraud. Home owners who are desperate to avoid foreclosure may be convinced by unscrupulous companies that promise “fast cash” and “equity funding.” As part of the agreement, the company says the owners can continue to live in the property and pay rent until they have the financial means to buy the home back from the company. However, once the company has the title, it sells the home to a third party, leaving the borrowers without a home or home equity.

5. Can I purchase a HUD home as long as I qualify?
Yes – Anyone who has the money or can qualify for the necessary amount of mortgage financing can purchase a HUD Home. HUD acquires its properties through the foreclosure of mortgages insured by the Federal Housing Administration. Many of these homes are sold “as is” and you want to be fully aware of what you are getting into before buying.

6. If I miss one payment will I go into foreclosure?
No – There typically needs to be at least 3 missed payments for something drastic to happen. Lenders are often willing to work out a solution other than foreclosure. Home owners should notify their lenders as soon as they know they won’t be able to make a mortgage payment.

7. Do lenders benefit at all when someone forecloses?
No – Foreclosures are costly and time consuming for lenders, too. It’s simply not in their best interest for a home owner to default on payments or lose a home to foreclosure. In fact, lenders would normally favor a short sale to a foreclosure because the bank’s financial loss will likely be far less. In a short sale, the lender often forgives some or all of the home owners’ debt that remains after the property is sold.

8. Once the bank takes back control of the property, am I out of financial burdens?
No – The IRS can still come back to bite you. Former home owners may still have to pay a tax on a portion of their mortgage loan after a foreclosure because the sale is technically considered income. NAR has been actively trying to eliminate this phantom tax since the mid-1990s. NAR argues that it’s unfair to impose tax on a phantom income when the seller lost the home to foreclosure and most likely doesn’t have money to pay the tax.

Basics to remember before you take out a home improvement loan

Basics to remember before you take out a home improvement loan

If you have to make any improvements to your home such as building a new floor or constructing a garden, you can take out a home improvement loan. This will help you make the required changes that you want to make in your home and build the equity in the process. There are several types of home improvement loans that can be taken out as personal loans (unsecured loans) or may even be taken out as second mortgage (home equity loans or line of credit). If you take out a secured loan, you have to put the equity built on your house as the collateral. You can also save on your home improvement loans by bartering for it directly and indirectly too.

Ways you can trade and barter for home improvements in your house

You may not have a good credit report to take out a home improvement loan. Then taking out a home loan won’t be that a good idea. So, if you have a bad credit, you can go for barter or trade system to get construction and improvements done in your house. Take a look at the ways you can barter or trade for improvements on your house:

  1. Direct bartering

This is the most common way to trade with someone for making improvements on your house. You can ask the person to make the required construction and improvements on your house for an exchange in computers, some rare DVD collections or other things. The things you barter depends upon the service the person is proving you. If the construction job is a huge one, you may have to barter or trade you car or anything huge. So, before you ask a favor of someone, you must think of the things you can trade to get your job done.

  1. Indirect bartering

This sort of bartering is used by many of the companies. This is done by including a third party into it so that you don’t have to give anything directly to the person doing constructions on your house. In this you barter with services and things by involving a third party. This usually is seen in very close neighborhood or in families.

Apart from these two ways of bartering, you can also help the person making constructions on your house so that the work gets distributed. This is a type of direct bartering. If you can improve your credit score, you can take out a home improvement loan to go for the required home improvements.

There are also neighbourhood-to-neighbourhood loans for making improvements on your house. This is possible if people know each other in the locality. Get help of these options so that you can build equity on your house by making the important constructions and improvements.

Hard Money Commercial Loan – How They Help Investors?

Hard Money Commercial Loan – How They Help Investors?

Real Estate Investment has been rising since the start of the housing crisis, thanks to the continued decline in home prices. But given that all buyers have the money to start, many have opted for a real estate finance hard money private loan companies paid by the property itself. With real estate hard money commercial loan to purchase a property, even with bad credit and even with financial need. If you are new to real estate investment, here are some reasons why a hard money commercial loan is so significant:

Easy Approval

Hard money loans are also a popular choice for home buyers taking the first loan, or have bad credit history. This will usually keep them qualify for conventional loans, or at least get the ideal rate. Hard money loan is available to all who have property as collateral. If you’ve just completed a foreclosure, short sale, bankruptcy, or anything that has negatively affected the credit, real estate hard money loan is a good way to give your house.

Worry-free financing

In adopting hard money loans can take as little as three days. This is because lenders are able to jump over the typical credit inquiries conventional loans. Because all they need is proof of ownership of property and value, there is no need for paperwork that tends to add weeks or months waiting time for most bank loans. Thus, companies often take home hard money loan to get projects started quickly gives them temporary financing for more than long-term loans are underway.

Credit restoration

Most hard money loans are short term, one to two years on average. This makes them attractive to borrowers who want to borrow money just to rebuild their reputation after a negative credit event. Taking a home loan and hard money to repay on time, you can add important points to your credit score and qualify for better loan later.

Flexible terms

Since the hard work in private money lenders, do not require follow-up too much space, or professional standards. This will help them adapt to the unusual requirements, such as their homes with unique designs, or commercial real estate property values are higher than what most banks are willing to lend. When a real estate hard money loan, borrowers are free to continue their projects as they wish, provided they meet the standards of individual lenders.

Home Equity Consolidation: I Finally Paid Off All My Debt!

Home Equity Consolidation: I Finally Paid Off All My Debt!

I’ve spent years working with people over the course of my banking career that get themselves in trouble with debt and creditors. Life is motoring along at a nice pace until something traumatic happens. For one reason or another, their monthly expenses exceed their monthly income which becomes unsustainable.

Then it happens. They have a brilliant flash of genius. As if they’ve never even considered it, they decide to “Do” a home equity loan to pay off all their debts. They figure since they’ve been able to grow the equity in their home, why not leverage it to pay off all of their debts.

Here are 5 of the mistakes I’ve seen over the last 15 years…

1. The Goal is to PAY OFF Debt – Beware of that statement. When consolidating debt through the use of home equity, you are in fact “paying off” a set of creditors. That is true; however, you’re also increasing your loan on your house. This is no different than using one credit card to pay the balance on another. Oh, it feels great at first because of the huge savings on the monthly budget. Cash Flow relief happens and you feel like a genius. Here’s the reality. You are only RESTRUCTURING your debt! You still owe it, now at a much higher cost usually over 15 – 30 years.

2. No After Pay Off Plan – Too many clients think life can go back to the norm once they have their monthly cash flow relief. When I’ve consolidated my client’s debts using a home loan, I give them all a plan. The people who have a plan do really well accelerating the payoff on their homes or they increase their savings for other goals. The ones without a plan are usually in a worse position with more debt inside of 12 months. These folks are addicted to consuming their lives. Debt provides a way to do just that.

3. They Believe Home Prices Will Always Rise – Historically, it is true, home values do rise over long periods of time. Unfortunately, our country is in one of the worst Equity Blood Baths in history. Home Values across the country have nose dived for the last 3 years. My personal home lost over $60,000 in value the first year. It will take a long time to recover from that loss. Because of the short term spike in Property Values from 2003 – 2007, too many people have a false sense of security in their values. This property value correction will take several years to correct itself, so don’t hold your breath there.

4. Buying Decisions Are Based on Monthly Payments – This is a huge mistake I see. Too many people get trapped thinking if they can afford the payment, they can satisfy their want in the moment. 90% of the things we buy, we can live without. Marketing firms earn HUGE dollars every year getting us to buy their products. They want us to see that $499 per month can buy luxury and elegance in that new $25,000 car. You deserve a bigger, nicer home than the one you have now. After all, they say a bigger home creates a happier family. These are all Emotionally driven and Psychologically Engineered buying decisions. The next time you want a car, make sure you have a minimum of 50% down payment and 100% if possible. You work hard for your dollars. Don’t sell yourself into slavery with the creditors.

5. Got Plenty of Time to Pay it Off Again – Our society has taught us all about the debt cycle, but we don’t know we’re in it. Imagine, you’re out of college (if you went) with student loans and some credit card debt (80% of college graduates have in excess of $10,000 in debt). You get your first real paying job. Now with all this extra income, you decide to buy a new car. Somewhere around 26 you realize you want to pay off all this debt, so you tighten your belt and pay most of it off. Over the next 5 years you get married and have your first child. You need a house and a bigger car. A few more credit cards, student loans, a house payment. But then in your early 30’s you and your wife decide it’s important to pay off the debt, so you spend the next 5 years paying things down. Then in your late 30’s you’ve got 2 more kids and space is getting cramped. Time to upgrade to a bigger house and bigger car again. In your early 40’s you realize you don’t have any retirement savings, but your debt load is too high, so you take out an Equity loan to consolidate. It frees up some monthly cash to start the savings plan, but the kids want to go to college so you take out more debt to send them to school. You get the picture. At some point you’ve got to realize that Time is the one precious thing that will work for you or against you. You cannot get it back.

Home Equity is a great source of money to use if you are in a situation that requires drastic measures to get out of. If you so choose to go down this path and restructure your debt, make sure you’ve got a plan on what After Consolidation life will look like or you’ll end up in a worse position.

Bio: Joshua Christensen is committed to Faith, Integrity, Trustworthiness, Abundance & Boldness. Living life on purpose, he is a devoted Christian, Father and Friend. He is a Small business Owner running his own Southwest Funding Branch, a speaker, and a published author to “Consider the Ant: 3 Keys to Biblical Prosperity.”

Debt consolidation

Debt consolidation

In the last couple of years everyone has been faced with financial problems. Some problems have been relatively minor and easy to deal with. However there are others

who financial problems are such that it could have led to them losing their home. If you find yourself in a situation with regards to your finances you may find that the only way to deal with them is through debt consolidation.

With this you are able to bring all the debts you currently have together so instead of making several payments to different creditors you make one. However for you to be able to take up such a facility the lender offer you the debt consolidation loan will require you to provide some form of collateral as security. In most cases they will ask that you place your home as collateral however by doing this the amount of interest you are required to pay on such a loan will be less.

So if you find yourself with mounting debts and don’t seem to be able to find a solution to your problem why should you be considering taking out a debt consolidation loan.

Below are just some of the advantages of doing so.

1. The amount you repay on this loan will be much lower than if you were continuing to try and pay off all the debts as they currently stand. As a result you will have a little more money that you can use for other purposes such as repairs to your home.

2. Normally it is the lender who determines when repayments are to be made, however when it comes to this kind of loan you are the one who decided when you make
the monthly repayments.

3. As you will now being unifying all your monthly payments into just one single payment so you will find that you are actually able to manage your payment much more
easily. Plus it also enables you to manage your finances much more effectively.

4. The rate of interest that you are paying on one loan is far less than you would pay on all of the others. If you continue to make payments on every debt that you currently have how much interest you pay on these can vary greatly from being 0% to as much as 10%. By taking out a debt consolidation loan you could actually be reducing the amount you actually have to pay back by as much as 60%.

5. Your credit rating will begin to improve and as a result of this it will actually help should you find yourself in a situation where you need to take out another loan to cover it.

6. Finally when it comes to a debt consolidation loan you will not be charged if you do not pay the instalments on the date agreed.

UK secured loans – Their benefits and ways to obtain despite poor credit

UK secured loans – Their benefits and ways to obtain despite poor credit

In the UK, secured loans provide a great option for most homeowners to meet various financial needs. They can be used to consolidate unsecured loans and also for home improvement purposes. Secured loans are an extremely convenient way of getting loans that are large sums of money i.e. above £15,000 as unsecured loans do not usually cater for loan sizes higher than that.

Secured loans are based on the concept of using your property as collateral and receiving money in lieu of it. This is the reason why we always see financial experts advising most people to think long and hard before taking out a secured loan against their property. Your inability to repay the secured loan on time may lead to a foreclosure or a repossession of your property. Read on to know more about secured loans.

Update: You may have been mis sold PPI on your loan. You can use this handy ppi calculator by Have I Got PPI UK to find out how much you could be owed and then decide whether to make a claim or not.

UK secured loans – Their glowing benefits

If you’re sure about your repayment ability, taking out a secured loan can be of benefit to you in more than one way. They offer certain advantages when compared to unsecured loans. Here are some such benefits that can be taken into account before taking out a secured loan in the UK.

  • Offers you ability to obtain a large amount of cash: Through a secured loan, you can easily obtain a large amount of cash. Since the lender uses your home as collateral, this kind of lending is considered as safe lending and hence the lenders never hesitate to lend the loan to the borrower.
  • Relatively lower interest rate than unsecured loans: The interest rate on the secured loan is comparatively lower than that you get on unsecured loans. As the lender is secured through the collateral, you’re considered as a low risk borrower. This lowers the interest rates charged on such loans.
  • Longer repayment period: The repayment period of secured loans is longer as compared to unsecured loans. Since the amount borrowed is usually a huge amount, the lenders keep a long repayment period of 30 or 15 years so that the borrower does not struggle while making the monthly repayments.
  • Can be used for various purposes: A secured loan in the UK can be used for various financial purposes. You can use the proceeds for consolidating your unsecured dues by taking out a home equity loan or you can even use the money in paying for your home improvements.

UK secured loans – How to get one with poor credit score

If you’re a homeowner with good credit score, it is most likely that you’ll be able to get a secured loan with ease. But if you have a poor credit score, you need to keep certain things in mind before getting such loan. Check them out.

  • Go for credit repair: The first and foremost step that must be taken before getting a bad credit debt consolidation loan is to go for credit repair. Order your credit reports and review them to identify any small errors in your credit report. Dispute any errors that you find and make your report error-free.
  • Look for bad credit lenders: There are specific lenders who assist people in getting bad credit secured loans. It is your duty to look for such lenders and make sure you settle with the one that offers you the best and the most competitive rate on your bad credit loan.
  • Contact a loan broker: Loan brokers usually have adept knowledge about all the lenders in the market and therefore, you must consult them for getting expert help. They will help you throughout the process of getting a secured loan even with a poor credit score.

The application process for secured loans is quite simple and easy. If you’re in sudden need of a large amount of cash, don’t hesitate to contact your nearest broker and get yourself a secured loan so that you can meet your financial needs.

How bankruptcy can help you in avoiding foreclosure

How bankruptcy can help you in avoiding foreclosure

When you are having monetary problems, you be having problems in aiming your debt payments too. Now, if yours is a serious problem and if you think that you can’t even make even the minimum payments on your debts, it is better to go for bankruptcy. Bankruptcy helps you to put a stop on the debt amount from increasing and also discharges some part of your debts. Other than this, bankruptcy also helps you to avoid foreclosure.

How to avoid foreclosure

Your home can get foreclosed if you fail to make the on-time payments against your home loan. The lender might take away your home and sell it off to get back his money. However, if you file bankruptcy either Chapter 7 or Chapter 13, you may be able to save your home. Chapter 7 bankruptcy delays the foreclosure process and with Chapter 13 bankruptcy you may be able to totally avoid foreclosure.

When you file bankruptcy, irrespective of the chapter under which you have filed, a stay order comes into effect. As a result of this, no creditors can sue you for non-payment of bills. Neither can any lender foreclosure your property nor take away any of your assets because of your nonpayment of the bills. All kinds of collection activities are bound to cease after you file bankruptcy. The lender can however file a motion to lift the stay. However, still you may get at least two month before your house gets sold off by your lender.

However, in case a foreclosure notice had been filed before your filing of bankruptcy, the stay order might not work. This actually depends on the state laws. Some state allows the lender to foreclosure the property in such a condition while some states do not allow the lender to go on with the foreclosure process. So, it is important for you to know your state laws on bankruptcy and foreclosure before filing bankruptcy.

Especially in case of chapter 13 bankruptcy, there is no fear of your home getting foreclosed. Chapter 13 is like the repayment plan which is approved by the state. You are required to make payments against your debts (secured or unsecured) as per the court approved repayment plan. If you are able to finish off the debt payments as per the plan throughout the repayment term, without once faltering, the debt left after it gets discharged.

Debt Consolidation for Homeowners

Debt Consolidation for Homeowners

If you are looking for debt consolidation and you are a homeowner then you should know that you do have options that can see you pay off debt . You need to consider taking home equity loan or cash-out refinance. Let us have a look at each of them.

1. Home equity loan : In simple terms a home equity loan is a loan that you get by simply pledging your house as collateral. This type of loan is great for a person who wants to get a large sum of money. In fact, you ought to know that lenders love this form of debts because they have sure security, and they also know that it is harder for you to mess up your payment plans when you have your home as collateral.

Advantages of using home equity loan

With home equity loans, you can get to borrow large sums of money. More so, you can also qualify for a loan even when you have bad credit records. It is true that some payments on this form of loans may be tax deductible.

Why you need home equity loans

People need loans for different reasons; however, taking a home equity loan should be done with caution. You need to use this method if you want to secure huge loans for paying your children’s fees or when you want to venture into a business that will earn you high returns than the interest rates that you will incur with the loan. More so, you need to make sure that you really need the loan to avoid instances where you can end up losing your home as a result of not paying the loan in time. The second form of consolidating a debt is by taking cash-out refinance.

2. Cash-out refinance : You can decide to also pay off debt using this method. With refinancing, you might decide to take cash-out in addition to the existing mortgage balance that you have, which means that the new mortgage balance will be your current balance plus the desired cash-out amount. In layman’s language this means that with the undertaking you stand to increase both the size of your mortgage and your mortgage loan in return for cash.

What you need to know about cash-out refinance

Know that, most lenders will not allow you to take cash-out before the end of the first 12 months. Lenders enacted this form of policy to make sure that borrowers do not take home with zero money down and quickly refinance for cash-out.

Finally, whatever the method that you decide to use to pay off debt , you need to read the pros and cons of each, and also seek financial advice from the financial experts. Some problems you may easily solve by just using your credit card.