Learn What Real Estate Investing Is All About

Real estate investments can get you on the path to financial freedom. However, to do well, you need to understand certain investment concepts. Don’t fall victim to bad real estate deals, keep reading for great tips that will hopefully make your investments a winner.

Reputation is important when you are stepping into this arena. Abide by what you say, and do not lie to possible clients. This makes your reputation increase.

Remember that reputation is key in this realm of business. Be impeccable with your word, and build a reputation for being trustworthy. This gives you credibility with clients and helps you gain their loyalty.

There are to essential rules to making an investment in an industrial or retail property. The first is the cost of the land. Next you never want to pay more than it is worth. Use an independent inspector to come in and value the property, and have that person tell you what is expected in any type of rental. You need to be sure both numbers are good before you buy it.

Location is a vital aspect of real estate investing. Many of the other factors, such as property condition can be changed. Properties that are in areas that are depreciating fast will generally make a bad investment choice. Taking your time to research the area the house is located in can help your investment to be successful.

Property management companies are often a good investment. You might spend a bit of money on the management company; however, it is money well spent that can increase your profits. The company that does the property management will screen potential renters and deal with costly repairs. This frees up your time to search for more investment options.

Don’t automatically assume that the value of a property is going to go up. This is a dangerous assumption for the market in general, much less any individual piece of property. You want to instead focus on those properties that can provide you with a cash flow. You can boost your income with any property value that is appreciated.

When you are buying real estate investment properties, have someone who is handy at fixing things to help you out. If you don’t, you’ll end up spending a fortune on various home repair specialists. A great handyman will always be available for you, even during an emergency.

Don’t do any digging around a property you haven’t closed on. There are legalities involved with digging in some areas, and you also want to avoid property damages.

Prior to investing in a property, learn about the area. The location as well as zoning laws is essential to success. Talk to as many neighbors as you can so you can get a feel for the neighborhood and if it will be possible to rent it quickly.

You never want your investments in real estate to start draining your liquid cash reserve. Investing in real estate means that you won’t be able to access a lot of money for a while, and the returns can stretch for many years. You don’t want to mess up your daily life by tying up the wrong funds.

Seek out help from experienced real estate professionals. You want to talk to someone in the local real estate industry that is familiar with a property before you make a bid. For example, talk with someone who appraises real estate or is an agent. That way, you will be sure to make an informed choice.

Try signing up for a professional listing service that does foreclosures so that you can find the best available deals when they appear. You can let the service keep you informed instead of constantly checking with agents, lenders, and courts. Usually, this is where you get the most up-to-date properties.

If you’re trying to invest in a few different properties in the future, be sure they’re all in a good area. This will help you by reducing your time and gas expenses as you travel between the different properties. This also helps you become a pro in real estate when it comes to that specific area.

Avoid over-leveraging yourself when moving on to a new real estate deal. Be sure to make wise decisions that don’t consume all of your investment capital. In this way, you can be prepared for the unexpected. Without the necessary capital, you can get burned.

Determine which types of buildings are easily maintained. When you invest in real estate, it is more than just buying property. You need to consider just how you are going to keep the place up so that you can resell it in the future. One-story homes are easier to handle than multi-family properties. Make sure your project is appropriately sized for your skills.

Learn the lingo used in the market. It is important to sound experienced in the market. If a seller senses you’re a novice, he may try and take advantage of you. Use the lingo you learn, as well as your knowledge, to give you an advantage. The more professional you sound, the bigger leg up you’ll have in negotiations.

Remember that making an investment in real estate will be a big responsibility. Though you should make investments when you are younger, it is important that you are stable, as well. Put down roots within your community, save money and form relationships. There simply is not a better way to make the most of your real estate venture.

Avoid buying a fixer upper. Although you may save on the purchase price, you will probably spend more fixing it up than the price of one that doesn’t need repairs. Search for properties where tenants can move in right away, rather than one that needs extensive repairs. The best thing to do would be to find a property to rent that has good renters already.

Remember that investing and managing property will require time in addition to money. Many people get into real estate thinking only of the money, but that just barely touches the surface. Taking care of your investments requires a great deal of both time and energy, and you must prepare yourself to work hard on a regular basis.

Your education in real estate investments is going to be an expense either now or in the future. It will take time, but will be extremely beneficial for your career. The worse way to learn is to learn from costly future mistakes. Learn all the things you can now in order to make money in real estate.

In conclusion, lots of folks have been investing in real estate in order to gain some extra income. In order for an investment to succeed, it is important to understand the basics pertaining to it. Apply the knowledge you learned from this article when starting your real estate adventure.…

Helpful Advice For Investing In Real Estate

Real estate investments can greatly diversify your investment portfolio. When you are investing in land or property, your exposure to sectors outside of the stock market expands. But, real estate investing is not the same as equities or debts. Keep reading so you know how to invest the right way in real estate.

Before investing in any form of real estate, make sure you analyze the market and go out and do some research. Select a location, pick out a number of properties, and then go inspect and compare them. Know things such as current prices, cost of repairs and what you can expect to get in rent. This will help you figure out which deals are the best.

Find people who know what they are doing and talk to them. Many, many people have an interest in investing in real estate. You may even find a group in your area that focuses on making money in real estate. Should there be a shortage in your area, look to online forums for other investors. Speak with people that are interested in this topic.

When you negotiate, do more listening and less talking. You’ll be amazed at how often people negotiate against themselves simply by letting them do all the talking. You can also get the price you desire.

You must think about reputation when it comes to stepping foot into the real estate market. Therefore, you should always abide by your word and never lie to a potential client. This gives you credibility with clients and helps you gain their loyalty.

Picking good, well-known areas is usually a smart way to go. This will maximize the value that you get when selling. Also, look for easily maintained properties.

Consider the amount of time you can realistically devote to managing property. It can be time consuming to deal with tenants. Get a management company to do the dirty work for you.

Always take a look at an overall community before investing in a specific property. Neighborhoods where people want to live tend to hold or even rise in value over time, while depressed areas might cost you money or yield a lower return. Where a property is will help you to determine what it’s worth.

For certain it can prove beneficial diversifying your real estate portfolio by investing in different areas and even countries, but you also want to capitalize on local real estate that you’re familiar with as well. You could find some good real estate investments near you, and you already know the area well. You may find even better deals for getting started.

Once you have a property and it needs improvements, do not dig unless you have called the proper authorities about what lines are buried within. In some places, it is illegal to do any kind of digging and you also don’t want to damage the property.

Diversifying in different areas is good, but start with nearby locations. Since you know your area well, it is best to look for opportunities there. Even if you choose to branch out later, that is the best way to start.

Real estate investors go through both success and failures. Don’t let the low points discourage you. Success will be yours, just stay persistent. Continue to learn and give it your best effort, and you will succeed.

You don’t want to take the approach of just buying more properties to increase your number. This is a rookie mistake. Do some careful investigation before making an investment. This helps keep your investment portfolio solid.

It is easier to invest in more than one property if they are all located in the same area. This will allow you to avoid major expenses in gas or time as you travel to your properties. You will also enhance your expertise in that region.

Don’t purchase a fixer uppper. What seems like a bargain could actually end up sucking up all your capital to pay for endless repairs. Search for properties where tenants can move in right away, rather than one that needs extensive repairs. The best thing to do would be to find a property to rent that has good renters already.

Try to eliminate emotion while you are negotiating. There’s no need to get emotional about your investments. Separate your emotions from your finances so you don’t make rash decisions. You can only profit by applying this advice.

Be ready to sacrifice things. On top of money, investing in the real estate market eats up a ton of your time. Treat your interest in real estate as a real job and invest your time into learning more about it. You need to consider the fact that you can pick them up after you have focused on your goals.

When searching for a realtor with the most experience, avoid novices. This is an investment opportunity you are looking at and those with little time on the job may not find what you are seeking. The only way you find exactly what you desire is by using one with experience. At least try hiring an experienced firm.

Be wary of investments that seem super high or super low in price. Large initial investments usually mean very low profits. And a price that’s too low can signify hidden issues. It may cost you a ton just to get it to a good selling place. Your best bet is to look for moderately priced, solid properties that are neither too fancy nor too run down.

It is important to run a credit and background check on each potential tenant. Tenants who are not trustworthy can damage your property and decrease your property value. Although a background check does not guarantee anything, it can definitely better your odds when trying to find a quality tenant.

Understand the market lingo. This will help you know what to say to the seller. If a seller thinks you don’t know anything, they can try to get over on you. It is smart to use lingo and know-how to gain leverage. You’ll be at an advantage if you sound professional.

While reality television shows make real estate investment seem like a rush, there is actually quite a bit of science to it. Stick to the facts, applying the advice you learned here. Make wise decisions so you can make money with the real estate market.…

The Basics Of Real Estate Investing For Novices And Experts

Lots of people have become rich through real estate investments. However, some folks only want to dabble. If that sounds like you, read on to benefit from the information presented here.

Make sure that you devote a lot of time to your investment. Problems with tenants may consume a great deal of time for you. If you feel as if you don’t have the time needed, consider hiring a property management company.

Always get an inspection before buying a house. Certain sellers offer to provide inspections, but they may hire someone who is not impartial. It is best to get an independent person to come and inspect the property to protect your interests.

Keep with a specific niche that you like. If you find a market that you like, it can actually help you become successful. It is very important that you stay with what works and what you are good at, and that is the best way to generate lots of success for you.

When looking to purchase an investment property, make sure the rent you will be collecting will cover most, if not all your monthly mortgage payment. This will get you started in a good position. You must not be in a position in which your own rent payment is dependent upon your renter’s rent payment.

Do not neglect to consider the various sunk costs that increase the amount you have to spend on a property. You have to pay lawyers, closing costs, costs of home staging and a host of other expenses. When you are calculating your margins, make certain you add all your costs to the line item list you are making.

When you are buying real estate investment properties, have someone who is handy at fixing things to help you out. If not, you may find you cash going to unnecessary repair expenses. This handyman can also be on call for problems after hours that the new tenants experience.

Keep proper financial records. It can be all too easy to overlook your books, especially if you are just getting started. You will need to worry about a lot. It is important to have good bookkeeping practices. Getting into the habit of proper bookkeeping will make you more organized and save you from future problems that may occur.

Learn about the neighborhood and surrounding areas before you decide to invest in its real estate. Location is one of the most integral factors. Talk with neighbors before putting in an offer.

Real estate investors go through both success and failures. Do not allow the bad times to bring you down. Persistence is key to finding success in the real estate market. Continue trying and learning and you will make money.

Do not buy just to increase your number of properties. All that occurs when this is done, unless you are filthy rich and buying prime properties, is you risk values dropping on some as you cannot devote the time necessary to maintaining it, or a neighborhood may economically collapse. Do some careful investigation before making an investment. This helps keep your investment portfolio solid.

Learn about any neighborhood you are interested in investing in. Location is everything when it comes to investment properties and it is even more important to know the zoning laws and whether or not the property has any special attributes. Speak to potential neighbors to understand the rental potential.

Location truly is the most important factor when buying real estate. A great house is not worth as much in a bad neighborhood. Think about the potential of the place and the location, and make the most out of the investment.

Seek out help from experienced real estate professionals. Before bidding on any property, it is best to get as much information as possible on it from someone with plenty of experience in this market. Talk with an appraiser or real estate agent. Speaking with this expert is sure to lead to better choices.

Think about the advantages of property management companies. Though you will have to spend money to do so, the investment is often worthwhile. The company that does the property management will screen potential renters and deal with costly repairs. That will give you more time to look for additional investment opportunities.

Are property values rising where you live? Are there tons of vacancies in rental properties? Depending on the priorities you have for a property, it is important to focus on two things. You might want to buy a cheap house to flip, but you shouldn’t set expectations to high.

Know what the laws and regulations in your zoning area are. These laws can influence your ability to remodel, so know them ahead of time. Talk to officials to know what crucial information you must know and follow before investing any money.

It is important to run a credit and background check on each potential tenant. People who are untrustworthy may cause damages that will significantly bring down your property value. Background checks don’t eliminate risk completely, but they do help you encounter less issues.

There is a lot of responsibility involved with real estate investments. Starting at a young age allows you to build up a good portfolio of investments, but no matter when you start you must have stability. Establish yourself in a community and begin saving money and making connections. This is great for laying down a foundation to start with real estate investing.

Understand when you want to sell your property before you buy it. This can affect how much money you are willing to invest in a property. You you plan to buy a house that people call a “fixer-upper”, be sure that you can afford to renovate it. If you plan to buy but not sell soon, you can up the amount you spend on the home.

Watch out for fixer-uppers. Finding a house that only needs minimal work can be a great deal. Far too often, homes that need some work will turn into money pits you’ll end up spending all your time and funds on. Make sure you understand exactly what you are getting yourself into.

There are a couple of things to keep in mind when you are negotiating for an investment property. To begin with, you’ll want to learn how to be a better listener over talking too much. Second, never think for the seller. You should watch out for your own interests so you can make more money.

As stated in the above article, to be a successful real estate investor you need to have a good understanding of what is going on in the market. The information located above will teach you what you need to know about real estate investing. To succeed here, you should study information from those successful at investing in real estate and keep those tips close to you.…

We’ll Answer Your Pressing Questions About Real Estate Investing Today

There are still many benefits if you are getting into real estate. Now is the time to become an investor in real estate. You have already taken the beginning step to success.

Prior to making a real estate investment, know what kind of investment you’re interested in. Flipping real estate properties might be something that works best for you. Maybe, you want to take on a project from scratch. Different ways require different work, so understand what suits your skills best.

When you look at the business strategy know that sunk costs go further than general home prices. You’ll have to cover closing costs, legal fees, and pay for staging. All that will have to come out of your budget. As you determine the bottom lines according to your budget, you must be sure you have incorporated all costs.

Know the local real estate market. Knowing what the rent and mortgage if other properties is will give you a better idea of what the value of your property is. This will help you to make a practical and heady decision.

Choose wisely who you allow to live in your rental property. The person should pay the rent for the first month and a deposit without a problem. If they can’t get their money together at this time, they probably won’t be able to make the rent. Search for another tenant.

Before buying a property, learn the real estate essentials. Some real estate mistakes can be very costly. Training is an investment more than an expense, and it helps you protect your money for years to come.

You must evaluate any neighborhood where you plan to buy investment properties. Location is everything when it comes to investment properties and it is even more important to know the zoning laws and whether or not the property has any special attributes. Talking to residents can help you get a handle on the conditions of the neighborhood.

Factor in how able you are to rent a home that you’re buying so you can figure out its worth. This can bring in a lot of money for you. When you are ready to finally sell the property, you can realize a much greater return on your investment.

Location is the major factor that will impact your real estate choices. Many times, purchasing a fixer upper in a great location is better than purchasing the perfect house in a location that is undesirable. Think hard about location, and never fail to consider the potential that exists.

Never buy properties only to run up the number that you totally own. This approach is common to novices in commercial real estate investing, but you will soon learn that this is not the best way. Do some careful investigation before making an investment. This should protect the integrity of your investments.

Make sure that any property you invest in will return your money to you, plus some. By failing to ensure a healthy profit, your investment is only an asset that may lead to a loss over time. Upgrade the property and include your time and materials and a fee for your trouble in your resale price.

As a real estate investor, you are going to experience both good times and bad times. Do not allow the bad times to bring you down. Keep fighting through the bad times, and sooner or later you will be successful. Continue to learn, keep working, and the results will come your way.

See to it that you’re purchasing local properties. Your familiarity with the area minimizes the unknowns that you might face otherwise. You don’t have to worry about what goes on in your rental property because you live nearby. The best way to control your real estate investment is to live nearby so you can manage things on your own.

Figure out what the laws and regulations are like when investing in a new area. As the statutes can widely vary, knowing them ahead of time can be very beneficial. Get in touch with local government officials so that you know you are following the rules and you know what to expect.

If your investment property is vacant, be certain to keep cash reserves for the purpose of paying the mortgage each month. Maintaining reserves for this helps provide security in that your mortgage will always be paid in between renters.

Find areas that have a lot of foreclosures. There will always be a bounce-back in the market eventually. If you bought low, you could really cash in. Keep in mind that it might be some time before you can cash in and get your money back, however.

Think about purchasing in locales with lots of foreclosures if you are able to keep hold of properties for a fair amount of time before you need to sell. These areas always bounce back eventually, and anyone who bought low will stand to make a hefty profit. Remember that it may take some time before it is possible to sell and recoup your outlays.

Consider whether your real estate purchase will be a long-term purchase or a short-term purchase. This changes how much money you’ll need available. If you plan to buy a fixer upper, you must have sufficient funds to make necessary repairs. If you plan to buy but not sell soon, you can up the amount you spend on the home.

You should approve all tenants if you invest in rental properties. Those you can’t trust are likely sources of damage to your investment. Though a background check is not a fool-proof method, you will lessen your chances of problems.

Understand when you want to sell your property before you buy it. This can affect how much money you are willing to invest in a property. You you plan to buy a house that people call a “fixer-upper”, be sure that you can afford to renovate it. If you plan to buy but not sell soon, you can up the amount you spend on the home.

Watch out for fixer-uppers. Finding a house that only needs minimal work can be a great deal. Far too often, homes that need some work will turn into money pits you’ll end up spending all your time and funds on. Make sure you understand exactly what you are getting yourself into.

There are a couple of things to keep in mind when you are negotiating for an investment property. To begin with, you’ll want to learn how to be a better listener over talking too much. Second, never think for the seller. You should watch out for your own interests so you can make more money.

The time for investing in real estate is when there are low prices, and that time is now. Those who are successful in real estate begin by studying the area first and knowing the business thoroughly. You can join them by using this information.…

For The Best Tips And Tips On Real Estate Investing, This Is For You

People often find real estate to be confusing, but taking the time to learn about investing in this sector will really pay off. If you’re a veteran or even a rookie, there’s something for you to learn in the following guide. Read on to learn all there is to know about the business.

Prior to investing in any type of property, make certain you do a market analysis and research that property thoroughly. Look at between 50 and 100 properties in a location you desire, and create a spreadsheet with each one. Things to list include current pricing, projected rent earnings, and repair budgets. This will allow you to pick out great deals instead of ones that are bad.

Prior to starting your real estate investments, choose a particular submarket to focus on. Maybe you want to flip real estate. Perhaps, you are more suited to rebuilding and extensive remodeling projects. You need to consider your tastes and skills so you pick the right type of real estate to invest in.

Speak with fellow real estate investors. Getting advice from those already in the business will help a lot. Having a network of knowledgeable investors will be beneficial. Search the web for people who know what they are doing. Forums, in particular, can be a big help.

Pick properties that you’re confident will raise in value. Properties near business districts or water can earn you a lot of money. Understand that the price will fluctuate based on the work that you put into the property.

When thinking about buying real estate as an investment, make sure that you will get enough from the rent to cover as much of the mortgage payment as possible. This will help to insure that you are buying a good investment. You must not be in a position in which your own rent payment is dependent upon your renter’s rent payment.

Never dig near your property as part of renovations, but rather call in the experts to determine the location of power lines. Digging in a property is illegal in many places, plus you want to avoid causing any damage to it.

When you consider buying rental properties, consider a strong property manager that can find good tenants. Since their rent is paying the mortgage, good habits and credit will be essential. You could lose investments if you don’t do this.

You may want to expand your options and invest in business properties rather than residential units. Not only can a business property be rented for longer terms, but they can bring in a lot of money. Strip malls and business complexes can offer you a lot of rental income streams for a single location.

Your time is important to you. You may love remodeling homes; however, you should consider if the time spent doing manual labor is worth it. Would you be better off looking for a less time consuming opportunity? Whatever you can outsource, do it. You will very much appreciate the free time that you will gain so that you can focus on other important things.

Research a city’s laws before buying real estate there. Most municipalities have an official website. You may discover city planning details and other info that will influence your decisions. If the city is growing, it’s a good place to invest.

Do you live in an area where property values are increasing? Are there many people selling their homes? Knowing two key questions is essential when starting out in real estate investing. You will want to know exactly how you are attaining your profits.

Figure out the best type of building to maintain. It is not enough to buy a property when you are investing in real estate. You need to consider how you’re going to keep up with a property so you can sell it in the future. Single story homes are easier to keep up than multi-unit properties, for instance. Don’t take on more than you know you can tackle.

While there is nothing wrong with diversifying your portfolio by purchasing real estate in different areas, states, and possibly even countries, make sure you tap into local sources. There are great deals you may find in areas that you know well. You may find even better deals for getting started.

If investing in a few properties at once, get these properties in nearby areas. You will save time and money on maintenance and travel this way. Not only will it save you some time, you can become much more knowledge about that specific location.

Try buying in heavy foreclosure areas if you can afford to hang on to the properties for awhile before reselling. Eventually, the community will come back to life, and you will earn a great return on your investment. You must understand that it may be a while before you are able to get any money back.

Avoid houses that need major work. Finding a house that only needs minimal work can be a great deal. Far too often, homes that need some work will turn into money pits you’ll end up spending all your time and funds on. Know how much you can reasonably spend to fix up a property.

Understand the market lingo. You must sound knowledgeable to others. If a seller thinks you might be new in this game, they will try to play you. Use the lingo you learn, as well as your knowledge, to give you an advantage. A professional image will give you an advantage during negotiations.

Learn how to talk like a real estate expert. You should have good idea what you are talking about at all times. If you sound like a newbie, folks may try to swindle you. It is smart to use lingo and know-how to gain leverage. You will have the upper hand when negotiating if you sound professional.

Be confident in your decision. You will have to tune their criticism out and educate yourself so you can make smart choices with your money. You can make an exception if a savvy investor is trying to get your attention about details concerning an investment.

Watch out for fixer-uppers. Finding a house that only needs minimal work can be a great deal. Far too often, homes that need some work will turn into money pits you’ll end up spending all your time and funds on. Make sure you understand exactly what you are getting yourself into.

There are a couple of things to keep in mind when you are negotiating for an investment property. To begin with, you’ll want to learn how to be a better listener over talking too much. Second, never think for the seller. You should watch out for your own interests so you can make more money.

If you want to invest in real estate, you have to learn to swat away pushy salespeople like flies. Review the tips provided above and then go out and try your hand in the real estate business. Real estate can earn you a lot of money, so don’t let your chance slide by!

Mortgage Rate Update for March 1, 2016

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Mortgage Rate Update
Zillow

Current mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow at 3.46 percent, down 1 basis point from last week.

The 30-year fixed mortgage rate hovered around 3.45 percent throughout the week before rising to the current rate.

“Last week, mortgage rates remained mostly flat in response to a relatively sedate week,” said Erin Lantz, vice president of mortgages at Zillow. “All eyes this week will be on Friday’s monthly jobs report. Forecasters are expecting a moderately strong report and disappointing data could push rates lower.”

Additionally, the 15-year fixed mortgage rate was 2.68 percent, and for 5/1 ARMs, the rate was 2.79 percent.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

*The weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

 

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Have a Massive Mortgage? Here Are Some Tips for Refinancing

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If you’re looking to refinance your home and pull out funds for home improvement, there’s good news. Lending guidelines were recently loosened on cash-out refinance transactions.

Here’s what you should know if your loan size exceeds $417,000.

First off, it’s going to cost more. Here’s why: When a mortgage loan exceeds this threshold, it moves from “conforming” to “conforming high balance” which contains a pricing adjustment for delivery to Fannie Mae or Freddie Mac. Additionally, when you elect to cash-out refinance, another pricing comes into the equation driving the terms higher than if your loan was lower and you weren’t looking to cash out your equity.

How the New Refinancing Guidelines Are Changing Costs

If you attempted a cash-out refinance on your home for a high-balance mortgage in 2015, you would have been limited to a 70% loan-to-value ratio (i.e. how much you want to refinance compared to the value of the property) with higher rates. To put this in perspective, the interest rate on a 30-year fixed-rate mortgage at the end of 2015 was 4%, assuming a loan done as “rate and term” (i.e. not pulling any money out). That same loan would cost a whopping 4.625% with a cash-out refinance, all other factors being equal. You heard that right. You’d pay 0.625% more in rate just for pulling cash out versus doing a rate-and-term refinance under the same 70% loan-to-value scenario. Freddie Mac offered the option of going as high as 80% loan-to-value with even heavier fees on loans in excess of $417,000.

The new guidelines allow competitive pricing all the way to a 75% loan-to-value ratio, with a minimum credit score of at least 700. Better credit scores, of course, always yield a better rate and fee combination as well. (You can check your credit scores for free each month on Credit.com to see where you stand.) These revised changes allow for lower loan adjustments for both the 75% loan-to-value and 80% loan-to-value ratios, to the maximum conforming high balance loan limit for your county. In the county of Sonoma, Calif., for example, this means cash-outs all the way to $554,300. Other counties such as San Francisco offer cash-out loan sizes up to $625,500.

How Jumbo Loans Come Into Play

Jumbo home loans are conforming high-balance loans that are $1 over the maximum county high-balance loan limit. In most U.S. counties, the threshold is the same $417,000 noted above, but can be higher in more expensive markets. Mortgage lenders examine the financial picture of applicants looking for big mortgages far more closely than Fannie or Freddie Mac loans, and for good reason – they are riskier to the banks.

Most jumbo mortgage loans will allow a cash-out refinance as high as 70% loan to value with at least a 700 credit score or better and good credit and income history.

Some other factors to consider when researching mortgage loan programs and cash-out scenarios:

  • If you are combining a first and second mortgage into one, be on the lookout.Fannie Mae and Freddie Mac consider second mortgages taken out after you bought the home to be cash out, and subject you to stronger home equity requirements. Loans insured by the FHA do not have this limitation and will go to a 97% loan-to-value if your intention is only to combine the first and second mortgages into one. Fannie and Freddie will refinance your loan as rate and term, which will allow a higher loan-to-value ratio (less equity) if the first and second mortgage was acquisition debt, meaning both the first and second mortgage were used to purchase the home.
  • If your first and second mortgage combined exceed $417,000, you may be able to be put on a jumbo mortgage loan program allowing you to refinance your loan as a rate-and-term refinance. You are not allowed to have made any draws or advances on your second mortgage in the past 12 months.

Before you decide on what type of refinance you want to pursue, be sure to ask questions, do your research and make sure you understand the fine print associated with the new loan.

 

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How to Get a Mortgage With Only 3% Down

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There’s potentially some good news for millions of Americans who have had trouble trying to get into a new home. Bank of America plans to offer a 3% down conforming loan aimed at giving low- and moderate-income homebuyers more access to mortgages, including counseling before and after the loan process.

Called the Affordable Loan Solution, the new mortgage product is available through a partnership with Self-Help Ventures Fund and Freddie Mac, and will let borrowers avoid private mortgage insurance (PMI), a product usually required for low-down-payment loans that can add significantly to monthly mortgage repayments.

“There is a need in today’s marketplace for more responsible mortgage products that enable creditworthy homebuyers, who meet certain income limits and other requirements, to become homeowners at an affordable entry point with comprehensive counseling,” D. Steve Boland, consumer lending executive at Bank of America, said in a statement.

While the lower down payment can be attractive to buyers without ample savings, it’s important to remember that you’ll typically pay more for the home through interest on a larger loan amount than you would with more cash down. (You can go here to figure out what your down payment should be.)

Here’s what you need to qualify for Bank of America’s new loan.

  • The 3% down payment.
  • You must purchase a primary, single-family residence, with no reserve funds required in most situations.
  • Borrowers may use secondary financing, such as an affordable second loan, grants, or even cash they have on hand. The program will also consider non-traditional forms of credit to demonstrate credit history.
  • Loan amounts will be within conforming loan limits (up to $417,000), and applicants’ income cannot exceed 100% of the HUD area median income.
  • Applicants must occupy the property, and first-time buyers will need to participate in homebuyer education through Bank of America counselors.

Bank of America said the loans will be available through all of Bank of America mortgage sales channels. According to The Wall Street Journal, the bank plans to ensure that applicants’ debt-to-income ratio of is no more than 43%.

The bank is partnering with Self-Help, which will provide post-closing counseling to any borrowers who might be experiencing payment difficulties. Loan servicing will be immediately transferred after origination to Self-Help’s designated specialty servicer, who will handle all loans regardless of future performance. Freddie Mac will purchase all of the eligible affordable mortgages originated via the Self-Help and Bank of America partnership.

Getting a Mortgage With a Low Down Payment

Lenders typically require prospective homebuyers to contribute a down payment equal to 3-20% of the sales price of the home. Loans below the 20% mark, including the 3.5% down payment mortgages offered by the Federal Housing Administration, generally require you to pay for PMI, though there are some federal programs in place that let qualified borrowers secure 100% financing. Veterans and current military members, for instance, may be able to utilize the VA loan program, which comes with no down payment or private mortgage insurance requirement.

Keep in mind, even with their relaxed or different credit standards, low down payment loans can be tricky to obtain – and, as previously mentioned, could prove expensive when it comes to fees and interest. Consumers should look into all options, including conventional financing, when buying a home. You should also check their credit scores, since a good one will generally entitle you to better terms and conditions on all home loan types. (You can do so by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your two free credit scores each month on Credit.com.) Tips for improving your credit include paying down high credit card balances, addressing unpaid collection accounts and disputing any errors with the major credit reporting agencies.

 

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Mortgage Rates Continues to Fall Hitting 3.45 Percent

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Zillow

Mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow at 3.45 percent, up 2 basis points from last week.

The 30-year fixed mortgage fell to 3.37 percent on Thursday, then hovered around 3.43 percent before rising to the current rate.

“Mortgage rates were flat last week, holding near their lowest levels since 2013, on continued turmoil in global equities and oil markets,” said Erin Lantz, vice president of mortgages at Zillow. “While it’s hard to imagine mortgage rates falling much lower, putting them within striking distance of all-time historic lows, international economic news, speeches by Fed officials, and several U.S. data releases this week could continue the downward pressure on long-term rates.”

Additionally, the 15-year fixed mortgage rate was 2.71 percent, and for 5/1 ARMs, the rate was 2.69 percent.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

*The weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

 

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Mortgage Rates Fall Further, Hitting 3.50%

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ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed loans fell this week, with the rate borrowers were quoted on Zillow at 3.50 percent Tuesday, down 11 basis points from last week.

The 30-year fixed mortgage rate fell throughout the week, reaching 3.47 percent on Sunday before rising slightly.

“Mortgage rates fell last week, touching their lowest levels since mid-2013 before edging slightly higher on Monday,” said Erin Lantz, vice president of mortgages at Zillow. “This week, markets will look toward Friday’s monthly jobs report and should move upward if the data exceeds expectations.”

Additionally, the 15-year fixed mortgage rate was 2.72 percent. For 5/1 ARMs, the rate was 2.73 percent.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

 

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