Thursday, April 23, 2009
Wednesday, April 22, 2009
Reverse mortgages can provide extra cash
Many people have seen TV ads featuring actor Robert Wagner encouraging senior citizens to consider reverse mortgages to provide extra dollars for their golden years.
In a regular mortgage, homeowners make payments to lenders. In a reverse mortgage, however, homeowners receive money from a lender and usually are not required to pay it back as long as they live in their homes, according to the Federal Trade Commission.
Reverse mortgage loans, based on home equity, are repaid when homeowners die, sell their homes or no longer live in the residences.
In a regular mortgage, homeowners make payments to lenders. In a reverse mortgage, however, homeowners receive money from a lender and usually are not required to pay it back as long as they live in their homes, according to the Federal Trade Commission.
Reverse mortgage loans, based on home equity, are repaid when homeowners die, sell their homes or no longer live in the residences.
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“Reverse mortgages can help homeowners who are house-rich but cash-poor stay in their homes and still meet their financial obligations,” a report from the FTC states.
SouthEast Arizona Governments Organization, headquartered in Bisbee, offers reverse mortgage counseling at no charge, said Julie Packer, the organization’s housing programs administrator. A SEAGO counselor will counsel homeowners at their residences. There is no need to travel to Bisbee for this service.
Packer said reverse mortgages are for senior citizens who have paid off or nearly paid off their regular mortgage.
“It’s not for everyone, though,” Packer said. “It’s kind of like home ownership. Home ownership is not for everyone.”
According to the FTC, reverse mortgage loan advances are not taxable and usually do not affect Social Security or Medicare benefits. Owners retain titles to their homes and are not required to make monthly repayments.
The loan must be repaid when the last surviving borrower dies, sells the home or no longer lives in the house as a principal residence.
There are three types of reverse mortgages: Single-purpose, which are offered by some state and local government agencies and nonprofit organizations; home equity conversion mortgages, known as HECM, which are federally insured, and proprietary reverse mortgages, which are private loans that are backed by the companies that develop them.
Single-purpose reverse mortgages generally have low costs, but they are not available everywhere, and they can be used for one purpose specified by the government or nonprofit lender.
Proprietary mortgages and HECMs tend to be more costly and are widely available — and carry higher upfront costs to homeowners.
In the HECM program, a borrower can live in a nursing home or other medical facility for up to 12 months before the loan becomes due and payable.
There are several features of a reverse mortgage to consider, including the following:
• Lenders generally charge origination fees and other closing costs for a reverse mortgage. Lenders may also charge servicing fees during the term of the mortgage. The lender generally sets these fees and costs.
• The amount owed on a reverse mortgage usually grows over time. Interest is charged on the outstanding balance each month and added to the amount owed.
• Reverse mortgages may have fixed or variable rates. Most have variable rates that will likely change.
• Reverse mortgages can use up all or some of the equity in your home, leaving fewer assets for you and your heirs. A “nonrecourse” clause in most reverse mortgages prevents either you or your estate from owing more than the value of your home when it is repaid.
• Owners retain titles to their homes and remain responsible for property taxes, insurance, utilities, fuel, maintenance and other expenses.
• Interest on reverse mortgages is not deductible on income tax returns until the loan is paid off in part or in full.
• For homeowners at least 62 years old, a reverse mortgage can be used to generate funds to prevent the foreclosure of a regular mortgage.
Packer said anyone considering a reverse mortgage should try to use a local lender or one of the larger, well-known banks, such as Bank of America or Wells Fargo.
She also said to make sure the appraiser is familiar with property values in Graham or Greenlee counties, and does the appraisal with local criteria in mind.
SouthEast Arizona Governments Organization, headquartered in Bisbee, offers reverse mortgage counseling at no charge, said Julie Packer, the organization’s housing programs administrator. A SEAGO counselor will counsel homeowners at their residences. There is no need to travel to Bisbee for this service.
Packer said reverse mortgages are for senior citizens who have paid off or nearly paid off their regular mortgage.
“It’s not for everyone, though,” Packer said. “It’s kind of like home ownership. Home ownership is not for everyone.”
According to the FTC, reverse mortgage loan advances are not taxable and usually do not affect Social Security or Medicare benefits. Owners retain titles to their homes and are not required to make monthly repayments.
The loan must be repaid when the last surviving borrower dies, sells the home or no longer lives in the house as a principal residence.
There are three types of reverse mortgages: Single-purpose, which are offered by some state and local government agencies and nonprofit organizations; home equity conversion mortgages, known as HECM, which are federally insured, and proprietary reverse mortgages, which are private loans that are backed by the companies that develop them.
Single-purpose reverse mortgages generally have low costs, but they are not available everywhere, and they can be used for one purpose specified by the government or nonprofit lender.
Proprietary mortgages and HECMs tend to be more costly and are widely available — and carry higher upfront costs to homeowners.
In the HECM program, a borrower can live in a nursing home or other medical facility for up to 12 months before the loan becomes due and payable.
There are several features of a reverse mortgage to consider, including the following:
• Lenders generally charge origination fees and other closing costs for a reverse mortgage. Lenders may also charge servicing fees during the term of the mortgage. The lender generally sets these fees and costs.
• The amount owed on a reverse mortgage usually grows over time. Interest is charged on the outstanding balance each month and added to the amount owed.
• Reverse mortgages may have fixed or variable rates. Most have variable rates that will likely change.
• Reverse mortgages can use up all or some of the equity in your home, leaving fewer assets for you and your heirs. A “nonrecourse” clause in most reverse mortgages prevents either you or your estate from owing more than the value of your home when it is repaid.
• Owners retain titles to their homes and remain responsible for property taxes, insurance, utilities, fuel, maintenance and other expenses.
• Interest on reverse mortgages is not deductible on income tax returns until the loan is paid off in part or in full.
• For homeowners at least 62 years old, a reverse mortgage can be used to generate funds to prevent the foreclosure of a regular mortgage.
Packer said anyone considering a reverse mortgage should try to use a local lender or one of the larger, well-known banks, such as Bank of America or Wells Fargo.
She also said to make sure the appraiser is familiar with property values in Graham or Greenlee counties, and does the appraisal with local criteria in mind.
Sunday, April 19, 2009
A Guide to Investing for College Students
Investing for beginners is easier than ever before. With access to the stock market as close as your keyboard, you're just clicks away from getting started. Just learn the basics and find the right online tools to help you, and you'll be on your way.
The first concept to get to know in beginner investing is compound interest. The same principles of interest that can keep you in debt when you're trying to manage your credit work to your advantage when you invest money. Simply put, it means that the interest you make on an investment is added to your original investment and then reinvested to make even more interest. It's not as complicated as it sounds.
Here's a simplified example. An original investment of $100 with a return rate of 10% that's compounded yearly would make $10 in interest in year one for a total balance of $110. In year two if that $110 achieves the same 10% yield, it would add an additional $11 to the total. Continue to let the money compound over the next 18 years at 10% annually and by the 20th year it would be $672.75. But let it continue to compound for 30 or 40 years and it would grow to $1,744.94 and $4,525.93 respectively. All that without adding any additional money. Wow!
If you've determined that investing is right for you, you should look for an online discount stock brokerage or other financial services company that allows you to open an account with a low minimum balance, or none at all. The company you choose should offer low maintenance and trade fees, while providing you with tracking and investment management tools so that you can easily keep an eye on your investments. But before you sign up, you should know some basic investment terms and products.
There are many other definitions and concepts that you should have a working knowledge of as a beginner investing for the first time. These include:
* 401K - A company-sponsored retirement plan that allows you to contribute pre-tax dollars. 401Ks shelter your interest earnings as you continue to work, so that you'll only be taxed when you retire and withdraw money. 401Ks help to reduce your taxable income each year, saving you money on federal, state and local income taxes
* Bond - When corporations and governments borrow money from investors they are given a bond. The borrower in this case agrees to pay the investor the price of the original 'loan' plus interest at a predetermined later date
* Capital gain/capital loss - The money made or lost from an investment
* Certificate of Deposit (CD) - Typically a bank-issued document that guarantees an investor a specific yield on an amount of money when 'lent' to the bank for a pre-determined period of time. CD terms range from a month to several years
* Diversification - Making investments in different types of funds to help distribute your risk. Some funds are diversified in themselves, and could for instance include stocks from biotech, telecommunications, banking, entertainment and food manufacturing companies
* Individual Retirement Account/IRA - A retirement account that provides tax-deferral or other tax benefits
* Interest - The amount paid by a borrowing party for use of a lender's money. With credit cards you are the borrower, with investments you are the lender
* Mutual fund - A financial product that is managed and marketed by an investment company and can be comprised of stocks, bonds, or other securities products. The investment company pools investor contributions to buy and sell stocks and bonds for the entire group
* SEC/Securities and Exchange Commission - The governmental regulation agency that was established to help protect investors and oversees participants and activities in the world of securities
* Securities - Any type of investment product like a stock, bond, note, etc.
* Stock - A certificate or share of ownership in a corporation
* Trader - One who buys and sells securities like bonds, stocks, etc.
* Yield - The return on an investment as a percentage
If you grasp these investing for beginners basics, you can be investing in no time. Sure growing your investments may take time, but the returns will be well worth the wait.
The first concept to get to know in beginner investing is compound interest. The same principles of interest that can keep you in debt when you're trying to manage your credit work to your advantage when you invest money. Simply put, it means that the interest you make on an investment is added to your original investment and then reinvested to make even more interest. It's not as complicated as it sounds.
Here's a simplified example. An original investment of $100 with a return rate of 10% that's compounded yearly would make $10 in interest in year one for a total balance of $110. In year two if that $110 achieves the same 10% yield, it would add an additional $11 to the total. Continue to let the money compound over the next 18 years at 10% annually and by the 20th year it would be $672.75. But let it continue to compound for 30 or 40 years and it would grow to $1,744.94 and $4,525.93 respectively. All that without adding any additional money. Wow!
If you've determined that investing is right for you, you should look for an online discount stock brokerage or other financial services company that allows you to open an account with a low minimum balance, or none at all. The company you choose should offer low maintenance and trade fees, while providing you with tracking and investment management tools so that you can easily keep an eye on your investments. But before you sign up, you should know some basic investment terms and products.
There are many other definitions and concepts that you should have a working knowledge of as a beginner investing for the first time. These include:
* 401K - A company-sponsored retirement plan that allows you to contribute pre-tax dollars. 401Ks shelter your interest earnings as you continue to work, so that you'll only be taxed when you retire and withdraw money. 401Ks help to reduce your taxable income each year, saving you money on federal, state and local income taxes
* Bond - When corporations and governments borrow money from investors they are given a bond. The borrower in this case agrees to pay the investor the price of the original 'loan' plus interest at a predetermined later date
* Capital gain/capital loss - The money made or lost from an investment
* Certificate of Deposit (CD) - Typically a bank-issued document that guarantees an investor a specific yield on an amount of money when 'lent' to the bank for a pre-determined period of time. CD terms range from a month to several years
* Diversification - Making investments in different types of funds to help distribute your risk. Some funds are diversified in themselves, and could for instance include stocks from biotech, telecommunications, banking, entertainment and food manufacturing companies
* Individual Retirement Account/IRA - A retirement account that provides tax-deferral or other tax benefits
* Interest - The amount paid by a borrowing party for use of a lender's money. With credit cards you are the borrower, with investments you are the lender
* Mutual fund - A financial product that is managed and marketed by an investment company and can be comprised of stocks, bonds, or other securities products. The investment company pools investor contributions to buy and sell stocks and bonds for the entire group
* SEC/Securities and Exchange Commission - The governmental regulation agency that was established to help protect investors and oversees participants and activities in the world of securities
* Securities - Any type of investment product like a stock, bond, note, etc.
* Stock - A certificate or share of ownership in a corporation
* Trader - One who buys and sells securities like bonds, stocks, etc.
* Yield - The return on an investment as a percentage
If you grasp these investing for beginners basics, you can be investing in no time. Sure growing your investments may take time, but the returns will be well worth the wait.
Thursday, April 16, 2009
How to Save Money When You Have None
Learning how to save money when you have none may seem like an impossible task, but we Save is here to help.
Set Manageable Goals
The key to learning how to save money when you have none is to think small. If you're struggling to keep a roof over your head and food on the table, planning for retirement or saving for a child's college education probably seems like an impossible goal. Focus on finding more manageable ways to save money. For example:
* Set a goal of cutting $10 per week from your budget. This can be accomplished by taking the bus instead of driving to work, eliminating a trip to a fast food restaurant, clipping coupons, or checking out movies from the public library instead of going to the video store. Once a week, make a trip to the bank to deposit the $10 in your savings account.
* Empty the spare change from your pockets into a jar whenever you walk through the door. When the container is full, add it to your savings account.
* Have a garage sale, take old items into a consignment shop, or sell collectibles on eBay.
* Spend an afternoon collecting cans from the side of the road to return for the deposits.
* Look for ways to earn extra money to give yourself a bit of a financial cushion. Babysitting or doing yard work for people in your community is a great idea. LoveToKnow Business also has a number of suggestions in the article,Home Based Businesses for Under $ 100.
Ask for Help Learning How to Save Money When You Have None
If you're struggling, there's no shame in asking others for help. Don't let foolish pride keep you from making the most of a bad situation. You can always repay the favor after your financial situation improves.
If you're in need of food assistance, consider the following resources:
* Angel Food Ministry allows people in any income bracket to purchase boxes of deeply-discounted groceries once per month. The basic box contains enough food to feed a family of four for one week.
* Pregnant women in a low-income bracket and those with children under the age of five can get milk, juice, cereal, and other necessities through WIC. The program also offers nutrition advice, free dental screenings, and assistance with family planning needs.
* The Supplemental Nutrition Assistance Program allows people with low incomes to purchase the food they need. You do not need to be married or have a child to qualify.
* If you're really in a bind, community food pantries provide temporary assistance with groceries. In most cases, all you need to receive help is proof of your legal address.
* If you have children in school, they may be eligible for free or reduced-price meals. Some schools also have programs that allow kids to sign up for a bag of groceries to take home on the weekends.
Other forms of assistance for how to save money when you have none include:
* Medicaid provides medical insurance for low income individuals and families who fit into an eligibility group that is recognized by federal and state law.
* The State Children's Health Insurance Program (SCHIP)offers coverage for children in families that earn too much for Medicaid, but not enough for private insurance.
* The Find a Health Center site can help you locate a clinic with a sliding scale fee system if you are uninsured and don't qualify for Medicaid or SCHIP coverage.
* Wal-Mart's $4 prescription program can help you pay for some of the medications you need, regardless of your income. Many other stores also have similar programs.
* LIHEAP provides assistance with heating costs during the winter months.
* Toys for tots provides Christmas gifts for needy children.
Set Manageable Goals
The key to learning how to save money when you have none is to think small. If you're struggling to keep a roof over your head and food on the table, planning for retirement or saving for a child's college education probably seems like an impossible goal. Focus on finding more manageable ways to save money. For example:
* Set a goal of cutting $10 per week from your budget. This can be accomplished by taking the bus instead of driving to work, eliminating a trip to a fast food restaurant, clipping coupons, or checking out movies from the public library instead of going to the video store. Once a week, make a trip to the bank to deposit the $10 in your savings account.
* Empty the spare change from your pockets into a jar whenever you walk through the door. When the container is full, add it to your savings account.
* Have a garage sale, take old items into a consignment shop, or sell collectibles on eBay.
* Spend an afternoon collecting cans from the side of the road to return for the deposits.
* Look for ways to earn extra money to give yourself a bit of a financial cushion. Babysitting or doing yard work for people in your community is a great idea. LoveToKnow Business also has a number of suggestions in the article,Home Based Businesses for Under $ 100.
Ask for Help Learning How to Save Money When You Have None
If you're struggling, there's no shame in asking others for help. Don't let foolish pride keep you from making the most of a bad situation. You can always repay the favor after your financial situation improves.
If you're in need of food assistance, consider the following resources:
* Angel Food Ministry allows people in any income bracket to purchase boxes of deeply-discounted groceries once per month. The basic box contains enough food to feed a family of four for one week.
* Pregnant women in a low-income bracket and those with children under the age of five can get milk, juice, cereal, and other necessities through WIC. The program also offers nutrition advice, free dental screenings, and assistance with family planning needs.
* The Supplemental Nutrition Assistance Program allows people with low incomes to purchase the food they need. You do not need to be married or have a child to qualify.
* If you're really in a bind, community food pantries provide temporary assistance with groceries. In most cases, all you need to receive help is proof of your legal address.
* If you have children in school, they may be eligible for free or reduced-price meals. Some schools also have programs that allow kids to sign up for a bag of groceries to take home on the weekends.
Other forms of assistance for how to save money when you have none include:
* Medicaid provides medical insurance for low income individuals and families who fit into an eligibility group that is recognized by federal and state law.
* The State Children's Health Insurance Program (SCHIP)offers coverage for children in families that earn too much for Medicaid, but not enough for private insurance.
* The Find a Health Center site can help you locate a clinic with a sliding scale fee system if you are uninsured and don't qualify for Medicaid or SCHIP coverage.
* Wal-Mart's $4 prescription program can help you pay for some of the medications you need, regardless of your income. Many other stores also have similar programs.
* LIHEAP provides assistance with heating costs during the winter months.
* Toys for tots provides Christmas gifts for needy children.
Tuesday, March 31, 2009
Facebook seeks new finance chief as Yu leaves
Facebook said Tuesday that its finance chief has left and that it is seeking a successor with "public company experience," a move that will feed speculation that the social networking titan is preparing for an IPO.
Gideon Yu, who had served as chief financial officer since 2007, departed for undisclosed reasons.
Co-founder Mark Zuckerberg has repeatedly said that an IPO was possible for the privately held Palo Alto company in the future, but always cautioned that such a move was not imminent.
In any case, investor appetite for initial public offerings has evaporated because of the depressed economy. Only one U.S. company went through with an IPO in the first quarter, according to Renaissance Capital, while many more are waiting for the climate to improve.
Yu had previously served at Yahoo as treasurer and at YouTube, helping negotiate the sale of the video site to Google in 2006. He had also briefly worked at Sequoia Capital as a venture capitalist.
Facebook's recruitment of Yu was part of a broader effort to bring experienced hands into the company, including former Google executive Sheryl Sandberg as chief operating officer. Relative old-timers at the 5-year-old company have been leaving over the past year, including co-founder and lead engineer Dustin Moskovitz; Adam d'Agelo, the chief technology officer; and Matt Cohler, an early executive.
Facebook has continued its phenomenal growth and is approaching 200 million users globally. Although it has struggled at times to capitalize on its user base through online advertising, it has made significant progress, according to a person familiar with the matter.
Facebook has turned in five consecutive quarters of profits, under the accounting formula of EBITDA, or earnings before interest, taxes, depreciation and amortization, according to the source. Revenue is expected to increase at least 70 percent in 2009; the company is expected to be cash flow positive in 2010.
Venture capitalists have poured money into Facebook in several rounds of funding. In 2007, Microsoft bought a 1.6 percent stake for $240 million, which valued the site at $15 billion.
Many investors now call that valuation excessively high.
E-mail Verne Kopytoff at vkopytoff@sfchronicle.com.
Gideon Yu, who had served as chief financial officer since 2007, departed for undisclosed reasons.
Co-founder Mark Zuckerberg has repeatedly said that an IPO was possible for the privately held Palo Alto company in the future, but always cautioned that such a move was not imminent.
In any case, investor appetite for initial public offerings has evaporated because of the depressed economy. Only one U.S. company went through with an IPO in the first quarter, according to Renaissance Capital, while many more are waiting for the climate to improve.
Yu had previously served at Yahoo as treasurer and at YouTube, helping negotiate the sale of the video site to Google in 2006. He had also briefly worked at Sequoia Capital as a venture capitalist.
Facebook's recruitment of Yu was part of a broader effort to bring experienced hands into the company, including former Google executive Sheryl Sandberg as chief operating officer. Relative old-timers at the 5-year-old company have been leaving over the past year, including co-founder and lead engineer Dustin Moskovitz; Adam d'Agelo, the chief technology officer; and Matt Cohler, an early executive.
Facebook has continued its phenomenal growth and is approaching 200 million users globally. Although it has struggled at times to capitalize on its user base through online advertising, it has made significant progress, according to a person familiar with the matter.
Facebook has turned in five consecutive quarters of profits, under the accounting formula of EBITDA, or earnings before interest, taxes, depreciation and amortization, according to the source. Revenue is expected to increase at least 70 percent in 2009; the company is expected to be cash flow positive in 2010.
Venture capitalists have poured money into Facebook in several rounds of funding. In 2007, Microsoft bought a 1.6 percent stake for $240 million, which valued the site at $15 billion.
Many investors now call that valuation excessively high.
E-mail Verne Kopytoff at vkopytoff@sfchronicle.com.
Monday, March 30, 2009
Government Tax Foreclosure Properties
Investing in government tax foreclosure properties may be a lucrative investment. When a property owner fails to pay federal or state taxes, the government can place a tax lien on the property. This lien supersedes all other types of liens on the property so if the property owner does not repay the lien, the property is auctioned off.
How Tax Foreclosure Happens
Government tax foreclosure can occur whenever a property owner does not pay property taxes or income taxes. The Internal Revenue Service may place a lien on a home after failure to pay tax debt. When this happens, all creditors receive notification by the government that the lien is in place. This motion gives the IRS the right to all property - including the land, buildings and even an individual's car - as well as all accounts receivable in a business situation.
The tax lien can be removed from the property if the property owner satisfies his taxes due, which often includes fees and interest, or the IRS accepts a bond submitted by the property owner agreeing to pay the debt. When this fails to happen, the property enters foreclosure. Within a period of six months the property is seized and sold, liquidating it to pay the required taxes owed by the owner.
A similar situation happens when the property owner does not pay property taxes. The county or other government collecting property taxes place the tax lien. When the tax debt remains unpaid, the property is sold at local auction to repay the owner's debts.
Throughout this process the property owner receives several opportunities to become current on not only their tax debt, but also their mortgage payments or other liens on the property. To avoid foreclosure, these debts must be paid prior to the court ruling to sell the property. That ruling usually takes place up to 30 days prior to the auction of the property.
[edit]
Investing in Government Tax Foreclosure Properties
Purchasing government tax foreclosed properties is an option for investors. These properties are not often sold through standard procedures, but are auctioned off at local sales. Investors should do their homework to learn as much as they can about the property before investing in it.
* Be notified of properties entering government foreclosure. Watch local newspapers and court reports for notifications of foreclosures in the area.
* Arrange to view the property prior to the auction. This may be possible if the property owners have moved out.
* Be prepared to make a sizable down payment on auction day. A minimum of 10 percent down is often required to be paid either in cashier's check or through a letter stating funding availability.
* Know the market value of the property. Some investors work with real estate agents or research online to learn the value of the property prior to the auction to ensure they do not pay too much for it.
* Do not be outbid. Many auctions result in several bidders. In some cases, individuals are not permitted at the auction themselves. Rather, their real estate agent must handle the negotiation for them. Ensure your real estate agent is a HUD approved agent to ensure this is possible.
[edit]
Tips for Government Foreclosure Purchases
There are plenty of options available for those who wish to invest in government tax foreclosure properties. In many cases, these properties are highly valuable since the property is well cared for by the previous owners. In other cases, the property is in a state of neglect. For those hoping to buy an affordable home, these properties can be an ideal investment.
The following are resources for locating government foreclosures available throughout the country. Local and state governments may offer their own website or may mail out auction notices to those registered to receive them.
* HUD: The U.S. Department of Housing and Urban Development offers guidance on purchasing HUD homes, or homes acquired by HUD due to foreclosure. Property listings are available at the website.
* ForeclosureDeals.com: Use the services at ForeclosureDeals.com to locate government foreclosures going to auction.
* RealtyTrac: RealtyTrac is one of the largest online resources for foreclosures, including government tax foreclosures. Search for available properties nationwide at the website.
Initial Author: Sandy Baker
Recent Contributors: Tamsen Butler
How Tax Foreclosure Happens
Government tax foreclosure can occur whenever a property owner does not pay property taxes or income taxes. The Internal Revenue Service may place a lien on a home after failure to pay tax debt. When this happens, all creditors receive notification by the government that the lien is in place. This motion gives the IRS the right to all property - including the land, buildings and even an individual's car - as well as all accounts receivable in a business situation.
The tax lien can be removed from the property if the property owner satisfies his taxes due, which often includes fees and interest, or the IRS accepts a bond submitted by the property owner agreeing to pay the debt. When this fails to happen, the property enters foreclosure. Within a period of six months the property is seized and sold, liquidating it to pay the required taxes owed by the owner.
A similar situation happens when the property owner does not pay property taxes. The county or other government collecting property taxes place the tax lien. When the tax debt remains unpaid, the property is sold at local auction to repay the owner's debts.
Throughout this process the property owner receives several opportunities to become current on not only their tax debt, but also their mortgage payments or other liens on the property. To avoid foreclosure, these debts must be paid prior to the court ruling to sell the property. That ruling usually takes place up to 30 days prior to the auction of the property.
[edit]
Investing in Government Tax Foreclosure Properties
Purchasing government tax foreclosed properties is an option for investors. These properties are not often sold through standard procedures, but are auctioned off at local sales. Investors should do their homework to learn as much as they can about the property before investing in it.
* Be notified of properties entering government foreclosure. Watch local newspapers and court reports for notifications of foreclosures in the area.
* Arrange to view the property prior to the auction. This may be possible if the property owners have moved out.
* Be prepared to make a sizable down payment on auction day. A minimum of 10 percent down is often required to be paid either in cashier's check or through a letter stating funding availability.
* Know the market value of the property. Some investors work with real estate agents or research online to learn the value of the property prior to the auction to ensure they do not pay too much for it.
* Do not be outbid. Many auctions result in several bidders. In some cases, individuals are not permitted at the auction themselves. Rather, their real estate agent must handle the negotiation for them. Ensure your real estate agent is a HUD approved agent to ensure this is possible.
[edit]
Tips for Government Foreclosure Purchases
There are plenty of options available for those who wish to invest in government tax foreclosure properties. In many cases, these properties are highly valuable since the property is well cared for by the previous owners. In other cases, the property is in a state of neglect. For those hoping to buy an affordable home, these properties can be an ideal investment.
The following are resources for locating government foreclosures available throughout the country. Local and state governments may offer their own website or may mail out auction notices to those registered to receive them.
* HUD: The U.S. Department of Housing and Urban Development offers guidance on purchasing HUD homes, or homes acquired by HUD due to foreclosure. Property listings are available at the website.
* ForeclosureDeals.com: Use the services at ForeclosureDeals.com to locate government foreclosures going to auction.
* RealtyTrac: RealtyTrac is one of the largest online resources for foreclosures, including government tax foreclosures. Search for available properties nationwide at the website.
Initial Author: Sandy Baker
Recent Contributors: Tamsen Butler
Sunday, March 29, 2009
Getting the Best Mortgage Rates
Making sure that you get the best rates available is extremely important when taking out a home loan. The amount of money that you pay in interest can significantly impact the total amount of money that you pay over the life of your loan. Because homes are meant to be an investment as well as a place to live, it is important that you pay as little as possible to reap the full benefit of ownership.
However, getting the best mortgage rates isn't easy. You will need to have a good credit history to qualify for prime rates. A down payment, verifiable income, and a steady job are also contributing factors.
But qualifying is only half the battle. Mortgage rates can vary dramatically from lender to lender. You will need to shop around of you want the best deal.
The steps below will guide you through the entire process and provide you with the tips you need to secure a fair mortgage rate.
Step One: Your Credit
By law, you are entitled to one free credit report each year. It is very important that you take advantage of that right and pull your credit report before applying for a loan.
To get your report, go to the central site that has been established by the three credit reporting bureaus: Annual Credit Report.com. Here, you will be able to get instant access to your credit report at no charge. If you don't want to use the online form, you can also request your report by phone or by mail:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
1-877-322-8228
Once you have a copy of your report, look it over carefully for mistakes or negative information. If there are any blemishes that may be dragging down your credit score, do your best to get them fixed immediately. The better your credit score is, the better your chances are of qualifying for the best mortgage rates.
Step Two: Your Finances
f you are interested in applying for a mortgage loan, you will need to prove to mortgage lenders that your finances are in good order.
To start, you will need more money coming in than going out. Lenders will take a good hard look at your debt-to-income ratio and they will need to see that you can afford to take on the expense of a mortgage loan.
Having verifiable income and money in your savings account is also important. Lenders will want to see that you have the money for a down payment, or at minimum, money for closing costs. If you need to get together funds quickly, consider having a garage sale, picking up a second job, or selling a few items on Ebay.
Step Three: Finding a Lender
Though the first two steps are essential if you want to get the best mortgage rates, the last step is of almost equal importance. The lender you choose will determine how high or how low your [Mortgage Loan Rate | interest rates] are.
If you want to find just the right lender, you will need to shop around. Ask friends and family for a reference, speak to your local bank, and go online. Get quotes from at least three different lending institutions prior to making any decisions.
The mortgage process can be very exciting, and while it can be tempting to accept the first approval that comes your way, it will not help you get the best mortgage rates. Take your time and be smart. Your home purchase may be one of the biggest investments you ever make.
Initial Author: KarenS
However, getting the best mortgage rates isn't easy. You will need to have a good credit history to qualify for prime rates. A down payment, verifiable income, and a steady job are also contributing factors.
But qualifying is only half the battle. Mortgage rates can vary dramatically from lender to lender. You will need to shop around of you want the best deal.
The steps below will guide you through the entire process and provide you with the tips you need to secure a fair mortgage rate.
Step One: Your Credit
By law, you are entitled to one free credit report each year. It is very important that you take advantage of that right and pull your credit report before applying for a loan.
To get your report, go to the central site that has been established by the three credit reporting bureaus: Annual Credit Report.com. Here, you will be able to get instant access to your credit report at no charge. If you don't want to use the online form, you can also request your report by phone or by mail:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
1-877-322-8228
Once you have a copy of your report, look it over carefully for mistakes or negative information. If there are any blemishes that may be dragging down your credit score, do your best to get them fixed immediately. The better your credit score is, the better your chances are of qualifying for the best mortgage rates.
Step Two: Your Finances
f you are interested in applying for a mortgage loan, you will need to prove to mortgage lenders that your finances are in good order.
To start, you will need more money coming in than going out. Lenders will take a good hard look at your debt-to-income ratio and they will need to see that you can afford to take on the expense of a mortgage loan.
Having verifiable income and money in your savings account is also important. Lenders will want to see that you have the money for a down payment, or at minimum, money for closing costs. If you need to get together funds quickly, consider having a garage sale, picking up a second job, or selling a few items on Ebay.
Step Three: Finding a Lender
Though the first two steps are essential if you want to get the best mortgage rates, the last step is of almost equal importance. The lender you choose will determine how high or how low your [Mortgage Loan Rate | interest rates] are.
If you want to find just the right lender, you will need to shop around. Ask friends and family for a reference, speak to your local bank, and go online. Get quotes from at least three different lending institutions prior to making any decisions.
The mortgage process can be very exciting, and while it can be tempting to accept the first approval that comes your way, it will not help you get the best mortgage rates. Take your time and be smart. Your home purchase may be one of the biggest investments you ever make.
Initial Author: KarenS
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