The Return of Second Home Buyers and Real Estate Investors

According to the National Association of Realtors, vacation home sales increased, and their numbers are even higher than the sale of primary residences. As per their report, vacation homes sales have increased by 7.9%. Primary residence property sales, on the other hand, have increased only 7.1%. Right now, people who are buying these residences in the Colorado Springs or Denver area are buying because they wanted a vacation home. The numbers have spoken: the investment property sales decreased by 15.9% across the country.

Lawrence Yun, Chief Economist of the National Association of Realtors, said and I quote, “The typical vacation home buyer is making a lifestyle choice, with 9 out of 10 saying that they intend to use the property for vacations or as family retreat. Investment buyers primarily seek rental income, with 6 in every 10 people planning to rent to others, although 1 in 5 wants a family member, friend or relative to use the home.”

Are you interested in buying a second home? Will you use that home to make more money as an investment property or would you use it as your family getaway home? No doubt, you will get to see and find beautiful, affordable propertieds available for you to buy. This is actually the reason why a lot of people are considering buying this property.

Second home buyers are quite popular investors. Most of these people are looking for vacation properties to invest in. This is why cabins and resort community homes are in demand. Most of these properties are low priced due to foreclosure. If you think you are the only one looking for these kinds of properties, think again. There are actually a lot of investors looking to invest in properties like these.

If you want to have an in-depth knowledge of these things, contact your mortgage lender. They can give you all the information you will need and provide you with all the mortgage tools you can take advantage of. They can give you access to an all-inclusive mortgage calculator that will give you the details you will need to be able to get a home loan for a second home. Now is the perfect time to start investing. Start moving now and get your getaway vacation home!

Rent vs. Buy – How Low Interest Rates Make Home Buying Attractive

Is it Better to Rent or Buy?

Always take your time to consider each of your options for purchasing a new home. On the other hand, people who are planning and capable of buying properties can tell that the interest rates are at their lowest ever. What does this mean to you? It simply means that precisely anyone looking can get an affordable home loan.

How ready are you to buy?

A very common question we hear most of the time in this scenario would be “is this the right time to buy?” Well, make sure that you consider all your options before making a decision. At this point, you should think of the rent vs. buy circumstances. Think of the whys. Think of your very own reasons of why now is the perfect time for you to invest.

Consider this:

• At this time, the interest rates are very low. These are the lowest they have ever been and it is unlikely they will not go down any further.
• At this time, lenders are searching for qualified, serious buyers. This simply means that they are willing to give you flexible payment terms should they know you are looking for affordable loans.
• Mortgage Lenders are very much willing to offer the best deals, top quality loans with a diversity of features and terms, to those who have good credit standing. People who think they have quite bad credit should not worry though, because there are lenders willing to offer bad credit loans as well.
• Areas like Colorado Springs and Denver can be considered buyer’s market. There are quite a lot of available properties on the market and surprisingly, they are very affordable even when they are in well established vicinities.
• You can find either FHA loans or VA loans available, which will definitely make your home buying more affordable and easy on the pocket.

Decision Time

When it comes to the decision making part of renting vs. home buying steps, most people start to get confused. Mortgage tools can help answer questions and help identify options available for you. Yes, there even is a rent vs. buy tool available. This is like a compare and contrast tool. It lists down the amounts that can be spent when you lease a property compared to the costs of paying monthly for buying a home. There are a lot of people who find it very easy to use these tools, and this is a good eye opener to those who think they cannot afford to buy their own property yet.

Always, always make sure that you check out all your options before making a decision. Take a look around and you will see that there are indeed quite a lot of cost effective options that will really help you out.

A Good Way to Buy a Home – Short Sales

Three Steps to Securing a Short Sale

A short sale happens when a property is sold way below its market value, so low that it can be considered worth a lot less than its original value. This happens when the homeowner wasn’t able to pay his monthly payment causing the value of the property to decrease. When this happens, the bank that financed the purchase of the home will agree to sell it at a lesser price – to shun foreclosure and extra expenses. Short sales actually give home buyers the chance to buy home cheaply. But always remember that you will only be able to make the most out of it when you know what you’re doing or if you have someone to guide you.

Who has the Upper Hand in Short Sales?

Honestly, short sales are considered infamous since everyone has something to lose. The owner obviously will have bad credit since he isn’t able to pay his monthly mortgage. However, it isn’t as bad as having your home foreclosed. Also, the owner is relieved of debt. The lender on the other hand loses money, but won’t be obliged to go through the legalities and expensive costs of foreclosure. The new home owner, or the buyer, will own a house for much less, although it will need some work. The question now is how can one find a good deal on a short sale?

Step 1: Looking for a Home

When looking for a cheap home to buy, first check the houses in the area that are deemed to foreclose. There are listings everywhere – real estate agencies, your local courthouse, or even online home builders. By using home finder tools available for you, research and know the amount that is owed on the property you are eyeing. Study it and verify if the value indeed went down. The trick here is not to get the home which owes the cheapest amount. It is better to get the property which owes the biggest amount. What does this mean? Obviously, if there is still a huge amount owed, it signifies that the property is quite new. These homes also have owners that have difficulty making payments.

Remember: low value + high mortgage = best short sale option

Step 2: Approaching the Owner

Always make sure that you know the liens and mortgages of a certain property. Of course, the best, most accurate way of doing it would be talking to the owner. Ask the seller if there is a possibility that the property will have a short sale. As opposed to foreclosure, they will be more than happy to entertain you. Define to yourself how much you are willing to spend for the property and where you will get financing. If the lender agrees, the short sale will most probably go through real quick.

The owner should prepare a letter of authorization allowing the lender to speak with you about the loan. It is also required for them to make a letter of hardship and have the bank authorize it. This letter should explain why they can no longer afford the monthly payments. With this letter, you should also include some proof of reasons. When you speak with the lender, make sure you bring these things.

Step 3: Contacting the Lender

When you are interested in buying a property in a short sale, contact the lender. Talk to your agent or the bank to help you with the transaction and make the offer. It is a lot beneficial to have someone experienced to take over the legal stuff and documentations you might need for a short sale. You will be asked to fill out the short sale application from the lender. Bring with you a purchase contract that is signed by the seller and you altogether which states your agreed price. Don’t be so sure, however, that the seller would actually just go ahead and agree with the price you are offering. So to make your chances better, present them with a proof of your income and an offer they cannot reject. Most possibly, they will accept this offer just to avoid the hassle and costliness of foreclosure.

The lender can make a counter offer. In this case, you should expect it. When you make your initial offer, keep in mind your limits. Have a set maximum dollar amount you are willing to spend and if they don’t agree with it, then be ready to walk out. If they accept it, good. You will get to have the house you want at a very low price.

The Top 5 New Home Purchasing Tips

Now is the perfect time to dip your toes in the real estate market and purchase a home. Not only are the interest rates low, but the market is heavy with an astounding amount of homes ready for your choosing. However, before you begin your search, the following tips are sure to help you get ready:

1. Determine How Much You Can Afford:

Before beginning your home search, review your finances and know exactly how much you can afford to spend. Take a look at your monthly income and expenses to determine how much of a down payment you can put down. Don’t forget to factor in real estate taxes and insurance.

2. Work with a Professional:

Select a reputable and successful real estate agent. Not only will they be able to send you homes directly from the Multiple Listing Service, but they can also save you time in your search by weeding out homes that are out of your parameters.

3. Get Pre-approved:

Before you begin looking at homes, speak to a lender and get pre-qualified for your loan. This will help you to find out exactly how much money a bank will lend you and will also come in handy when it’s time to negotiate a price. Educate yourself on the type of loan programs and interest rates that are out there to see which would best suit your family’s needs.

4. Time to Shop for a Home:

Now that you’ve gone over your finances, selected an agent to represent you and have gotten pre-approved, you can start searching for homes. Several factors come in to play like choosing a single family, townhouse or condo; the neighborhood you would like to live in; do you want new construction or a home and area already established; what are the school districts associated with the home? Make sure the real estate agent knows your criteria so you don’t waste any time.

5. Negotiate the Price and Close the Deal:

Once you’ve found the perfect home, it’s time to negotiate the price of purchase. Your real estate agent can give you all the tools necessary to make a fair offer based on homes that are on the market and what they have currently sold for. After you’ve negotiated the price and terms of the contract, hire a reputable home inspector to take a look at the home and determine if it is safe and sound for purchase. Have your real estate attorney thoroughly examine all contracts for your protection. Once your mortgage commitment has been approved, you will be able to close on your home and begin the dream of home ownership.

What Questions to Ask When Moving From Renting to Buying Your First Home

The Big Question Renters Ask

When someone has been living in a rental home or apartment for several years, it is easy for him to question the age-old wisdom that says buying a home is wiser than renting one.

Here is the way the question is normally asked: If I buy a house and take out a 30-year mortgage, paying interest for several years, all repairs and utilities, while forking out another 25% in local and state taxes, caring for my own lawn and landscape, then tell me again, why should I buy a house instead of renting one?

Add to this question another: And, what if I have to relocate in five years, unexpectedly, and I get stuck with a mortgage in one town and have to commit to a new rental payment in the other?

The Questions a Home Buyer Asks

People who have already wrestled with these questions, yet have concluded that buying a home is the smarter way to go, would pose another set of questions to the intractable renter:

• Why would you want every penny of your housing money going into someone else’s pocket? Wouldn’t you rather be able to recover most of it, and, perhaps, increase your net worth by buying a home instead?
• What if your apartment building changes hands and the next owner lets the property fall into disrepair?
• What if you sign a one-year lease on an apartment and then find out your company is moving you to another state? Will you be able to sublet your apartment to someone else when most contracts disallow it?
• What if you need to expand your dining room or improve your kitchen? The home is not yours, so how are you going to pull that off?

The Common Misconceptions of Buying a Home

Transitioning from renting to owning follows the logical sequence of the questions posed above. Sometimes, owning does not make sense until a renter has become an owner and experiences the freedom and assurance of having a place he can call his own.

The belief that all the taxes, upkeep and economic woes are reasons enough to keep losing 100% of their housing money to the landlord is, at best, skeptical. Considering the economic downturns, even the worst case scenario for a home owner is the possibility that his house will be devalued over time. However, the loss will be nowhere near the 100% that a renter experiences every month he makes his payment.

The history of home ownership bears out the wisdom of investing in a house rather than paying to use someone else’s. Economic downturns are temporary; the freedom of owning lasts a lifetime.