Hidden Cost of Buying a Foreclosure House

June 3, 2008

Most real estate investors clap their hands with delight when they see a foreclosure home that is ready to move in. After all, a well-kept foreclosure home can be the deal of the lifetime.

Right now, there are a great deal of distressed homes on the market. Foreclosures can be a great deal for homeowners how are looking to buy a house. With the rise of foreclosures on the market, more and more foreclosure opportunities are available for real estate investors and home buyers. With this increase, there are more and more properties that are catching the eyes of investors and property buyers.

However, a startling new trend is starting in the world of real estate investing. Although many consumers and potential homebuyers are interested in seeing a foreclosure, the actual sales on these foreclosures can stall. Foreclosures make consumers nervous and jittery. Although people are willing to look at the foreclosed home, they are less likely to buy it with the inability to negotiate changes or upgrades with the property.

If you are considering purchasing a foreclosure, you need to know the hidden tricks to buying the property. A foreclosed property does not allow a home inspection or negotiations. If you have a wall in the kitchen painted in bright pink, you’re stuck with it. The bank wants to get rid of the foreclosure property and if you want to negotiate, they will just go with the next consumer who is interested in the property and not negotiating.

In addition, studies have shown that nearly 70 percent of future homebuyers know there are hidden risks and costs associated with a foreclosure. Some of these negative risks include the horror of the unknown costs, having the foreclosed home lose value or losing the purchase price entirely.

When should you consider buying a foreclosed home? If you are a real estate expert with substantial construction knowledge, you can feel assured that no matter what might come your way, you can handle it on your own. When you start requesting that professionals come to your home, the cost of labor will add up, making the savings that you earned in the purchase price disappear overnight.

If you have expert assistance in the real estate market, foreclosure homes can be a great choice. With the expert advice, you are less likely to lose your investment. Also, use this real estate knowledge to your advantage when you analyze the market and neighborhood that your foreclosed property is located within. If you can analyze current and last years home values, you can determine what you can hope to earn from your investment.

Getting a home inspection on your foreclosed home is imperative. You can find and reduce a number of the hidden costs up front when you have an inspector highlight the big problems immediately. Also, if there are any unique architectural upgrades, be sure to look at those thoroughly because these structural changes can be your biggest risk in the future.

If you are gong through a foreclosure on your house and thinking house can I sell my house fast to stop foreclosure, contact http://www.ExpertHomeOffers.com

 


What Type Of Mortgage You Should Get To Avoid Foreclosure

June 2, 2008

Unlike the last generation, there are a number of influences that can go into your mortgage payment. These different factors have contributed to some homeowners losing their property entirely. When some of these influences catch the homeowner unaware, they can translate into foreclosure and bankruptcy.

The biggest warning that financial investors give to homeowners now days is to avoid biting off more house than your financial future can swallow. After all, there is more in your future than just a mortgage payment. It’s time to plan wisely.

In the past generation, there was typically only one income supporting the bills and mortgage payment. When one spouse lost a job, the other one could quickly get a new job to help support the family. This generation, however, has built their mortgage payments on the idea of a two income family. Therefore, when one spouse loses their job, the family as a whole can quickly spiral into financial chaos and disaster. Planning for a more conservative mortgage payment at the closing can help to shield the family should a job loss happen.

How can you determine if you have too much house? Most financial advisors suggest that you make your mortgage payment no more than 28 percent of your total income. By following these rules, you are more likely to keep your home and be on time with your home payments.

In addition to keeping your home mortgage payments within 28 percent of your income, you will need to analyze the rest of your financial obligations in future years. For example, will you need to save for kids college funds? How much will you need for these financial requirements? What about your retirement? Are you building two retirement plans?

In addition, there are a number of hidden costs in home ownership. Things like home maintenance, repairs and Home Owners Association fees can add up, in addition to your usual costs like insurance and taxes. There are additional expenses that might come into play, affecting your home mortgage payment. For example, if you have an expensive hobby like traveling, you will want to free up more of your income for these expenses.

Your income or the income of your familys breadwinner can be a strong influence in how much of a house you should buy now. If you do not have a consistent income or see your income hitting a plateau or lowering in the future, this can be a significant influence for your mortgage payment.

Unlike the previous generation, the average workforce individual changes employers over the years. Through this fluctuation, income amounts can change, affecting your mortgage payments. Making your mortgage payments more conservative can help you save more money during the wealthier times and help you stay afloat during the leaner months.

If you do not have to worry about retirement or are completely debt free, rejoice. Few people fall into this category, but for those that do, the mortgage payment is a direct outcome. With less money paying the interest on credit card debts and car loans, the more money will be applied towards the home, building equity.

If you did buy a house with a large mortgage payment and are now finding that you can not afford the mortgage, maybe even needing to stop foreclosure, then contact you local home buyer. Local home buyers are professional real estate investors who buy houses from people just like you. You can get a free, no obligation offer for any house with in 24 hours. If you are thinking how can I sell my house fast, then you have nothing to loose.


1st Time Home Buyers Can Not Get Financing

May 29, 2008

From mortgages, interest rates and rising foreclosure numbers, a first-time home buyer has a lot more to think about than simply choosing a house he or she loves. Two of the biggest challenges – where to buy and how to get help for your mortgage – are covered in this article. Getting tips and strategies to jump over these initial hurdles can help to ensure that the first-time home buyer not only gets what he or she wants, but also ensures that they can hold onto it for years to come.

The first hurdle to tackle will be the mortgage. Before looking for a new home, the savvy first-time home buyer knows to get pre-approved for a mortgage and fully assess their financial situation. After all, you can fall in love with the most wonderful house on the block, but if you can’t afford it, you will either be financially vulnerable or facing a foreclosure in the near future – a fate no first-time home buyer wants to consider!

For the first time in quite a few years, government assistance is becoming popular with first-time home buyers. Many first-time home buyers snubbed or ignored government assistance during the real estate boom, preferring to look at a subprime mortgage for their financial needs. Alt-A and piggyback mortgages were also considered from private mortgage lenders who didn’t require a great deal of money for a down payment, nor did these lenders pay much attention to a credit score.

Just as the saying goes, however, if the deal seems to be too good to be true, it probably is. In the case of these subprime mortgage, when the real estate boom deflated, first-time home buyers who had been so appreciative of the subprime rates and loose regulations were now facing serious financial troubles. All the easy money dried up and in many cases, the homes went along with it.

Nowadays, first-time home buyers with little cash for a down payment or a short or poor credit history have nowhere to turn for mortgage assistance. The traditional routes of home lending have been re-established to put the market back on solid ground. What are first-time home buyers to do for financial assistance? Look towards government agencies like the FHA or Federal Housing Administration. The FHA is known to help find loans for individuals who have average credit and a down payment that is less than the required 20% of the purchase price.

Meanwhile, the U.S. Department of Housing and Urban Development can help first-time buyers with closing costs and with down payment assistance. In addition, the FHA’s assisted mortgages are set to potentially become even more affordable for first-time home buyers in the future as a response to the chaotic real estate boom.

Combine this help with mortgage next to the latest recommendations from realtors about which houses to avoid – and why. Studies have shown that three main factors can make selling your home difficult in the future and for first-time home buyers who will most likely upgrade in the future, these are important tips.

Avoiding environmental elements like landfills, noting the rate of foreclosures in the neighborhood and looking into the crime rate within the location of the new house can all have significant impact on the future of a first-time home buyers investment.

If you are thinking how can I sell my house quickly then contact ExpertHomeOffers.com


Will Lenders Pay for the Mortage Crisis?

May 18, 2008

If your community has been largely affected by the foreclosure rates around your home, you might be wondering how this could have happened and who will be held responsible for our real estate market mess. After all, someone must have foreseen the mortgage issues headed towards many of these former hot real estate markets. Why was nothing done sooner to prevent the huge losses?

In fact, many real estate market experts have been vocal about the negative impact of the mortgage loans. However, despite warnings, many novice homeowners or uneducated buyers have found themselves in financial quagmires that are impossible to solve. As foreclosures are rising and our economy slows, lawmakers are turning their attention towards the mortgage lenders who originally propped up the cards to watch it all fall down.

Specifically, a Senate subcommittee has been formed to investigate the possibility that mortgage lenders abused the bankruptcy code to file loans for individuals who would not have qualified for the money previously. By misusing the bankruptcy system, mortgage lenders and companies were able to impose high fees whose legality is questionable. In addition, these high fees and misuse of the bankruptcy system directly played into the foreclosure problems that many homeowners are currently facing.

In essence, the Senate subcommittee is looking into whether mortgage lenders and companies intentionally played towards people who were too ignorant or overwhelmed to truly understand what financial situation they were getting into. By concentrating too highly on the property, but underplaying the fine print in the mortgage loan, these institutions were blatantly acting fraudulently and requesting too much money from individuals who simply did not have it. Although the mortgage lenders were aware that they were placing a nearly-impossible financial situation on these homeowners, they are accused of not exercising ethic restraint by giving out these loans.

The Senate subcommittee will look into not only past actions by these mortgage lenders and institutions for penalties, but also increase the level of penalties given to those lenders who manipulate the bankruptcy law for their own financial gain – and consequent ruin of other investors.

Originally, bankruptcy laws were initiated to give homeowners with financial issues the chance to keep their homes. However, with the questionably high fees demanded by these mortgage lenders and institutions, the ability to pay off the home was impossible, despite the bankruptcy protection clause. For this reason, more and more people were permanently removed from their homes while certain mortgage lenders and institutions pocketed the money.

One reason for the subcommittee investigation comes on the heels of a sharp increase in foreclosure filings. With an increase of 112 percent since last year, lawmakers are concerned that the problem will grow even worse as many mortgages will be reset and increased this year, causing numerous people who are just barely hanging on to lose control completely. With these extra fees putting the homeowner in a worse position and having them fall even more behind, the mortgage institutions are under direct scrutiny over the legality of these fees and their execution.


Where the Real Estate Market is Currently Growing

May 15, 2008

Read an article on the real estate market lately and you will find little more than tales of gloom and doom. Recession impact, the falling dollar, real estate bubbles bursting the hot markets – the combination of all these factors are the culmination of real estate gurus warning of an inflated real estate market for years now. These fears and vocal warnings have impaired the real estate market, stifling housing sales and highlighting foreclosure problems for banks in communities nationwide.

However, despite the bad tales of the real estate market that abound in the news, there are plenty of areas that are growing, improving and seeing positive changes in their housing sector. Although much of the nation will be either stagnant or continuing to show a decline, these regions are growing, boosted by local economic factors that are shielding the community from a housing bubble catastrophe and giving local investors in these areas something to smile about.

Take McAllen, Texas for example. With a 12 month forecast of 4 percent increase, this area of the country is sitting on strong real estate possibilities. The five year price change for McAllen has been a steady 23.3 percent, giving this region a slow but steady outlook on their housing market. This Texas region might see the strongest positive return for their housing market, but there are other states that will have multiple cities with positive growth predicted in the next 12 months.

Rochester, New York is already a popular place for families, but with real estate prices seeing a strong 2.7 percent increase in the next year, Rochester is looking even more financially fantastic. With a 20.1 percent rate of increase over the last five years and an admirable 5 percent change in the foreclosure rate, Rochesters real estate market is looking ideal to many investors and families alike. New York in general seems to be avoiding the real estate crunch as cities like Buffalo and Syracuse are also predicted to see steady 2.4 percent and 2.6 percent increases respectfully in the area.

New Orleans has been predicted to make a strong step forward this year with a 2.2 percent increase in the real estate market. With a 49 percent rate of foreclosure change, it seems this personable city has found its feet after hardship and will start its inevitable climb to being an enviable place to own a home again. Nearby Baton Rouge has also enjoyed a 1.9 percent housing increase predicted. Combined with their lower 14 percent rate of foreclosure change, Baton Rouge and New Orleans combine to make Louisiana a preferred housing market.

With 75 of the top 100 U.S. cities expected to see falling real estate prices in the next year, these housing areas are anomalies. With record foreclosure numbers and plummeting prices, the fastest growing real estate markets are nothing to sneeze at. Many real estate experts are predicting the full impact of the real estate bubble burst will not be finished until 2010. Areas like California and Nevada are clinging to their homes, but if you happen to live in McAllen, Texas and other hot markets, rejoice. Your homes are steady throughout the real estate crisis.

© ExpertHomeOffers.com 2008


Home Inventory Continues to Climb – How Can You Sell Your House?

May 9, 2008

A recent survey conducted by a California based real estate company reported a 1.3 percent increase in housing inventory. These are houses that are for sale on the multiple listing service or MLS through the month of April 2008. The survey was conducted on 29 major metropolitan areas across the United States.

The results of the survey show a continued supply of houses for sale on the market in most major metro areas. This increase in housing inventory will further depress home prices. After all, the supply for homes has definitely not increased.

The major cities who saw and increase in the number of houses for sale hit the market were Austin Texas at 7.1 percent, Chicago Illinois with 5.9 percent, Boston Massachusetts with 5.6 percent and Philadelphia with 5.4 percent increase.

Interestingly enough Las Vegas, currently the capital of the foreclosure crisis saw a decrease in the number of homes on the market. This in contributed to many banks accepting shorts sales and selling homes on their books they receive from foreclosure. It is also contributed to the fact that Las Vegas has one of the fastest drop in home prices in the nation.

If you own a home in Las Vegas this news is like a double edge sward. You now may have a better chance of selling your house but you obviously will be selling for much less. In some cases 25 to 30 percent less than you could have sold last year. The good news is the news of a decreased number of houses for sale in your area could be a start of a real estate bottom.

Another interesting fact is the number of home owners who have dropped the sale price on their home. Of the 29 metro cities where the survey was conducted, Orange County California tops the number of homes who had a reduced sale price last month with over 49 percent of the homes dropping price. Other areas that top the home price reduction survey are Las Vegas Nevada, Jacksonville Florida, Bakersfield California, Las Angeles California, Miami Florida, Washington D.C. and Sacramento California.

If you do need to sell your house quickly I suggest you get in touch with a local real estate investor who knows your local market and can buy your house quickly. ExpertHomeOffers.com is a company who connects home sellers with professional home buyers. They have a very large network of real estate investors who are always purchasing homes and increasing their real estate portfolio.