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Dirt is Good: Raw Land as a Wealth-Building Vehicle如何購買投資土地 (吳佳瓊 Alice Wu)
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Quote 大話羚羊谷(一) 吳佳瓊 Alice 2 December Choosing the best mortgage now
Help with the loan huntNEW YORK (CNNMoney.com) - If you're looking for a loan, it's a very scary time. Interest rates are on the rise and with them, mortgage delinquencies are increasing. In today's top 5 tips we're going to tell you what you need to know if you're out shopping for a loan. 1. Don't believe everything you hearBanks have been bending over backwards to offer mortgages to consumers with low introductory rates, teaser rates and all kinds of mortgage products from jumbo loans to hybrid adjustable rate mortgages. But these products are not always a good thing. One class action lawsuit filed in Milwaukee on behalf of homeowners says they were misled by lenders. They believed they were locking in a mortgage rate of 1.95 percent for five years. Instead the lock only lasted for 30 days. They face a rate ceiling of 13 percent. The lesson here is that, if the terms of the deal seem too good to be true, it probably is. 2. Know what it all meansAs you know, your credit report basically determines how loan-worthy you are, and the report is based on your credit history. That includes how many credit cards you have, how well you make you payments, your debt load, your available credit and whether other lenders have inquired into your report. Your credit score is based on your credit report. So, of course, the higher the score, the better your credit rating is. And the better your credit rating, the more favorable loan rates you'll get. So if you're looking to buy a car or take out a mortgage, you'll probably get a better interest rate if you have credit is above 620. Most credit scores range from 300-850. 3. Trouble ShootOne out of four credit reports had errors serious enough to deny the consumer credit, according to a study by the US Public Interest Research Group. That's why it's so important monitor your credit report. Yet only 10 percent of Americans check their reports annually, says Steve Rhode of Myvesta.org. Go to www.annualcreditreport.com or call or call 1-877-322-8228 to get more information on your report. This way you'll be able to identify mistakes or missing information plus you'll be able to catch any fraudulent activity. But you'll have to pay more to get your actual score. To get an estimate of your score for free, check out bankrate.com's Web site under calculators. To figure out what interest rate you're likely to be offered with that score, go to www.bankrate.com and click on compare rates and home equity. 4. Fix your scoreIf you have discovered an error in your report contact your credit bureau. Get more details about your rights from the FTC at www.ftc.gov/os/statutes/fcrajump.htm. When you receive your report, you should by law also receive a fact sheet detailing all your rights. Generally, negative information more than seven years old cannot be reported But if that debt is indeed yours, paying your bills on time is one of the most important steps you can take in cleaning up your credit, says Greg McBride of Bankrate.com. That alone counts for 35 percent of your score. Make sure your debt load is not more than 50 percent of your available credit. Allen Fishbein of the Consumer Federation of America says that often people close down their credit cards to decrease the amount of credit they have. But this lowers your credit limit making your debt to credit limit ratio increase. And do not transfer your debt onto that 0 percent introductory interest rate credit card. "That is a marketing tool," says Rhode, "Not a personal finance tool." If you don't pay off your balance within the introductory period, your interest rate could zoom into the double digits. 5. Your lender doesn't have your backTwo years ago congress passed a law that said lenders must notify consumers when their credit scores have negative information that triggers a less favorable rate quote. Guess what? Affected consumers still haven't gotten their letters. The FTC has not even issued the date for when this policy will go into affect. The point is that you should be vigilant against negative marks on your credit report. 23 November Talking about Be Creative But Watch That Risk!
Quote Be Creative But Watch That Risk! 6 Strategies for Saving Money on Your MortgageThe key to saving money on your mortgage is to get the best possible mortgage for yourself. Sounds so obvious it's silly, right? But the point here is that you don't need to do it the way everyone else does. In fact, if you're willing to educate yourself in the ways of the mortgage world, you can save quite a bit of money by being a little different. Below we introduce you to some of the strategies that other Fools have used. But remember, the only person who knows if it's right for you is you. The 6% Solution There is something called a seller concession that can save you money. It works like this: suppose you agree on the price of the house at, say, $200,000. You then ask the seller for a 6% seller concession. What this means is that you add (up to) 6% to the price of the house. That's right, you're now going to pay $212,000 for that house -- but the seller is going to give you that $12,000 back when the sale takes place. You're going to use that money to cover all of your closing costs.
If we pretend for a moment that those costs add up to precisely $12,000, then what you've done is folded those closing costs into the mortgage. Points, title search, recordation fees -- all of the items that you'll find listed in our "closing costs" article, and most of which are not tax-deductible -- have effectively been included in your mortgage. Since your mortgage interest is tax-deductible, these costs have effectively become tax write-offs. In addition, you don't have to come up with all that extra cash at settlement. Your down payment will be somewhat higher, (if you're putting down 20%, then in the current example your down payment would be $42,400, versus $40,000) and, of course, your mor tgage payments will be higher, but it ends up saving you money. The seller has no reason to refuse this -- after all, the agreed-upon price is still the same. What's the catch? The catch is that the house has to appraise for the higher value. If the appraiser comes back and tells you that this house won't appraise for higher than $200,000, you can't do it. Let's look into this a little further. Say you buy the house for $200,000. Your $40,000 down payment leaves you needing a loan for $160,000. You get a 30-year loan at 8%. Your monthly payments for principal and interest are $1,174. Now say you decide to use the 6% seller concession strategy. You buy this house for the price of $212,000. You put down 20%, and this leaves you needing a loan of $169,600. Your monthly payments will be $1,244, or $70 more per month. Is it worth it? To begin with, many people aren't going to feel an enormous difference between paying the extra $70 per month -- not nearly as much as they would feel over having to fork out an extra $12,000 all at once. But what about the fact that you have to now pay this extra money over the course of 30 years? Well, over the course of 30 years you're paying $25,200 more for that extra $12,000 ($70 more per month x 12 months in a year x 30 years = $25,200). However, remember that's $12,000 less out of your pocket at the time of closing. If you take $12,000 and invest it at 10% (less than the market average has returned over the past 35 years) then your money will grow to over $200,000 (before taxes) at the end of 30 years. So, in this scenario, it's well worth it. Naturally you'll want to run the numbers for your particular loan to see whether it would be worth it for you. Note: there are certain rules under certain mortgages as to what the seller can actually pay for at closing. If you get $12,000 from the seller and all of your costs are $12,000, this does not necessarily mean that you won't have to pay anything. Be sure to ask your lender which costs the seller may cover. Assume an Existing Mortgage One option is to assume the mortgage on the house you are buying. (That's another way of saying you'll take over the existing mortgage on the house, rather than getting a new one.) This is beneficial if, for example, the existing mortgage has a lower inte rest rate. You can also avoid some of the administrative costs of taking out a new loan. In order to assume a mortgage, it must be transferable, and you must be able to pay enough cash (or get a second mortgage) to cover the difference between the purchase price and the outstanding debt. Seller Financing "Seller financing" means that you can pay the seller directly over a period of time, rather than borrow money and pay at once. With a seller mortgage, you can often negotiate a better interest rate and avoid the various administrative fees charged by lending institutions. Seller financing can be attractive if for some reason you can't qualify for a loan. More importantly, it enables you to avoid the dreaded mortgage insurance. One circumstance in which such financing is available occurs when the seller has had difficulty in selling the house. If that's the case, you'll naturally want to know why. Also, sellers are not in the lending business. They tend to want a short-term mort gage -- usually not longer than three years. After that time, you will have to get a mortgage from a regular lender and pay the seller in full. There are other reasons why a seller might want to provide financing. It gives him a steady stream of income and return without having to pay capital gains tax. The seller also has collateral -- the house. If the buyer defaults, then the seller can take the house back. Play With the Points, Play With the Time Yes! You see? Mortgages are just like basketball! Depending on the mortgage, the strength of your finances, and the interest rate environment, it might be to your advantage to pay off the interest or principal sooner than you might otherwise. Check out our calculators to find out if you should pay points or take out a 15-year mortgage instead of one for 30 years. Pay Down the Principal For a very long time, most of the money that you will pay to your mortgage company is going to go to interest payments. That means that you may be in your house for over 20 years before you own more of it than the bank does. But there's a way to speed up the amount that you own. And why is that important (other than the obvious psychological benefits)? Because if you owe less to the bank, you will also owe them less interest. Click on over to our Foolish calculator to find out how it works and to see if it will work for you. Be Your Own Best Advocate Mortgage lenders must compete for your business. That means they will negotiate. Don't assume that their published interest rates are final. Collect information on available interest rates and mortgage features from lenders in your area. Decide which features meet your needs. Be prepared to ask for better terms -- a reduction of at least a quarter percent of the published interest rate is reasonable. You will be in a stronger negotiating position if your credit history is good. Lenders will also ask you how much you're prepared to put down. Let's take a look at the down payment next. How Much House Can You Afford?Experts say you will typically spend about a third of your income on financing your home. Before you start to look for your dream house, you should figure out just how much of that dream you can afford.
Mortgage lenders look at your ability to repay the mortgage loan by reviewing:
For details on checking your credit history, see the Bankrate.com Home-Buying Tip Planning is the key to a successful home purchase, said Doug Anderson, a member of the National Association of Mortgage Brokers. The Denver, Colo., broker says in today's market interest rates are low, but real estate prices are high.
"You should pay off as much debt as you can before shopping for a house," said Anderson, such as car loans and credit card bills. "And try to save a couple of hundred dollars a month for the down payment to bring down the loan amount." General Guidelines You can easily determine how much house you can afford by following a few general guidelines:
Example Let's take a homebuyer who makes $40,000 a year. The maximum amount of money available for a monthly mortgage payment at 28 percent of gross income would be $933. However, the lender says the total debt payments each month should not exceed 36 percent, which comes to $1,200. The following chart may help you see what is your maximum monthly debt loan based on your annual gross salary: Gross income 28% of monthly 36% of monthly $20,000 $467 $600 $30,000 $700 $900 $40,000 $933 $1,200 $50,000 $1,167 $1,500 $60,000 $1,400 $1,800 $80,000 $1,867 $2,400 $100,000 $2,333 $3,000 $150,000 $3,500 $4,500 Taxes and Insurance There are a few other considerations to compute when deciding how much home you can afford:
Calculator Armed with the above information, check out the Bankrate.com calculator, How much house can you afford? Note: The calculator asks if there is any mortgage insurance. See the section on private mortgage insurance (PMI) for more details. Buy, Don't Rent, When You Can Afford the Down PaymentAfter looking at all the costs involved in buying house, you may have begun to have second thoughts: Perhaps, it is better to rent a home.
Real estate in most areas today is not a top investment compared with investment securities. "You're not going to get a 30 percent return on your house," said Steve O'Connor, senior director of residential finance at the Mortgage Bankers Association of America. In the past decade, people have been advised to think of a home "as shelter not investment" O'Connor said. "Wealth accumulation is secondary."
Still, as shelter, most experts say if you can afford the down payment, it makes sense to buy your home rather than rent it. That's because you can deduct mortgage interest on income tax and build equity in your property. This is especially true when mortgage interest rates are low. Mortgage interest rates are deductible up to a $100,000 annual limit.
Example
A homeowner has a gross annual income of $40,000. The monthly mortgage payment is $1,000 on a 30-year mortgage. In the first few years, 80 percent of that payment goes to interest and is therefore tax deductible. In the 15 percent tax bracket, the homeowner saved about $375 more in taxes with the home provision versus with only a standard deduction.
Lease-Purchase Agreements
Some people take a middle road. They ease into homeownership by renting a house or condominium with an option to buy.
Homeowners who would agree to a lease-purchase option include people who have had property on the market longer than they wish or owners who had to move and want the house to be lived in. The owner benefits with rental income to help pay the carrying costs of the home, and the strong possibility of selling the house when the contract expires. Talking about Truth About Refinancing
Quote Truth About Refinancing |
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