A mortgage prepayment penalty is basically a charge for paying off a mortgage within a certain period of time either through refinancing or selling the home. Prepayment penalties are often assessed as a percentage of the loan balance or a certain number of months of accrued interest. Continue reading
Balloon payments aren’t really too common in the mortgage marketplace these days, but you still may come across them – particularly if you’re shopping for second mortgages or niche jumbo or private investor mortgages.
Most standard mortgage programs that you get from a traditional mortgage lender or bank, like conventional conforming, FHA, or VA loans, won’t have balloon payments, so it’s likely you won’t need to worry about this.
There are a lot of great tax benefits that come with owning investment real estate, but one of the best is rental property depreciation. With most rental property expenses, such as mortgage interest, management fees, maintenance, etc., you only get the deduction after you pay the expense. Continue reading
Are you looking to purchase your first home in the near future? Congratulations! Becoming a homeowner for the first time is a big and exciting step! Not only will you enjoy pride of ownership and the ability to decorate as you please (something you don’t get to do when you rent!), you’ll also enjoy the financial benefits of home ownership, such as building equity and the mortgage interest tax deduction. Continue reading
One of the most difficult things for new house flippers to master is how to make an offer on a house. Often times newbie investors will locate a great property with profit-earning potential. However they lose the property to more experienced house flippers, because they did not craft their offer in the most effective and attractive manner.
Structuring your offer for success is becoming increasingly important, because it seems like the best deals are being swept up much quicker today than just a few months ago. The market out there is highly competitive, with many investors bidding on the same properties. Continue reading
There’s been a lot in the news in recent years about the incredible decline and bankruptcy of the once great city of Detroit. It’s hard to believe that a major American city, and one so prominent in American industry and prosperity over the last 100 years, could end up looking like this. Could Detroit rise again? Maybe, but it’s going to be a long, long road.
Entire sections of the city (that haven’t yet been razed) are literally in ruins - in the same fashion that the ancient city of Ephesus is in ruins. There are many neighborhoods where the police won’t even patrol anymore; the unfortunate residents that still happen to live there are completely on their own. Great libraries, schools, and theaters that once hosted a vibrant citizenry are now silent and in decay. Continue reading
If you’ve recently applied for a mortgage and have an existing home equity line of credit (HELOC) against the property, you may have heard your lender mention the term HCLTV, or home equity combined loan-to-value, or high combined loan-to-value. So what is HCLTV? Why does it matter when you’re applying for a mortgage?
HCLTV only comes into play when you’re financing a new first mortgage concurrently with a new HELOC or an existing. Lenders look at it because they want to determine risk from both existing debt and any additional future debt that could be incurred on the HELOC. Continue reading
Forbes is reporting that big changes are in the works for the most popular reverse mortgage program today: the Home Equity Conversion Mortgage, or HECM.
The Senate passed a bill this week (which already passed the House) that authorizes the Federal Housing Administration (FHA) to make changes to the HECM program without having to go through the long and cumbersome process of public review.
It’s expected that the president will sign the bill into law in the very near future. Continue reading
It’s no secret that mortgages can be expensive. If you’re purchasing a home, you’ll not only need to bring in your down payment, but you’ll probably end up paying a good amount of closing costs too. If you’re refinancing, you may find that thousands of dollars are being rolled into your new loan balance to cover a variety of closing costs. One particular closing cost borrowers commonly ask about are origination fees. So what are origination fees exactly? Read on and I’ll explain. Continue reading
If you’re planning on financing investment property in the near future, make sure you don’t forget the reserves. Showing that you have reserve cash in the bank is an essential part of investment property financing these days, so you want to make sure you have it lined up before you apply for the new loan. Continue reading