Filed under: News, Advice, Foreclosures, Investing, Lifestyle

AOL Real Estate asked Utah-based real estate investors Doug Clark and Mike Bard, whose show “Flip Men” premieres this week on Spike TV, for tips on how to flip a foreclosed home. Here’s what they had to say to novice investors:

1. Pick a property that is well within your means.

Don’t allow yourself to get too overextended on the property. Way too often, we have seen people show up at a foreclosure auction and then after one bad deal, their own house is in foreclosure. Everything will take more time and money then you anticipate, so don’t bite off more then you can chew.

2. Prepare to break in.

Foreclosed homes don’t come with keys or contracts. It is up to you to find a way in. Our favorite methods are: Slip the lock with a credit card, lift a window, lift the garage, put your hand through a doggy door and unlock the door from within, climb on the roof and look for an open window.

Get creative and have fun with this step! If you want a set of keys to your new property you need to make your own or call a locksmith and pay $150 to get the job done. Make sure you research the local laws regarding abandoned property. You may have to store any items you find in the house for a period of time before they are yours. Former owners almost never come back for their items, so it’s not out of the question to find cash, furniture, collectibles, firearms and even vehicles.

3. Check everything.

Most foreclosures were abandoned. These homes have many issues, so check all the systems thoroughly. The last thing you want is to find out that the roof is bad or the furnace needs to be replaced the day before closing.

A great tip: Speak to the neighbors. You would not believe how much they know about the houses around them. Don’t avoid disclosing bad news with the house, because the people you sell to will notice everything. Budget for contingency items because they are always there, especially in foreclosures.

4. Tour other houses for sale.

Take an afternoon and tour two or three homes similar to the one you hope to flip. This is your direct competition, so view it that way. How is the curb appeal, paint colors, smell, clutter, layout, backyard, etc. This is especially important if you are new to the business and don’t have the same reference points that a professional flipper does.

5. Price aggressively.

It’s easy to overprice a listing, it’s difficult to under-price one. If you under-price the property, you will get a lot of attention and showings fast, and people will compete for the house. Set the price to move. If you are not getting showings and no one is calling to see the house, then it is priced too high. If you are getting a lot of attention and people are walking through but no offers are being made, then the price is right, but there is something wrong with the house. Call the agent for details and don’t be afraid to ask why the buyers are passing on your house.

Also see:
Mansion or Meth House? Flip Men Want to Know
Viewpoint: Feeling Guilty About Buying a Foreclosure?
‘Mortgage Prof’: 5 Reasons Banks Would Rather Foreclose
Tempted to Invest in Real Estate? Read This First

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More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.

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Source: http://realestate.aol.com/blog/2011/10/25/5-foreclosure-flip-tips-from-the-flip-men/

recording prepayment penalty

Filed under: News, Refinancing

WASHINGTON — Mortgage rates have reached their lowest levels in six decades, making this the best time in most Americans’ lives to buy or refinance a home. For people who qualify, today’s rates could save thousands of dollars a year.

Yet most people can’t take advantage. Half of would-be buyers say they’ll never save enough for the 20 percent down payment now usually required. And shrunken home values have erased much of the equity that people need to refinance.

“Low rates are great, but the real issue is that the pool of people who can get a loan or refinance is small,” said Greg McBride, Bankrate.com’s senior financial analyst.

This week, the average rate on a 30-year fixed mortgage fell to 4.12 percent. It’s the lowest for a 30-year fixed loan since mortgage buyer Freddie Mac began tracking rates in 1971. The last time rates were cheaper was in 1951, when most long-term home loans lasted just 20 or 25 years.

The average on the 15-year fixed loan, a popular refinancing option, dropped to 3.33 percent this week. That’s also an all-time low, according to most economists.

Browse through photos of millions of home listings or search foreclosure listings

Record-low rates have done little to energize depressed home sales. The average rate on the 30-year fixed loan has been below 5 percent for all but two weeks this year. Yet sales of previously occupied homes are on pace for their weakest year since 1997.

Too many would-be buyers can’t come up with a down payment, don’t have a job, lack enough income or are burdened by large debt loads.

Mortgage rates are low largely because investors are worried about the U.S. economy. As a result, they’re moving their money out of stocks and into U.S. Treasurys. Mortgage rates tend to track the yield on the 10-year Treasury note, which touched an all-time low this week.

A drop in mortgage rates could provide some help to the economy if more people could refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.

Consider a homeowner who owes $250,000 and is paying 5.09 percent on a 30-year fixed mortgage. That was the average rate on a 30-year fixed loan being offered in January 2010. Refinancing the loan at 4.12 percent could save him or her roughly $2,000 a year.

But many homeowners with good jobs and stable finances have already refinanced in the past year. The average rate on the 30-year fixed loan fell to 4.17 percent last November, and to 4.15 percent last month. Both were previous lows.

Homeowners typically pay a few thousand dollars in closing costs when they refinance. To refinance again, most experts say, rates would need to fall an additional 1 percentage point to make it worthwhile.

Still, plenty of people could benefit from the low rates. More than 75 percent of homeowners with a government-backed mortgage are paying rates above 5 percent.

But most can’t qualify. Mike Anderson, a mortgage broker in Baton Rouge, La., said he’s turning away roughly 40 percent of customers seeking home loans and refinancing.

“I’ve never had to turn down so many loans upfront,” Anderson said.

Banks are insisting that applicants have higher credit scores and make 20 percent down payments if they are a first-time buyer.

Roughly 40 percent of U.S. households have the necessary credit scores above 700 to get a prime mortgage rate, according to an Associated Press analysis of Fair Isaac Corp., or FICO, data.

But just half of potential buyers say they can save enough for a down payment, particularly one as high as 20 percent, according to a survey by the National Foundation for Credit Counseling.

Another problem is that nearly a third of homeowners either have less than 5 percent equity in their home or are “underwater” – that is, they owe more on their mortgage than their home is worth — according to the real estate research firm CoreLogic.

As a result, they can’t afford a down payment on a bigger home and can’t refinance because of lender-imposed limits and the cost of extra fees. The low rates now being offered don’t include such fees, which many borrowers must pay to get the rates. Those fees, known as points, make a mortgage rate, in effect, higher than it’s advertised.

One point is equal to 1 percent of the loan amount. The average such fee for the 30-year loan held steady this week at 0.7 point. For the 15-year fixed loan and for five- and one-year adjustable-rate loans, the average fee was 0.6 point.

Lack of equity is what’s keeping Don Meadows from refinancing. He owes $247,000 on a house in Orlando, Fla., and is paying 7 percent on a 30-year fixed loan. His monthly payment is $1,840.

If Meadows, 40, a sales manager, could refinance at today’s rates, he could save more than $400 a month.

But he has no equity in his home. He bought it two years ago for $274,000. It’s now worth $170,000.

“I couldn’t (refinance) even if I wanted to,” Meadows said. “Now, we just have to ride it out.”

Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

For more insight on mortgages, see these AOL Real Estate guides:

• Mortgage Jargon in Simple Terms
• How to Get a Low Mortgage Rate
• Want a Mortgage? Don’t Make These 8 Mistakes

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
See celebrity real estate.

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Source: http://realestate.aol.com/blog/2011/09/09/low-mortgage-rates-are-great-but-most-cant-qualify/

homeowners warranty comparable sales

Filed under: News, Renting, Credit

It’s probably safe to say that it isn’t having a new apartment that’s hard, it’s getting it. First, there’s the legwork, then there’s the scraping together a security deposit and first and last months’ rent. But for some people, it’s that pesky credit score that stands between them and the garden apartment with tons of light and the in-house washer and dryer.

So how can you start fixing your credit score before you find yourself crying as someone else closes on the affordable two-bedroom of your dreams?

1. What is a credit score?

A credit score is a number between 300-850 based on — primarily — a person’s credit history. The higher the number, the more reliable the renter. The credit score can be assessed by a landlord to reveal the likelihood that a potential renter will follow through on his or her monthly rental agreement.

2. Where does a credit score come from?

A credit score — also known as a FICO score (from the Fair Issac Corporation) — is derived by looking at five major categories (listed in order of the most to least heavily weighted): The renter’s payment history; what the renter still owes; the length of the credit history of the renter; how much new credit the renter has; and the type of credit the renter has used.

3. How does ones credit score go down?

When a renter does not make his or her credit or rental payments on time or they have racked up so much debt that they become unable to pay a re

See photos of apartments and homes for rent in your area on RentedSpaces

gular minimum payment, their credit score might be primed to plummet. Further, if a person is a new credit holder or if they are applying for multiple credit sources, they can expect their number to appear less than stellar to a landlord. But more than any of those, filing for bankruptcy can knock a renter’s score down up to 250 points and will stay on a credit report for 10 years.

4. What number does a landlord expect your credit score to be?

When a bank loans money, according to this recent Investopedia.com article, lenders consider anything above 770 a top-tier score and anything below 620 subprime. Landlords renting homes are — in some cases — willing to overlook a mediocre credit score if the would-be tenant is able to pay a larger down payment or get a co-signer.

5. So what can you do to raise your credit score?

o. Don’t Use Credit: It might sound obvious, but the best way to rebuild bad credit is to stop accruing debt. Cut up your credit cards and go back to paying with checks and cash. It might sound old fashioned, but it will help you in the future.

o. Make a Calendar: It’s easy in the throws of the day-to-day to forget a monthly bill or two – especially if there are five or six or more bills to pay off each month. So put it on your calendar or have reminders sent to your inbox. Even better, set up an automatic bill pay so you can’t forget.

o. Have Fewer Credit Cards: Another no-brainer – why overtax your pocket book with all that plastic? The more open credit cards you have, the lower your credit score will be.

o. Stay in Touch With Your Creditors: Make sure to devote some time each month to going over your monthly statements. Catch mistakes early and report them immediately. The more mistakes you stop in their tracks, the higher your score will be – and it will keep your interest from skyrocketing.

o. Pay More: Don’t just pay what you have to, pay more. If you overpay the interest or your minimum balance on your credit cards or student loans each month, you will be improving your overall credit. So look and see what you owe, then add fifty.

Your credit score isn’t the only thing in the way of a great rental, but it’s an important one. And the good news is, it’s never too late to make it the number you know you should have.

Want to know how to deal with other rental issues? Here are some AOL Real Estate guides that can help:

• Tips for Finding a Rental Apartment
  
• Apartment Security for Renters
  
• Are You Paying Too Much for Your Rental?

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Source: http://realestate.aol.com/blog/2011/01/26/renters-raise-your-credit-score-now/

no-cost loan refinance transaction

Filed under: News, Foreclosures, Refinancing

WASHINGTON — President Barack Obama is aiming mortgage relief at members of the military as well as homeowners with government-insured loans, the administration’s latest efforts to address a persistent housing crisis.

In his first full news conference of the year Tuesday, Obama was to announce plans to let borrowers with mortgages insured by the Federal Housing Administration refinance at lower rates, saving the average homeowner more than $1,000 a year. Obama also was detailing an agreement with major lenders to compensate service members and veterans who were wrongfully foreclosed upon or denied lower interest rates.

A senior administration official described Obama’s proposals to The Associated Press, ahead of the announcement, on the condition of anonymity.

The efforts Obama is announcing do not require congressional approval and are limited in comparison with the vast expansion of government assistance to homeowners that he asked Congress to approve last month. That $5 billion to $10 billion plan would make it easier for more borrowers with burdensome mortgages to refinance their loans.

Lower Refinancing Fee

Under the housing plans that Obama was to announce Tuesday, FHA-insured borrowers would be able to refinance their loans at half the fee that the FHA currently charges. FHA borrowers who want to refinance now must pay a fee of 1.15 percent of their balance every year. Officials say those fees make refinancing unappealing to many borrowers. The new plan will reduce that charge to 0.55 percent.

With mortgage rates at about 4 percent, the administration estimates a typical FHA borrower with $175,000 still owed on a home could reduce monthly payments to $915 a month and save $100 a month more than the borrower would have under current FHA fees.

Though 2 million to 3 million borrowers would be eligible, the administration official would not speculate how many would actually seek to benefit from the program. The FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. The loans typically go to homeowners who do not have enough equity to qualify for standard mortgages. It is the largest insurer of mortgages in the world.

Review of Vets’ Foreclosures

For service members and veterans, Obama will announce that major lenders will review foreclosures to determine whether they were done properly. If wrongly foreclosed upon, service members and veterans would be paid their lost equity and also be entitled to an additional $116,785 in compensation. That was a figure reached through an agreement with major lenders by the federal government and 49 state attorneys general.

Browse through photos of millions of home listings or search for rentals

Under the agreement, the lenders also would compensate service members who lost value in their homes when they were forced to sell them due to a military reassignment.

Obama is holding the news conference in the midst of a modestly improving economy. But international challenges as well as a stubbornly depressed housing market remain threats to the current recovery and to his presidency.

Obama has not held a full news conference since November. The White House scheduled this one on the same day as the 10-state Super Tuesday Republican presidential nominating contests. While aides insisted the timing was coincidental, it follows a pattern of Obama seeking the limelight when the attention is on the GOP.

The news conference comes amid a new sense of optimism at the White House. Obama’s public approval ratings have inched up close to 50 percent. The president recently won an extension of a payroll tax cut that was a main element of his jobs plan for 2012. Economic signals suggest a recovery that is taking hold.

Still, he will probably face questions about the pace of the recovery. The unemployment rate in January was 8.3 percent, the highest it has been in an election year since the Great Depression. With rising gasoline prices threatening to slow the economy, Obama has also faced attacks from Republicans over his energy policy.

Iran’s nuclear ambitions will also command attention in the aftermath of his meeting Monday with Israeli Prime Minister Benjamin Netanyahu. Tension over Iran has already contributed to higher oil prices, and Israel’s threats of pre-emptive military strikes to prevent Tehran from building a nuclear bomb have dominated Washington discourse for weeks.

Other developments in the Middle East, where turmoil has soured some of the promise of last year’s Arab Spring, are also likely to be addressed. Syria’s bloody crackdown on protesters has increased pressure on Obama to intervene. Republican Sen. John McCain on Monday urged the United States to launch airstrikes against Syrian President Bashar Assad’s regime to force him out of power.

Copyright 2012 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

Also see:
Only 5% of Underwater Homes May Qualify for Write-Downs
REO to Rental: Fannie Mae Dips Further Into Foreclosure Pool

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Source: http://realestate.aol.com/blog/2012/03/06/obama-mortgage-help-coming-for-military-fha-borrowers/

fixed-rate mortgage