You may think that finding that prefect home to turn a profit means spending all your life savings.  However, that’s not necessarily true. That perfect money maker may very well be a real bargain. Once you decide you’re willing to look for that special deal on a home you have to know how to spot the bargains that other people miss as stated in
www.fliphousesnow.com

The first thing you must know when trying to spot the real deals is to know that some areas will have better bargains than others. These may be the ones to reward you more in the future. It is all about timing and timing is key when looking for a deal because you must be ready when the opportunity arises. Checking out auctions is one of the best places to spot a bargain because many times there are circumstances involved which eliminate the long process of wheeling and dealing to obtain a good deal on the property. They need to sell quickly and there isn’t as much competition.

Another tip is to look for the properties which have been on the market the longest. In most cases that means houses that have been out there for more than 5 months. But always keep in mind that if it looks too good to be true than more than likely it is and that’s when you want to pay attention and look into the matter more closely. If you’re really interested in the property then it would pay you to hire an inspector to use his professional eye to check things out for you. Other than a flat market, there is usually a very good reason why a property isn’t selling or is being offered at a really low price as mentioned in www.fliphousesnow.com

So use all the tools available to you, whether it’s the media, your family and friends, a real estate agent or your own research to help you house hunt and you’ll be sure to spot the bargains that other people miss.

For properties homepath eligible – buyers have access to a minimum down-payment loan with no MI.

The number of first home buyers in the marketplace has dropped significantly, but according to Deanne Lamprey from First National Real Estate Burnie, there is still plenty of opportunity for first home buyers to realise their dreams of home ownership.

“Since October last year, market share for first home buyers has decreased from 26 per cent to 22.1 per cent currently,” Deanne Lamprey said.

“And the potential for escalating interest rates, which have now been on hold for three consecutive months, along with government taxes and high up-front costs may make things even harder for first time buyers to save for that ever-important, yet growing in size, deposit.”

Deanne Lamprey does have some advice to offer first home buyers, whose confidence is waning as house prices are set to continue soaring growth throughout 2010.

“First home buyers need to be more financially savvy if they are going to get into the housing market in the coming twelve months,” Deanne Lamprey said.

“They need to be able to make sound financial decisions, based on a level of certainty around interest rates.

“This is why we recommend they seek the services of a financial advisor who can assist them to establish a savings plan and budget to track their expenses and identify areas where they can cut back on their expenditure.”

Establishing a budget is about setting realistic timeframes, estimating income and expenses accurately and then tracking and monitoring spending to identify areas where belts can be tightened.

“There are also still in place a number of government assistance schemes, such as the First Home Saver Accounts and First Home Owners Grant which can also assist greatly,” Deanne Lamprey said.

Other hints for first home buyers include keeping an eye on the market at all times, talking to good agents about where the bargains lay in a suburb, and shopping around for good mortgage deals.

“Look for mortgage deals where you are able to pay back more than the monthly repayments, which can often reduce the term or interest payable on the mortgage significantly,” Deanne Lamprey said.

“Or, consider switching from a standard to a basic, or no frills, home loan which can potentially cut interest rates by around 0.4 per cent, but potentially may take away the flexibility to achieve other savings such as extra repayments.”

First home buyers need to reclaim their share of the property market and take advantage of the services and incentives currently on offer.

Adjustable rates mortgages have gotten a bad rap but with the reverse mortgage they should be considered.  While considered the most desirable, a fixed rate is not necessarily the best option.  Let’s discuss the advantages and disadvantages of each.

First you need to know how the loan amount is determined.  With the reverse mortgage the Principal Limit or maximum loan amount at the time of origination is determined by the home appraised value or FHA’s Maximum Claim Amount ($625,500 through 2010), the age of the borrower, and the Expected Interest Rate.  The Expected Interest Rate is only used to determine the loan amount it is not necessarily the same as the interest rate on the loan.

Currently the Expected Interest Rate on the Fixed Rate is lower than on the Adjustable Rate therefore the initial Principal Limit on the Fixed Rate option is higher than the Adjustable Rate option.  But this still does not make the Fixed Rate always the best option.

The Adjustable Interest Rate has the option of receiving funds as monthly payments, a line of credit, lump sum or a combination of these.  All the funds need to be drawn as a lump sum to receive the best interest rate with the Fixed Rate option.  While HUD requires that lenders offer the monthly and line of credit options with Fixed Rate, the interest rate would be so high that these options are never even discussed with the Fixed Rate.

Jerri needed some extra funds and was doing a reverse mortgage to meet these needs.  Her situation was she didn’t have a current mortgage and she was already receiving Medical Assistance (Medicaid in MN).

When we compared the Fixed Rate to the Adjustable Rate based on her home value and age, Jeri would receive more funds with the Fixed Rate.  However if she would choose the Fixed Rate option she would have to draw all the funds up front.  Drawing all the funds up front would mean that unless she spent them in the month they were received she would lose her Medical Assistance.

While not receiving as much available upfront, by choosing the Adjustable Rate she could take out what she needs immediately in the lump sum and leave the balance in a line of credit and draw it when she needs it.  Being the Line of Credit grows at a half percent more than the interest rate of the loan, she could have more funds available to her in the future.

Jeri chose the Adjustable Rate so she would not lose her Medical Assistance yet have the funds she needs to meet her needs.

Tom wanted to improve his cash flow and found that making the mortgage payments on his current mortgage was a challenge.  With the reverse mortgage Tom’s cash flow would improve because his current mortgage would be paid off eliminating his $1,200 monthly payments.  And with the reverse mortgage monthly payments are not required.  This means he has the $1,200 that he was paying in mortgage payments to no use as he needs.

In his situation the Fixed Rate would pay off his current loan and provide Tom about $8,000 more in a lump sum.

When we compared the Adjustable Rate option to the Fixed Rate, there was about $10,000 less available with the Adjustable Rate option.  And in order to pay off his current loan Tom would need to bring about $2,000 to the closing.  (The reverse mortgage lender needs to be in first lien position so all current loans need to be paid off with the reverse mortgage.)

In comparison Tom would receive $8,000 additional funds at closing with the Fixed Rate versus having to bring $2,000 to the closing with the Adjustable Rate.

Being Tom is not on Medical Assistance and he also wanted some funds upfront to pay off some credit card debt the Fixed Rate would not negatively impact him.

When Tom met with the reverse mortgage counselor he was told that if he could come up with the $2,000 the adjustable rate would be able to be done and they would have more funds when the reverse mortgage was being paid off.  This is not necessarily the case.

On the surface when looking at the Estimated Amortization Schedule it does appear that the remaining equity would be higher.  However it is speculative to guess what the interest rate is going to be on the Adjustable Rate option in the future.  And one needs to keep in mind that the Amortization Schedule is an estimate based on the current interest rate.

Currently the initial rate on the Adjustable Interest Rate is lower than the Fixed Interest Rate so it may look more favorable.  Unfortunately we don’t know if the Adjustable Rate will remain as low as it currently is, in other words it’s not guaranteed to remain the same.  So if the interest rate jumps high at some point in time in the future, the remaining equity could be the same or less than what could be available from the Fixed Rate.

The Home Equity Conversion Mortgage (HECM), currently the only reverse mortgage option available in Minnesota, is insured by HUD.  HUD guarantees the funds are available to the borrower, helps keep the interest rate lower, allows for the funds in the Line of Credit to grow and protects the borrower as a non-recourse loan.  This means there is no personal liability to the borrower or the estate as long as they are not retaining ownership.

In Jeri’s situation by doing the Adjustable Rate while she may not receive as much up front, she will have the funds guaranteed and the growth rate on the line of credit.  Additionally even if the reverse mortgage interest rate does go up, when the loan is due and payable if the loan balance is higher than the home can be sold for, she or her estate will not need to come up with the difference (the non-recourse protection).

In Tom’s situation, while when the loan is due and payable he may or may not have more equity if he did the Adjustable Rate, with the Fixed Rate he is receiving $8,000 at closing rather than having to come up with $2,000.  By using the $8,000 wisely, i.e. paying off credit card debt with very high interest rates and then saving the remainder in a saving account that may earn a little interest, he has the reverse mortgage interest rate guaranteed.

As was the case when the Fixed Rate was first introduced, at some point in the future the Expected Interest Rate on the Adjustable may be lower than the Fixed Rate and provide more funds to the borrower.  Not having a crystal ball we need to review each interest rate option and look at each situation as an individual circumstance without judging whether the Fixed Rate or the Adjustable Rate is better.  One shoe doesn’t fit everyone and one reverse mortgage interest rate option does not fit everyone.  The Adjustable Interest Rate may fit better for some circumstances and the Fixed Interest Rate better for others.

Related Articles:

• New Protocol For Reverse Mortgage Counseling
• Reverse Mortgage Closing Costs – High or Mythical?
• Misconceptions of Reverse Mortgages Abound… What Do You Know?
• Finance Retirement With A Reverse Mortgage

© 2010 Beth Paterson http://bethsreversemortgageblog.wordpress.com 651-762-9648

Residential markets across major cities of India have seen significant appreciation in values towards the close of 2009. This trend is most prominent in NCR and Mumbai, the two key residential markets in India, where values in Oct-Dec 2009 appreciated, compared to the same period the year before, says Cushman and Wakefield in a report.

The report said that recovery in NCR and Mumbai is a definite precursor to the expected trends in 2010. However, it would be premature, the report adds, to predict a bounce-back for the entire sector. The other markets which are still witnessing some correction are expected to stabilize only in the next 3-6 months. These are expected to see positive signs of recovery by the middle of this year, when values across the board would stabilise but will remain within acceptable range.

The average increase in capital values in various micro-markets in these two metro areas has been in the range of 3% to 25% over the previous year. Most micro-markets in these two cities have recorded stable to appreciating capital values over the last quarter as well.

NCR and Mumbai have shown a faster recovery than other cities due to the fact that these are high-demand markets, both from end users and investors, who were holding back their requirements as a result of economic slowdown , which created a kind of uncertainty in the job markets. The best outcome of the slowdown is the emergence of affordable housing in the country.

At the same time, the strong recovery in the economy led to sharp upward correction in the capital values for mid-ranged housing due to the quantum of demand and affordability.

Certain broad trends that were noticed across cities were that peripheral and the suburban markets witnessed the highest correction but were also one of the first markets to bounce back, C&W says. Another shift in the trend is the rise in demands for properties under construction.

The report said, there was a clear shift towards ready-to-move-in properties during the beginning of the year, when there was uncertainty on the capability of a developer to complete a project. But that has receded now resulting in a rise in risk appetite for properties under construction.

In the NCR region, demand for affordable housing in the range of Rs 20 lakh to Rs 40 lakh could be understood from the fact that a number of projects completely sold out within a couple of days of their launches. Recently, in Noida, Supertech , which launched apartments for Rs 9.75 lakh, (this is the first project in NCR for sub-Rs 10 lakh) could sell around 500 apartments in a couple of days.

The new trend has led to increase in the volume of transactions. Supertech CMD, R K Arora, says that the developers have now shifted to high-volume business from high margin ones. However, he also pointed out that this became possible because of the relaxation in the density norms (number of apartments allowed to be constructed on a given area). Therefore, the construction activities are set to rise in 2010.