Condo vs. Townhouse

Condo and townhouses are often lumped together, but have some significant differences. Agent Jessica Riffle Edwards explains the differences between the two.

I’ll admit it, I’ve owned a condo for the last three and a half years and just found out what the difference was between a townhouse and a condo. While you would think that they’re pretty much the same thing, there are some key differences that might be critical to you depending on your situation and appetite for being responsible for home repair.

Here’s star listing agent Jessica Riffle Edwards explaining what the differences are between the two.

Source: Coldwell Banker Blue Matter Blog
Posted on August 9, 2017 at 9:08 am
Kappel Gateway Realty | Category: appraisal, bid, Bidding, Buyer's Market, Buyers, buying, closing, closing costs, credit score, debt, equity, escrow, first time buyers, Foreclosures, Homeowners, hot market, Offers, real estate, selling, Uncategorized | Tagged , , , , , , , , , , , , , , , , ,

5 Things to Know About No-Interest Credit Cards

If you have been contemplating getting one of these, then this article is a must read!

Tempted by that offer for a new credit card with an interest-free grace period? Don’t succumb to the first attractive zero percent interest credit card offer that comes your way—unless it’s the right card for you.

First, come to understand your own motivations. A credit card with a no-interest introductory offer may be a good choice if you’re looking to consolidate debt through a balance transfer or if you’re contemplating a vacation or big purchase but don’t have the cash to immediately pay for it. Then, compare the terms of the cards you’re considering. Doing so can help you avoid potential pitfalls and choose the best offer for your circumstances.

Before you take the zero percent plunge, consider these five tips to make sure your decision is the right one.

Look Beyond the Offer
Zero percent interest cards offer a free promotional period on purchases, balance transfers, or both for a set time, typically anywhere from 12 to 21 months. After that teaser period, the card’s standard annual percentage rate will kick in.

Examine that go-to rate closely.

If the standard APR is higher than the rate you’re charged on your current cards—and you even occasionally carry a balance—it probably doesn’t make sense to use the new card after the intro period expires.

Some zero percent interest cards double as a rewards credit card and charge an annual fee. Make sure you’ll be able to take advantage of the rewards you’ll get in return for paying that fee. Otherwise, move on to another card.

Although it’s possible to close the card after the promotional period is over, it’s not recommended. Like all credit card applications, before you’re approved, the issuer will do a “hard” credit check, which can adversely impact your score. And every time you close an account, you reduce your available credit, which can also ding your credit rating.

Have a Plan
The best way to take advantage of a zero percent credit card is to pay down a huge debt transferred from an existing credit card during the introductory period.

Use that interest-free time to pay off your debt entirely (or reduce it substantially) before the intro rate expires and you begin paying interest, possibly at a higher rate than your original card. Paying the maximum monthly amount you can afford, without accruing interest, can give you a leg up on wiping it out completely.

A balance transfer calculator can help you determine how much you’ll have to pay each month to retire the debt before the end of the introductory period.

“A balance transfer is just the first step in a two-step process,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “The second—and more important—step is to use that lower rate to accelerate debt repayment and get the balance paid off for good. Otherwise, you’re just moving money around.”

Even if you can’t pay the debt in full by the end of the intro period, always make sure to pay on time. A late payment could void the promotional period, possibly trigger a penalty APR and cost you a princely sum in late fees.

Mind the Fees
Don’t be fooled: When it comes to balance transfers, a zero percent offer doesn’t mean you’ll be able to pay off your debt for free.

Balance transfer offers typically come with a one-time fee that ranges from 3 to 5 percent of the amount being transferred, although there are cards that charge no fee. Most of the time the math will work in your favor, even if you’re moving a substantial sum to a new card, but it’s smart to ensure that what you’ll save on interest payments is greater than the upfront fee.

Let’s say you want to transfer $5,000 to a card that charges no interest for 12 months. If the card charges a 3 percent transfer fee, you’d pay $150 to move the balance to a new card. Use a calculator to determine what you’d pay in interest on your current card over the course of the intro period.

Even if you have a cheap zero percent APR on your current card, your interest payments during that year would be much higher than the transfer fee—even assuming you paid off your entire balance.

Alternately, you may find that the best balance transfer credit card for you is one with a shorter promotional period but doesn’t charge a balance transfer fee. In some cases, it may be a better option than a card with longer terms that has a hefty upfront charge.

Beware the Purchase APR Pitfall
It might be tempting to splurge a little with a new card—especially if you won’t get charged interest on new purchases for a year or longer. Spending beyond your means is how debt accrues in the first place, and even an interest-free purchase still has to be paid for.

So, if you get a zero percent credit card to help manage your debt, be cautious about spending.

“Don’t get too enamored with the zero percent on new purchases,” says John Ulzheimer, a nationally recognized credit expert formerly with FICO and Experian. “Make purchases you normally would have made anyway like dry cleaning, gas, groceries—and pay it off so you don’t get into more debt.”

If you carry no credit card debt and want the card to finance a big purchase that’s beyond your monthly budget, like an appliance or furniture, proceed with caution, as well. Do this only if you can pay off the purchase during the intro period.

Make Sure You Qualify
Like most of the best credit card offers available, the better your credit score, the more likely you are to qualify for a great offer on a balance transfer card.

“Because of the structure of the cards, they’re really reserved for people with great credit. Even though you may want one, you may not qualify,” says Ulzheimer.

Overall, issuers rejected 17.7 percent of credit card applications between October 2016 and February 2017, according to a survey by the Federal Reserve Bank of New York.

Even if you are armed with a high enough credit score to qualify for the best offers, in some cases, there may be a cap on the balance transfer amount. Check the fine print to see if the balance transfer card will meet your needs before applying.

“Your balance may be (so) large that the new issuer won’t accept it,” says Linda Sherry, director of National Priorities at watchdog group Consumer Action.

Source: RisMedia

Posted on June 16, 2017 at 10:56 am
Kappel Gateway Realty | Category: credit cards, credit score, debt, real estate, Uncategorized | Tagged , , , , , , ,

10 Questions For Mortgage Lenders

The most frustrating part of your homeowner purchase if you are not paying cash?  The mortgage application and approval hands down!  Start off your journey with some great advice!

Prepare for your meeting with your mortgage lender by showing up with these 10 questions.

Buying a home starts with finding the right mortgage lender. Here are the questions you should ask mortgage lenders, before you sign on with one.

Steering clear of homebuyer’s remorse requires more than just picking the right home in the right neighborhood. According to a 2016 survey by J.D. Power, 27% of new homeowners ultimately came to regret their choice of lender. One major reason for the dissatisfaction was overall poor customer experience, including lack of communication and unmet expectations. Another factor? Pressure from the lender to choose a particular product or loan. You can remove some of the tension and turmoil of house-hunting by carefully vetting potential lenders. Here are some questions to ask potential lenders before you commit.

10 Questions to Ask Mortgage Lenders

  1. 1. What mortgage programs do you offer?

    In many cases, choosing the best loan for your specific financial situation requires working with a lender who offers a wide array of loans. You don’t want to work with a lender who tries to push you into one loan simply because that’s the only option from their limited selection.

  2. 2. Do you regularly handle the type of loan I’m looking for?

    If the type of loan you’re looking for is more specific than, say, a conventional fixed-rate mortgage, a little more expertise is useful and in some cases, it might be necessary. An uncommon home loan like a United States Department of Agriculture loan, for instance, must go through an approved lender.

  3. 3. What are the qualifications for the loan I’m seeking?

    Even when two lenders offer the same type of loan, their minimum requirements could differ. For instance, Department of Veterans Affairs loans require a minimum credit score of 620, but a lender might require a minimum score of 640. So comparison-shop. Don’t assume the same type of loan means the same terms.

  4. 4. Do you offer down payment assistance programs?

    If you’re concerned about meeting down payment requirements for a loan, this is an important question to ask. Some lenders offer assistance programs. Putting more down generally lowers your interest rate. Even paying just a half-percentage point less in interest can make a huge difference in the lifetime costs of your mortgage.

  5. 5. Can you give me an estimate of the rates and fees I might expect to pay?

    While an initial estimate doesn’t guarantee your final, out-of-pocket expense, it can be a solid jumping-off point for evaluating lenders. However, rates fluctuate, so try comparing lenders on the same day to get the most accurate mortgage rate comparisons.

  6. 6. Can you quickly provide an in-depth preapproval lender letter to my real estate agent?

    If you’re house-hunting in a hot real estate market like Jacksonville, FL, or a home for sale in Colorado Springs, CO, time is of the essence. Make sure the lender can quickly provide an in-depth preapproval letter to your real estate agent. You want a preapproval letter that makes the seller confident you qualify for the home — and, ideally, you want it to be delivered before competing offers arrive.

  7. 7. Will you be able to do a mortgage rate lock?

    Since a small change in rates can cost thousands in the long run, check to see if the lender offers a mortgage rate lock. Be sure to ask about the associated fees, including how much it costs to extend the lock should it expire before closing.

  8. 8. Do you handle mortgage loan underwriting in-house?

    There’s a big reason to ask this one. If the loan underwriting is completed in-house, loans can be processed quicker and questions answered more efficiently. And that means fewer potential complications or delays that could push back a closing date a situation that can sometimes cause a sale to fall apart.

  9. 9. What is the time estimate for processing my home loan?

    When you’re coordinating the end of a current lease or timing a home sale with a new home purchase, knowing the estimated time it will take to process your loan is key. Of course, it’s always a good idea to build in a small buffer if you can and not just because loan preparation can take longer than expected. Surprises sometimes pop up during the final walk-through before the home sells.

  10. 10. Can I expect communication in a straightforward and timely manner?

    If your communication thus far hasn’t been efficient and helpful, that could be a bad sign of things to come. Find out if you’ll have a single contact who you can count on or just a general customer service line.

    Source:  Trulia Blog

 

Posted on May 30, 2017 at 7:20 pm
Kappel Gateway Realty | Category: buying, credit score, debt, financing, first time buyers, mortgage, real estate, research, Uncategorized | Tagged , , , , , , , , , , , ,

I Can’t Get a Traditional Mortgage… What Are My Alternatives?

 

Quandry: You are faced with circumstances that may prevent you from obtaining a traditional mortgage. Don’t panic…you have alternatives!

You want to buy a house, but your credit history isn’t in tip top shape, or you cannot show a consistent cash flow even though you have a lot of money saved in the bank making you an undesirable candidate to borrow in the eyes of the lenders.

What are your options? When it comes to real estate, here are some of the most common alternatives to a traditional mortgage for you to take into consideration:

Borrow from a Self-Directed Individual Retirement Account (IRA). Self-Directed IRAs are different from Roth IRAs and traditional IRAs. A Self-Directed IRA gives you the freedom to invest in many nontraditional assets, such as mortgages, real estate, promissory notes, tax liens, precious metals, private businesses, etc. With a Self-Directed IRA you get asset protection and tax advantages as they are government-sponsored retirement plans. Due to the self dealing rule, the IRS does not allow you to borrow against your own self-directed IRA, or those of your lineal relatives and business partners. This means that you would need to know someone who has a Self-Directed IRA to borrow from, or a third party financial company that facilitates those types of transactions. For more information on how to get private lending with a Self-directed IRA, read more on Self-directed IRA Lending.

Borrow from your Whole Life Insurance policy. Whole Life Insurance is a basic cash-value life insurance. When you pay the regular premium on a Whole Life Insurance policy, you are essentially accumulating wealth through the equity growth that you are contributing which goes into a savings account. If there are dividends or interest in this account, it is tax-deferred. Don’t mistake Whole Life Insurance for Term Life insurance. Whole Life Insurance protects you for your entire life, and allows you to borrow against the cash-value of your policy. A pro tip to borrowing against your Whole Life Insurance is that it increases your borrowing potential however, should you not pay back the loan the face value of your policy reduces. If this is the strategy you choose to implement to buy your dream home, be sure to thoroughly research this option. Ask yourself and your insurance company the following:

1. What would the Pros and Cons be to borrowing against Whole Life Insurance?
2. How long will it take to repay the loan and what would be the interest rate?
3. What would happen if you pass away before the loan is payed off?
4. What are the consequences to dependents who are beneficiaries?
5. How does it affect the annual dividends?
6. Are withdrawals of the Whole Life Insurance taxable or deferred?
7. In what scenarios would the Whole Life Insurance policy lapse if you barrow from it?

There are many things to consider when borrowing against your Whole Life Insurance policy, so be sure that your decision to buy your home outweighs some of the drawbacks of borrowing against your life insurance.

See if you can get Seller Financing. Seller Financing is a great way to skip the whole mortgage approval process. However, it is quite difficult to get for the following reasons:
(1) The seller does not own the house outright, and for the seller to give you a financing option, the seller must have paid off his/her mortgage in full.
(2) Most sellers do not want the hassle and additional risks of being a lender even though they could profit more by being the financier. With that being said, sellers don’t necessarily have to be a lender. The seller can arrange to resell the promissory note to an investor.

Buy a rent-to-own home. Rent-to-own, lease-to-own, or lease-to-buy are all the same. Often times, homeowners who want to sell off their homes but can not, those home owners may list their homes as a rent-to-own. If you and the seller sign a lease contract and you pay the Option Consideration section of the lease contract, the seller is agreeing to rent his/her home to you for a specific amount of time. Once that time ends and you have been paying the rent on the lease agreement in a timely manner and building equity towards the purchase of the home; you will have the option of going through with the purchase or not. For more details about renting-to-own a home, read Pros and Cons of Renting to Own a Home.

Source:  Dream Casa

 

 

 

Posted on May 23, 2017 at 12:33 pm
Kappel Gateway Realty | Category: buying, credit score, debt, financing, first time buyers, real estate, Uncategorized | Tagged , , , , , , , ,

How Can You Change Your Credit Score in 30 Days?

The heat is on! You want to improve your credit and you want to get it done NOW!

If raising your credit seems impossible, take a step back from the big hairy goal and tackle the beast one step at a time.

There’s no “instant” button, but there are things you can do now that will help increase your score.

The unfortunate truth about raising your credit score: There is no quick fix.

Hitting the reset button sounds tempting — especially when faced with a less than stellar credit score; but starting over with a blank slate will only set you back further.

Now that a forewarning is out of the way, on to the good stuff: Actionable tips to raise your credit score swiftly and without financial risk. You can expect most of these tips to affect your credit score in about 30 to 60 days, the typical time that’s considered speedy.

How to increase your credit score

    1. Request a copy of your credit report and look for errors

In 2013, the Federal Trade Commission found that one in five consumers carried an error on their credit report. If you find an error, dispute it. Removing negative marks made in error will help you return to your correct score.

    1. Write a negotiation letter to your credit bureau

If a negotiation letter doesn’t work, contact the company reporting a late payment to ask if it will campaign for the removal. If a payment was incorrectly reported (see No. 1), or if you simply forgot a bill when you’re usually 100% on the ball, you may be able to get the late payment removed.

  1. Stop using your credit cards You can lower your credit utilization rate in two conventional ways: Lower your spending and increase your credit. Your credit score is largely determined by the amount of debt (credit card and loan balances) compared with your credit limits. Spending around one-third of your credit limit is the recommended credit line, but crossing that debt-to-credit threshold won’t help your score. Alternatively, you can request an increase in your credit or open a new card as a way of increasing your credit-to-spending ratio, but this is a risky move if your spending doesn’t slow down. Be wary of raising limits if it wouldn’t be financially feasible to pay back any and all spending.
  2. Don’t apply for multiple forms of credit in a short time Each time you request a new form of credit, including car and home loans, etc, you’ll likely face a credit inquiry. Too many inquiries within a short time and the credit bureaus may ding your credit. Keep this in mind as you request credit increases or open up new accounts. Both actions may result in one too many credit pulls and consequently, a decrease in your credit score.
  3. Settle late payments — then automate your payment schedule Timely bill pay is gut-wrenching when you’re financially strapped, but proactively settling bills will make future payments easier. Credit bureaus count a late payment starting from the first day of your last late payment, so the sooner you can square the bill, the better. This is particularly true if you can pay off past-due debts before they reach the 30-day, 60-day, or 90-day thresholds. It’s scary to confront the financial challenge, but it’s doable. Once you’ve settled any late payments, make future payments even simpler by automating. Automation avoids accidental missed payments and takes the mental clutter of scheduling multiple payments off your mind.
  4. Building credit builds long-lasting habits Approaching the daunting task of increasing your credit score with the long-term-training mindset helps you build long-lasting habits that strengthen your financial foundation.

Source:  Trulia Blog

Posted on May 16, 2017 at 4:10 pm
Kappel Gateway Realty | Category: credit cards, credit score, debt, financing, first time buyers, mortgage, real estate, Uncategorized | Tagged , , , , , , , , , ,

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