Home refinancing is a wonderful financial tool for homeowners to use for debt management to investments. If the home refinance is used correctly, wisely, and at the right time, the benefits from the refinance can improve the financial picture of the homeowner. There is no cookie cutter approach to refinancing. Each individual or family has their own unique set of circumstances. Here are some common questions homeowners often ask when they are considering refinancing.
What is the most critical question to ask myself when refinancing a home?
Is refinancing going to put you in a better position financially? Will refinancing reduce your monthly expenses, meet a critical family requirement, or improve your investment portfolio? If the answer is yes, it is probably a good time to refinance.
What is a cost benefit analysis?
This is a detailed account of the actual cost of refinancing and helps provide the best financial decision. Cost-benefit analysis analyzes the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs When you look at the actual costs of refinancing, determine how long it will take to recoup costs. Is it worth it? A qualified mortgage professional should review your alternatives and help you determine if the benefits outweigh the near and long term costs. The rule of thumb regarding the cost vs. benefit of refinancing is that you need a 1- 2% "spread" between your existing interest rate and today's current rates. Refinancing, No Cash-Out option can reduce your monthly mortgage payment or reduce the remaining term of your loan and thus probably save tens of thousands of dollars in interest over the long-run. Cash-Out withdraws cash (reduces equity) for home improvement, educational tuition, debt consolidation or for such purchases as a investment property or second home, auto, or other major purchase.
How often should I refinance?
Some people refinance frequently but a rule of thumb should be that you have held the property for one year. Refinancing allows the homeowner to use the home to conduct transactions that allow opportunities and possibly enhance the homeowner's asset pool or reduce the financial short-term burden of the homeowner. How the homeowner approaches the refinance is critical to long-term financial net worth. If the homeowner is utilizing the home as a second checking account to payoff consumer debt, financial stability for future years is reduced through ineffective money management by reducing the homeowner's equity. The ability for the consumer to build equity is in essence a long term subtle retirement plan for the homeowner.
What are some questions I can ask the mortgage company or the bank handling my refinancing?
The scope of financial knowledge a mortgage consultant or loan officer possesses matters in this transaction. This person should have a thorough knowledge of money and how it works. Begin by asking about their professional credentials. The best mortgage professionals will have formal business education, professional experience in the financial industry, and the institutional knowledge to place you in the right product. At Breakwater Mortgage in Virginia Beach, we select our mortgage consultants, loan officers, and loan originators based on strengths in these areas. Often lenders, banks, and other mortgage companies do not conduct a detailed review of potential employees that will handle your most important asset. Ask your mortgage professional why they are recommending a certain loan product to you. You should also feel free to ask personal questions such as: Do you own a home? What type of mortgage do you have? What is your credit score? The answers will reveal information about their money management. If you do not feel comfortable with your mortgage professional, research a qualified individual who will help you based on your needs. It's worth it to take the time to find the right mortgage professional.
Does location of the home matter when considering refinancing?
Yes, it matters a great deal. Some real estate markets have reached their peak. Do not refinance at the top of the market. Research and see how quickly homes are selling in your area. Contact your local professionals regarding home values in your market. They will be able to give you their opinion, home comps, assessments of home value trends in your area. I recommend you leave 10-15% equity in your home when you refinance. A reputable mortgage broker or lender will recommend that you keep some equity in your home so you can sell your property if situations dictate.
Does the type of mortgage I have affect my refinancing decision?
Absolutely. Talk to a qualified mortgage professional first, before you make your decision. That person will help you compare your current mortgage rate/product to current market rates, available mortgage terms, and types of mortgages available based on your discussions. I look at mortgage products based on an indebt analysis of the clients needs. With that in mind, some general rules apply. If rates are falling, I would advise a homeowner to stay in their current loan until a 2% spread between their current loan and future refinance loan. If a client has a loan product that adjusts downward during a period of decreasing rates, I recommend they stay with that product until a projected rate increase period that will increase over a protracted period. When rates start to increase, and are projected to continue to increase, I would advise a homeowner with a loan product that adjusts, when rates adjust, to move towards a fixed mortgage product (7, 10, 15 or 20 year mortgage depending upon an individual's situation). If the homeowner is geographically displaced due to employment, say five years or less, a long-term fixed mortgage is not the optimal product. If the homeowner plans to stay in a specific geographical area and in that same home for a long period of time, I'd recommend a long-term fixed rate product and possibly a home owner's line of credit (HELOC) to supplement the homeowner's financial decisions. With long-term mortgages a homeowner can still opt to pay more on the principal, reducing the term of the loan and interest costs.
What are economic indicators that bode well for refinancing?
A knowledgeable mortgage professional should understand economic indicators, and will be able to give you an accurate assessment on whether to refinance or not. Are interest rates rising or falling? With refinancing, timing is everything. If rates are falling and they are lower than your mortgage rate (a general rule is 1 - 2 % lower then your current fixed rate), it could be a good time to refinance. If not, it might be a better idea to sit tight and forgo refinancing for now.
About the Author
Jay R. Popejoy's educational background in financial and mortgage lending includes B.S. Degrees (Marketing/Business Education)and a M.B.A. program (current studies). E-mail jay@breakwatermortgage.com or visit http://www.breakwatermortgage.com for more informaiton.
Written by: Jay Popejoy http://vurl.bz/royal/Finance-Tips/
Wednesday, March 4, 2009
Auto Refinance
You have probably heard of auto refinance before. Or simply refinance. The term "refinance" actually refers to a financial situation wherein a borrower finds financing to pay off a current loan. Refinance is often put into practice in home buying. In fact, refinancing is one of the most popular methods of getting financing for a home loan.
With auto refinance, the same thing applies. Auto refinance is basically paying off one loan with a new loan. The goal of auto refinance is to allow the borrower to save some money from your monthly loan obligations. And as such, it is one of the best kept secrets in the financing industry. For years now, people have refinancing their homes and saving thousands of dollars. However, the practice of refinancing car loans has yet to be indulged by most. Why? Perhaps the reason is that auto loans generally behave differently from home loans and people are naturally skeptical about new methods. Regardless, auto refinance is still a good choice, provided that the situation is right.
When to get an Auto Refinance Loan
The only way for auto refinance to work is if you get it when the interest rates are low. Mortgage rates tend to move with interest rates. Therefore, if interest rates are low, then it's likely that mortgage rates are low also. Low mortgage rates typically mean low monthly repayments and this then is the situation you should aim for.
Only few people really understand the time value of money. Keep in mind that the longer you pay for a loan, the bigger amount of money you actually spend for it. Thus, by the end of the loan period, you would have paid more money on interest than on the principal. This is why auto refinance is important for it is one of the few methods that could help you minimize loan costs and maximize your savings.
Who can benefit from Auto Refinance?
Almost anyone with a loan to his name can benefit from auto refinance. Even car buyers with bad credit can obtain auto refinance as a way for them to lower down their APRs. Let's say, for instance, you make an auto refinance loan for $16,500 on a new Honda Accord. At the end of six months, you agree to pay off the amount at 21% APR. So for a few months, this will be your monthly loan obligation.
Then, you decide to take an auto refinance loan. However, this time, your loan ate is at 6% APR. Your current monthly payment is $446 which gives you total interest charges of $10,283 at the end of your loan period. Your auto refinance loan offers you a monthly payment of $319 with total interest charges of $2,639. Thus, by refinancing, you can save up to $7,600.
About the Author
Tony Forster has a keen interest in living debt free having been "up to his ears" before realizing the need to take control. He has compiled an online financial article resource at http://www.loan4payday.info
Written by: Tony http://vurl.bz/royal/Finance-Tips/
With auto refinance, the same thing applies. Auto refinance is basically paying off one loan with a new loan. The goal of auto refinance is to allow the borrower to save some money from your monthly loan obligations. And as such, it is one of the best kept secrets in the financing industry. For years now, people have refinancing their homes and saving thousands of dollars. However, the practice of refinancing car loans has yet to be indulged by most. Why? Perhaps the reason is that auto loans generally behave differently from home loans and people are naturally skeptical about new methods. Regardless, auto refinance is still a good choice, provided that the situation is right.
When to get an Auto Refinance Loan
The only way for auto refinance to work is if you get it when the interest rates are low. Mortgage rates tend to move with interest rates. Therefore, if interest rates are low, then it's likely that mortgage rates are low also. Low mortgage rates typically mean low monthly repayments and this then is the situation you should aim for.
Only few people really understand the time value of money. Keep in mind that the longer you pay for a loan, the bigger amount of money you actually spend for it. Thus, by the end of the loan period, you would have paid more money on interest than on the principal. This is why auto refinance is important for it is one of the few methods that could help you minimize loan costs and maximize your savings.
Who can benefit from Auto Refinance?
Almost anyone with a loan to his name can benefit from auto refinance. Even car buyers with bad credit can obtain auto refinance as a way for them to lower down their APRs. Let's say, for instance, you make an auto refinance loan for $16,500 on a new Honda Accord. At the end of six months, you agree to pay off the amount at 21% APR. So for a few months, this will be your monthly loan obligation.
Then, you decide to take an auto refinance loan. However, this time, your loan ate is at 6% APR. Your current monthly payment is $446 which gives you total interest charges of $10,283 at the end of your loan period. Your auto refinance loan offers you a monthly payment of $319 with total interest charges of $2,639. Thus, by refinancing, you can save up to $7,600.
About the Author
Tony Forster has a keen interest in living debt free having been "up to his ears" before realizing the need to take control. He has compiled an online financial article resource at http://www.loan4payday.info
Written by: Tony http://vurl.bz/royal/Finance-Tips/
Know about Home equity loans California
Home Equity
Home equity is the value of your home less the amount of money that you still owe on it. Home equity is one of the smartest, cheapest, and easiest ways to use the money you need to help you to fulfill your. Financial needs. an easy method for determining your home equity is to subtract the amount of the mortgage balance from the current fair market value of your home. Home equity is determined by deducting what you owe from what your house is worth. This type of loan can also be calculated by subtracting the amount still owed on all outstanding loans against the property from the fair market value of the property. Loans like this are a wise lending product and a great resource if you know the facts.
Types of home equity loans
There are various types of home equity loans which are very beneficial for a laon borrower like home equity line of credit. Using home equity line of credit you can finance things like home improvements, paying off debt, buying a second home, purchasing a new vehicle. Also It can help you to pay off their big interest rates, . If you want to repair your house It will also be the best option. It can also help you to consolidate derbts .Using a home loan to substitute a number of credit cards and other high-interest debt has plenty of advantages. Besides the interest you pay on a equity loan is tax deductible where as the interest you pay on credit card debt is not. Make use of A Home Equity Loan As debt consolidation Loan managing and understanding debt is crucial to financial security and well being. Like any other debt, a home equity loan should be used sparingly.
Other types of loans http:/www.ca-home-equity-loans.com/home-improvement-loans.php http:/www.ca-home-equity-loans.com/interest-onlyt-loan.php
Interest rates of home equity loans
Interest rates on short-term equity line of credit have increased even though the housing market is slowing, which means that homeowners will have less of a cushion to fall back on should they be unable to repay borrowed money. Still, home-equity loans and lines of credit are often the best attractive option for homeowners who are looking to borrow, and traditional cash-out refinancing of first mortgages has fallen out of fashion since rates began to rise. The loan's terms are usually incredibly unfavorable to the consumer, with enormous up-front costs and high interest rates that sometimes can exceed 40% or more. Home equity loans and lines typically have much lower interest rates than traditional types of financing, such as credit cards and personal loans. These loans are granted on fixed interest rates against the borrowers' house as security. Home loans offer a fixed interest rate with fixed monthly payments, while home equity lines of credit feature a variable rate so monthly payments can increase or decrease as rates and your principal balance change. Interest rates are usually fixed rather than variable.
So, you should always remember that home equity loans are not for everyone. Make sure that you have a good plan in mind when you go for a home equity loan. Get information about different home equity loan lenders . Compare their advantages and disadvantages and then decide which loan plan and which lender is best suited to your needs . You can use online mortgage lenders to get several quotes for free.
By: Sandeep Singla
About the Author
Sandeep Singla is an experienced consultant on home equity loan matters and has gained vast experience of 30 years in guiding people in the right direction ..He has consulted successfully on thousands of clients . . Get services of home equity loan consultant http://www.ca-home-equity-loans.com
Home equity is the value of your home less the amount of money that you still owe on it. Home equity is one of the smartest, cheapest, and easiest ways to use the money you need to help you to fulfill your. Financial needs. an easy method for determining your home equity is to subtract the amount of the mortgage balance from the current fair market value of your home. Home equity is determined by deducting what you owe from what your house is worth. This type of loan can also be calculated by subtracting the amount still owed on all outstanding loans against the property from the fair market value of the property. Loans like this are a wise lending product and a great resource if you know the facts.
Types of home equity loans
There are various types of home equity loans which are very beneficial for a laon borrower like home equity line of credit. Using home equity line of credit you can finance things like home improvements, paying off debt, buying a second home, purchasing a new vehicle. Also It can help you to pay off their big interest rates, . If you want to repair your house It will also be the best option. It can also help you to consolidate derbts .Using a home loan to substitute a number of credit cards and other high-interest debt has plenty of advantages. Besides the interest you pay on a equity loan is tax deductible where as the interest you pay on credit card debt is not. Make use of A Home Equity Loan As debt consolidation Loan managing and understanding debt is crucial to financial security and well being. Like any other debt, a home equity loan should be used sparingly.
Other types of loans http:/www.ca-home-equity-loans.com/home-improvement-loans.php http:/www.ca-home-equity-loans.com/interest-onlyt-loan.php
Interest rates of home equity loans
Interest rates on short-term equity line of credit have increased even though the housing market is slowing, which means that homeowners will have less of a cushion to fall back on should they be unable to repay borrowed money. Still, home-equity loans and lines of credit are often the best attractive option for homeowners who are looking to borrow, and traditional cash-out refinancing of first mortgages has fallen out of fashion since rates began to rise. The loan's terms are usually incredibly unfavorable to the consumer, with enormous up-front costs and high interest rates that sometimes can exceed 40% or more. Home equity loans and lines typically have much lower interest rates than traditional types of financing, such as credit cards and personal loans. These loans are granted on fixed interest rates against the borrowers' house as security. Home loans offer a fixed interest rate with fixed monthly payments, while home equity lines of credit feature a variable rate so monthly payments can increase or decrease as rates and your principal balance change. Interest rates are usually fixed rather than variable.
So, you should always remember that home equity loans are not for everyone. Make sure that you have a good plan in mind when you go for a home equity loan. Get information about different home equity loan lenders . Compare their advantages and disadvantages and then decide which loan plan and which lender is best suited to your needs . You can use online mortgage lenders to get several quotes for free.
By: Sandeep Singla
About the Author
Sandeep Singla is an experienced consultant on home equity loan matters and has gained vast experience of 30 years in guiding people in the right direction ..He has consulted successfully on thousands of clients . . Get services of home equity loan consultant http://www.ca-home-equity-loans.com
President Obama Housing Plan: Can It Help You?
At first glance the new President Obama housing rescue plan is playing to mixed reviews. Some critics say it doesn't go far enough to solve the housing mess this country is now in. Others express resentment at helping people who took on more house than they could afford or somehow mismanaged there money irresponsibly.
These may have elements of truth in them, but the fact is the President has to begin to take action to stop the bleeding. What most of the critics overlook is this is a beginning, not an ending of the actions the President will take. It's unrealistic to think the President will solve this massive problem with one plan, action or decision.
The mortgage rescue plan basically gives banks a financial incentive to reduce homeowners mortgage payments a maximum of 31 percent of the homeowners income. The borrowers that will benefit most from this payment reduction are those who had a reasonable mortgage loan, but through no fault of their own lost their job or had their hours slashed.
Many critics resent footing part of the tax bill to help homeowners in trouble. However, this appears to be the quickest and best way to stop the flood of foreclosures. One benefit those critics will receive is the decrease of the value of their homes slowing down and in time stopping. Because the more foreclosures in their neighborhood the more value their home loses.
The mortgage rescue plan will also help homeowners who are underwater so-to-speak. That is homeowners who owe more than their home is worth - provided they can still afford the monthly payments. The plan will help these homeowners. How? By offering incentives to banks to reduce interest rates and restructure loans. In fact, banks who received bailouts funds are required to participate in the program.
What are the other requirements? Home interest reductions and loan refinancing are available to loans backed by Fannie Mae (The Federal National Mortgage Association) or Freddie Mac (The Federal Home Loan Mortgage Corporation). Many of the sub prime loans were not backed by Fannie Mae or Freddie Mac. Experts predict 1 out of 10 homeowners in trouble will be helped by the plan. But remember this is just the beginning.
What the President is attempting to do is to restore confidence. It's similar to starting a dead battery on a cold night. It's a waste of time to focus on all the parts of the car like the engine, the transmission or the lights. You have to focus on jump starting the battery first and the rest will start to fall in place. I'll continue to keep you informed and walk you through this President Obama rescue plan and how it can help you as a homeowner. Stay tuned.
About the Author
To get more tips and updates on the President Obama Rescue Plan go to http://blackhomeownernews.com
These may have elements of truth in them, but the fact is the President has to begin to take action to stop the bleeding. What most of the critics overlook is this is a beginning, not an ending of the actions the President will take. It's unrealistic to think the President will solve this massive problem with one plan, action or decision.
The mortgage rescue plan basically gives banks a financial incentive to reduce homeowners mortgage payments a maximum of 31 percent of the homeowners income. The borrowers that will benefit most from this payment reduction are those who had a reasonable mortgage loan, but through no fault of their own lost their job or had their hours slashed.
Many critics resent footing part of the tax bill to help homeowners in trouble. However, this appears to be the quickest and best way to stop the flood of foreclosures. One benefit those critics will receive is the decrease of the value of their homes slowing down and in time stopping. Because the more foreclosures in their neighborhood the more value their home loses.
The mortgage rescue plan will also help homeowners who are underwater so-to-speak. That is homeowners who owe more than their home is worth - provided they can still afford the monthly payments. The plan will help these homeowners. How? By offering incentives to banks to reduce interest rates and restructure loans. In fact, banks who received bailouts funds are required to participate in the program.
What are the other requirements? Home interest reductions and loan refinancing are available to loans backed by Fannie Mae (The Federal National Mortgage Association) or Freddie Mac (The Federal Home Loan Mortgage Corporation). Many of the sub prime loans were not backed by Fannie Mae or Freddie Mac. Experts predict 1 out of 10 homeowners in trouble will be helped by the plan. But remember this is just the beginning.
What the President is attempting to do is to restore confidence. It's similar to starting a dead battery on a cold night. It's a waste of time to focus on all the parts of the car like the engine, the transmission or the lights. You have to focus on jump starting the battery first and the rest will start to fall in place. I'll continue to keep you informed and walk you through this President Obama rescue plan and how it can help you as a homeowner. Stay tuned.
About the Author
To get more tips and updates on the President Obama Rescue Plan go to http://blackhomeownernews.com
Singapore Land banking: Interview with a Land Banker
Interview: Alternative Real Estate Investments, Miss Lee Loo Yen Today we have with us Miss Lee Loo Yen who will tell us a bit more about land banking.
ABOUT US: www.PropertyBuyer.com.sg is a Research Focused Mortgage Advisory that helps people to find Home Loans or Refinancing Loans. We do NOT simply emphasize cheap loans, but rather we use a balanced Risk versus Benefit approach and match that with the Home Owner's financial circumstances to create the best fit and customized home loan.
Call us at 6100-0608 or contact us at: http://www.PropertyBUYER.com.sg/contactus.php How long have you been working as a land banking advisor?
One year.
What were you doing before that?
I was in sales and operations in a travel company.
What made you decide to become a land banking advisor?
It was a journey of learning about financial literacy and serendipity which got me here.
Why do you think it is important for land banking investors to know before they invest in land banking?
They need to understand their own objectives. As for me, I strive to understand the customers' risk profile and needs, and constantly looking out for my customer's interests. Ultimately many of my customers (Investors) are also my friends and I do have to be accountable to them.
I will not sell something which I don't buy myself.
There's no perfect wealth-generating instrument out there. Given methodology on how wealth is engineered, the risk-returns ratio, the quality of work which the company produces, land banking with this company, is by far the best instrument, from what I understand.
What qualities do you think a land banking advisor needs to have before he/she can do well?
Everything I do, it must be one notch better. I can't pin-point one.
What do you think are your specialties and strengths? How do you value-add to your customers?
Being an active social networker, most customers becomes friends and one of the the value-adds I bring to my customers is perhaps my network. After understanding my customer, if there are areas which I can help, I'll help. If not, I'll look into my network to see what can be done.
What are your views of the property market for the next 6 months?
My views are perhaps very similar to the masses. Perhaps the sales will slow down. Singapore economy slows, so many condo TOP, so many people losing money... These may cause people to hold back big purchases. Then again, the pent-up demand is definitely there, so the price may not drop as much.
Is now a good time for new investors or home buyers to enter the market given the weak consumer sentiments in North America? Why or why not?
People looking for investment homes, can consider getting in now. Just be aware of the risks. There are always negative equity and vacancy risk. But if that should happen, it could be temporary (depends on location/ condition of the house too) because population are increasing in some cities all the time. You just have to manage your expectations and understand your own risk profile.
If you were to invest now, what property/projects would you buy? Why?
I wish there are more studio-apartments around in the city or near schools. Especially for expatriates, buying a car is a massive investment. They usually live alone, and appreciate privacy. So they probably prefer an accessible location. Young single Singaporeans also like the concept. Hence the demand for studio apartment is massive.
What type of returns would an investor get from Land banking? How secure are these? Is the capital gains taxable?
We do not offer guarantees for land banking. The rate of returns we project is around 15-20% simple interest per year.
Yes. There's capital gain taxes payable when the land is sold. It is around 15% for US projects, and 20-over% for the Canadian projects.
In your opinion, is there any "secrets" to do well and make money from property investing or land banking investing?
Patience and due diligence are the keys to success... then 'Just do it.' as what Nike says.
What advice can you give a new homebuyer or property investor who is thinking of buying his first plot of land?
Understand what your objectives are first, then find out about your choices. Perhaps I am biased. Buying land is almost a no-brainer, because it is simple and hassle-free. It is really good to start as soon as possible, to take advantage of the power of compounding.
Do you invest in the Singapore property market? If yes, what properties do you currently own? If not, why not?
No. I'm ready for an enormous credit like a house yet. But I am investing in land, which is more affordable and also there's no liablility. My portfolio of Land is a fully-owned and paid for. And it probably will generate around 15-20% per year, which is decent earnings compare with buying another house in Singapore.
Loo Yen, we at PropertyBuyer.com.sg would have to agree with you on that. Many people who bought houses (I mean condos) in 2007 or 2008 could have been hurt by falling property prices.
Anyway, Why not land banking in Singapore? Is there a reason?
Land banking is not possible in Singapore. The reason is that most of Singapore land are government owned. Technically speaking, there's only one land banking "company" in Singapore, that's the Singapore Government, and they are also the Urban Planner, ie, the URA. There's no room for another land banking firm to operate because there's simply not enough land.
The land is so far. A investor can't see, touch, smell it. Why should they buy an oversea plot of land?
They should buy it if they want to take advantage of the wealth-creation opportunity in land. People are always moving into certain cities. There are just a limited amount of land in strategic locations. When you are a land-owner, you are owning part of the valuable raw material, which the city eventually needs to buy it from you. Land bankers have a niche and essential position to play further value-adding the land, by doing the concept planning for the land.
We thank Miss Lee Loo Yen for accepting this interview. Miss Lee cannot reveal the company she works for due to strict company policy, but if you could contact us, we will let her know your questions.
Should you have any questions for her, please let us know at: -
info@PropertyBuyer.com.sg
or call us at +65 - 6100 06-08
If you have interesting insights to share, please let us know.
ABOUT US
About the Author
www.PropertyBuyer.com.sg is a Research Focused Mortgage Advisory that helps people to find Home Loans or Refinancing Loans. We do NOT simply emphasize cheap loans, but rather we use a balanced Risk versus Benefit approach and match that with the Home Owner's financial circumstances to create the best fit and customized home loan.
Call us at 6100-0608 or contact us at: http://www.PropertyBUYER.com.sg/contactus.php
ABOUT US: www.PropertyBuyer.com.sg is a Research Focused Mortgage Advisory that helps people to find Home Loans or Refinancing Loans. We do NOT simply emphasize cheap loans, but rather we use a balanced Risk versus Benefit approach and match that with the Home Owner's financial circumstances to create the best fit and customized home loan.
Call us at 6100-0608 or contact us at: http://www.PropertyBUYER.com.sg/contactus.php How long have you been working as a land banking advisor?
One year.
What were you doing before that?
I was in sales and operations in a travel company.
What made you decide to become a land banking advisor?
It was a journey of learning about financial literacy and serendipity which got me here.
Why do you think it is important for land banking investors to know before they invest in land banking?
They need to understand their own objectives. As for me, I strive to understand the customers' risk profile and needs, and constantly looking out for my customer's interests. Ultimately many of my customers (Investors) are also my friends and I do have to be accountable to them.
I will not sell something which I don't buy myself.
There's no perfect wealth-generating instrument out there. Given methodology on how wealth is engineered, the risk-returns ratio, the quality of work which the company produces, land banking with this company, is by far the best instrument, from what I understand.
What qualities do you think a land banking advisor needs to have before he/she can do well?
Everything I do, it must be one notch better. I can't pin-point one.
What do you think are your specialties and strengths? How do you value-add to your customers?
Being an active social networker, most customers becomes friends and one of the the value-adds I bring to my customers is perhaps my network. After understanding my customer, if there are areas which I can help, I'll help. If not, I'll look into my network to see what can be done.
What are your views of the property market for the next 6 months?
My views are perhaps very similar to the masses. Perhaps the sales will slow down. Singapore economy slows, so many condo TOP, so many people losing money... These may cause people to hold back big purchases. Then again, the pent-up demand is definitely there, so the price may not drop as much.
Is now a good time for new investors or home buyers to enter the market given the weak consumer sentiments in North America? Why or why not?
People looking for investment homes, can consider getting in now. Just be aware of the risks. There are always negative equity and vacancy risk. But if that should happen, it could be temporary (depends on location/ condition of the house too) because population are increasing in some cities all the time. You just have to manage your expectations and understand your own risk profile.
If you were to invest now, what property/projects would you buy? Why?
I wish there are more studio-apartments around in the city or near schools. Especially for expatriates, buying a car is a massive investment. They usually live alone, and appreciate privacy. So they probably prefer an accessible location. Young single Singaporeans also like the concept. Hence the demand for studio apartment is massive.
What type of returns would an investor get from Land banking? How secure are these? Is the capital gains taxable?
We do not offer guarantees for land banking. The rate of returns we project is around 15-20% simple interest per year.
Yes. There's capital gain taxes payable when the land is sold. It is around 15% for US projects, and 20-over% for the Canadian projects.
In your opinion, is there any "secrets" to do well and make money from property investing or land banking investing?
Patience and due diligence are the keys to success... then 'Just do it.' as what Nike says.
What advice can you give a new homebuyer or property investor who is thinking of buying his first plot of land?
Understand what your objectives are first, then find out about your choices. Perhaps I am biased. Buying land is almost a no-brainer, because it is simple and hassle-free. It is really good to start as soon as possible, to take advantage of the power of compounding.
Do you invest in the Singapore property market? If yes, what properties do you currently own? If not, why not?
No. I'm ready for an enormous credit like a house yet. But I am investing in land, which is more affordable and also there's no liablility. My portfolio of Land is a fully-owned and paid for. And it probably will generate around 15-20% per year, which is decent earnings compare with buying another house in Singapore.
Loo Yen, we at PropertyBuyer.com.sg would have to agree with you on that. Many people who bought houses (I mean condos) in 2007 or 2008 could have been hurt by falling property prices.
Anyway, Why not land banking in Singapore? Is there a reason?
Land banking is not possible in Singapore. The reason is that most of Singapore land are government owned. Technically speaking, there's only one land banking "company" in Singapore, that's the Singapore Government, and they are also the Urban Planner, ie, the URA. There's no room for another land banking firm to operate because there's simply not enough land.
The land is so far. A investor can't see, touch, smell it. Why should they buy an oversea plot of land?
They should buy it if they want to take advantage of the wealth-creation opportunity in land. People are always moving into certain cities. There are just a limited amount of land in strategic locations. When you are a land-owner, you are owning part of the valuable raw material, which the city eventually needs to buy it from you. Land bankers have a niche and essential position to play further value-adding the land, by doing the concept planning for the land.
We thank Miss Lee Loo Yen for accepting this interview. Miss Lee cannot reveal the company she works for due to strict company policy, but if you could contact us, we will let her know your questions.
Should you have any questions for her, please let us know at: -
info@PropertyBuyer.com.sg
or call us at +65 - 6100 06-08
If you have interesting insights to share, please let us know.
ABOUT US
About the Author
www.PropertyBuyer.com.sg is a Research Focused Mortgage Advisory that helps people to find Home Loans or Refinancing Loans. We do NOT simply emphasize cheap loans, but rather we use a balanced Risk versus Benefit approach and match that with the Home Owner's financial circumstances to create the best fit and customized home loan.
Call us at 6100-0608 or contact us at: http://www.PropertyBUYER.com.sg/contactus.php
Housing Investments?
Owning a home has always been the pinnacle of the American Dream, and a fail proof good investment to anyone who could afford to buy a house. Historically, house prices go up with time, so given a few good years of sprucing up, any home owner could expect to see healthy returns for an investment in the home market.
Enter the current bad economy. Home prices have been falling- most notably over the past year, but statistically for the past two years or more. Due to misguided lending, bad mortgages, over-extended credit, and foreclosures galore, entering the housing market has become harder than ever for those who may want to take the plunge and buy a house in spite of the insecure financial situation of the country, many people are now looking to sell property quick - leaving many opportunities open for the brave property developer!
Mortgages are now exceedingly difficult to secure, requiring applicants to have better credit scores than before, and offering far fewer options to those who may not have enough for a substantial down payment. This is, however, a time of very low interest rates. Now down in the 5% range, those who do have mortgages and stable credit should look into refinancing options. Lowering interest rates by 1% on the average mortgage can save the owner thousands upon thousands of dollars over the life of a 30 year loan, not to mention decrease the monthly mortgage payment. But a new interest rate is only a good deal if it is fixed for the life of the loan.
About the Author
To stay up to date with the front line of all things property - click on to Swift-Capital.co.uk and follow the experts blogs and make sure you don't miss out on people who sell-property-fast - capitalise!
Enter the current bad economy. Home prices have been falling- most notably over the past year, but statistically for the past two years or more. Due to misguided lending, bad mortgages, over-extended credit, and foreclosures galore, entering the housing market has become harder than ever for those who may want to take the plunge and buy a house in spite of the insecure financial situation of the country, many people are now looking to sell property quick - leaving many opportunities open for the brave property developer!
Mortgages are now exceedingly difficult to secure, requiring applicants to have better credit scores than before, and offering far fewer options to those who may not have enough for a substantial down payment. This is, however, a time of very low interest rates. Now down in the 5% range, those who do have mortgages and stable credit should look into refinancing options. Lowering interest rates by 1% on the average mortgage can save the owner thousands upon thousands of dollars over the life of a 30 year loan, not to mention decrease the monthly mortgage payment. But a new interest rate is only a good deal if it is fixed for the life of the loan.
About the Author
To stay up to date with the front line of all things property - click on to Swift-Capital.co.uk and follow the experts blogs and make sure you don't miss out on people who sell-property-fast - capitalise!
Homeownership Stability and Affordability
Help For Homeowners And Soon-To-Be Homeowners trishsublette 28 February, 2009 09:04 General, Mortgage Help, Refinancing, Help for Homeowners, First Time Homebuyers, Tax Credit for First Time Homebuyers, President Obama's Housing Initiative Permalink Trackbacks (0)
My Gosh! My head is in a whirlwind! First came the Economic Stimulus Plan for 2009; and right behind it came the Homeowner Affordability and Stability Plan. Is help on its way? I think so. The news for homeowners and soon-to-be homeowners is promising. So, get your documents ready because now is the time to either refinance or purchase a home.
Here is what the Economic Stimulus Plan has to offer for the soon to be homeowner:
The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at, just as the name of the name of the plan implies, stimulating the US economy. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for a tax credit of $8,000 or 10% of the value of the home, whichever is lower. Therefore, if the home you purchase is valued at least $80,000 you will eligible for the $8,000 tax credit. If the home is valued less than $80,000, the tax credit will be 10% of the value of the home.
The $8,000 tax credit is a true tax credit. It's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability. In other words, the $8,000 is not subtracted from your income before taxes are applied. Instead, the tax credit is deducted from taxes due. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing. Even more amazing, the tax credit is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you owe $4,000 in income tax, the $8,000 tax credit will be applied to the amount owed... and you will receive a check for the remaining $4,000!
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
The tax credit is applicable to any home that will be used as a principle residence. Qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured homes and houseboats used for principle residence also qualify. The only catch is that buyers will have to repay the credit if they sell their homes within three years.
The Homeowner Affordability and Stability Plan is twofold:
This plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. Many of the plan's details are still being worked out and will not be announced until March 4. Here is an overview of the plan's main components.
Refinancing Initiative
For those whose homes are in an "upside down" position, meaning the mortgage balance is more than the current property value, refinancing the mortgage may be possible. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.
According to the plan, "responsible" homeowners, those that have been making their payments, but are struggling to do so, can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.
As with the rest of the plan, details about this initiative will be released at a future date--including what, if any, credit score requirements will be included.
Stability Initiative
The stability initiative aims at providing help to individual families, as well as entire neighborhoods, by helping reduce foreclosures and stabilize home prices. Remember that a foreclosure in the neighborhood affects everyone - prices go down, property values are reduced.
This plan is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly. The goal of this initiative is simple: "reduce the amount homeowners owe per month to affordable levels." To accomplish this, lenders are encouraged to lower homeowners' payments to 31% of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with the Treasury Department sharing in the costs.
An important part is that homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.
This initiative also includes a number of additional elements and incentives, including an extra incentive for borrowers to keep paying on time. The initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years. It is important to note that both the refinance initiative and the stabilization initiative are for owner occupancy residences only. Neither plan is for investment property. My Comments
In a nutshell, we should all have hope of a recovery. This recession has been hard on all Americans. I truly believe that the first step out of this recession is the stabilization of the housing market. We would be silly not to take advantage of these soon to be available programs. March 4th is just a few days away, so pay close attention to news broadcasts and to my blog. I will keep you posted as to what steps to take. In the meantime, gather your documents together - 30 days of paystubs, the last 2 years of W-2's, and 2 months of bank statements (all pages). If self-employed, you will need the last 2 years of tax returns (all pages).
Granted, these plans will not help everyone. But, for the majority, those who did not buy more than they could afford, they are a lifeline. Grab onto and do your part to get this economy moving again.
About the Author
Mortgage Expert at Realestateloans.com
My Gosh! My head is in a whirlwind! First came the Economic Stimulus Plan for 2009; and right behind it came the Homeowner Affordability and Stability Plan. Is help on its way? I think so. The news for homeowners and soon-to-be homeowners is promising. So, get your documents ready because now is the time to either refinance or purchase a home.
Here is what the Economic Stimulus Plan has to offer for the soon to be homeowner:
The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at, just as the name of the name of the plan implies, stimulating the US economy. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for a tax credit of $8,000 or 10% of the value of the home, whichever is lower. Therefore, if the home you purchase is valued at least $80,000 you will eligible for the $8,000 tax credit. If the home is valued less than $80,000, the tax credit will be 10% of the value of the home.
The $8,000 tax credit is a true tax credit. It's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability. In other words, the $8,000 is not subtracted from your income before taxes are applied. Instead, the tax credit is deducted from taxes due. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing. Even more amazing, the tax credit is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you owe $4,000 in income tax, the $8,000 tax credit will be applied to the amount owed... and you will receive a check for the remaining $4,000!
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
The tax credit is applicable to any home that will be used as a principle residence. Qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured homes and houseboats used for principle residence also qualify. The only catch is that buyers will have to repay the credit if they sell their homes within three years.
The Homeowner Affordability and Stability Plan is twofold:
This plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. Many of the plan's details are still being worked out and will not be announced until March 4. Here is an overview of the plan's main components.
Refinancing Initiative
For those whose homes are in an "upside down" position, meaning the mortgage balance is more than the current property value, refinancing the mortgage may be possible. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.
According to the plan, "responsible" homeowners, those that have been making their payments, but are struggling to do so, can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.
As with the rest of the plan, details about this initiative will be released at a future date--including what, if any, credit score requirements will be included.
Stability Initiative
The stability initiative aims at providing help to individual families, as well as entire neighborhoods, by helping reduce foreclosures and stabilize home prices. Remember that a foreclosure in the neighborhood affects everyone - prices go down, property values are reduced.
This plan is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly. The goal of this initiative is simple: "reduce the amount homeowners owe per month to affordable levels." To accomplish this, lenders are encouraged to lower homeowners' payments to 31% of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with the Treasury Department sharing in the costs.
An important part is that homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.
This initiative also includes a number of additional elements and incentives, including an extra incentive for borrowers to keep paying on time. The initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years. It is important to note that both the refinance initiative and the stabilization initiative are for owner occupancy residences only. Neither plan is for investment property. My Comments
In a nutshell, we should all have hope of a recovery. This recession has been hard on all Americans. I truly believe that the first step out of this recession is the stabilization of the housing market. We would be silly not to take advantage of these soon to be available programs. March 4th is just a few days away, so pay close attention to news broadcasts and to my blog. I will keep you posted as to what steps to take. In the meantime, gather your documents together - 30 days of paystubs, the last 2 years of W-2's, and 2 months of bank statements (all pages). If self-employed, you will need the last 2 years of tax returns (all pages).
Granted, these plans will not help everyone. But, for the majority, those who did not buy more than they could afford, they are a lifeline. Grab onto and do your part to get this economy moving again.
About the Author
Mortgage Expert at Realestateloans.com
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