Monday, December 30, 2013
Sunday, December 29, 2013
Friday, December 27, 2013
Thursday, December 26, 2013
Alternative Home Buying and Selling Strategies
NORFOLK, VA, Dec 26, 2013—In a dream world, every interested homebuyer would
qualify for a mortgage, and every seller would be able to sell their home in a
timely, efficient and stress-free fashion. However, that is not always the
case. In the following article, Louis Eisenberg, Associate Broker REALTOR ABR
SFR of Prudential Towne Realty takes us through two of the most popular alternative
methods for buying and selling when a mortgage may not be available.
Seller Financing
Also known as a purchase money mortgage, seller financing is when the seller agrees to “lend” money to the buyer to purchase and close on the seller’s home. “Usually sellers do this when money is tight, interest rates are high or when a buyer has difficulty qualifying for a conventional loan or meeting the purchase price,” explains Eisenberg.
Seller financing differs from a traditional loan because the seller does not actually give the buyer cash to complete the purchase, as does the lender. Instead, Eisenberg notes, it involves issuing a credit against the purchase price of the home. The buyer executes a promissory note or trust deed in the seller's favor.
The seller may take back a second note or finance the entire purchase if he owns the home free and clear, and the buyer makes a sizeable down payment and agrees to pay the seller directly every month.
The interest rate on a purchase money note is negotiable, as are the other terms in a seller-financed transaction, and is generally influenced by current Treasury bill and certificate of deposit rates. The rate may be higher than those on conventional loans, and the length of the loan shorter, anywhere from five to 15 years.
Lease options
“A lease option is an agreement between a renter and a landlord in which the renter signs a lease with an option to purchase the property,” says Eisenberg. The catch? The option only binds the seller; the tenant has a choice to make a purchase or not.
“Lease options are common among buyers who would like to own a home but do not have enough money for the down payment and closing costs,” explains Eisenberg. A lease option may also be attractive to tenants who are working to improve bad credit before approaching a lender for a home loan.
Under this arrangement, the landlord agrees to give a renter an exclusive option to purchase the property. According to Eisenberg, the option price is usually, but not always, determined at the outset, and the agreement states when the purchase should take place.
A portion of the rent is used to make the future down payment. Most lenders will accept the down payment if the rental payments exceed the market rent and a valid lease-purchase agreement is in effect.
“Before you opt to do a lease option, find out as much as possible about how they work,” cautions Eisenberg. And as always, have an attorney review any paperwork before you and the tenant sign on the dotted line.
For more information on buying a home, please contact Louis Eisenberg, Prudential Towne Realty, 109 E. Main Street, Norfolk VA 23510, leisenberg@prudentialtownerealty.com, 757-572-7244, or www.LouisEisenberg.com
Seller Financing
Also known as a purchase money mortgage, seller financing is when the seller agrees to “lend” money to the buyer to purchase and close on the seller’s home. “Usually sellers do this when money is tight, interest rates are high or when a buyer has difficulty qualifying for a conventional loan or meeting the purchase price,” explains Eisenberg.
Seller financing differs from a traditional loan because the seller does not actually give the buyer cash to complete the purchase, as does the lender. Instead, Eisenberg notes, it involves issuing a credit against the purchase price of the home. The buyer executes a promissory note or trust deed in the seller's favor.
The seller may take back a second note or finance the entire purchase if he owns the home free and clear, and the buyer makes a sizeable down payment and agrees to pay the seller directly every month.
The interest rate on a purchase money note is negotiable, as are the other terms in a seller-financed transaction, and is generally influenced by current Treasury bill and certificate of deposit rates. The rate may be higher than those on conventional loans, and the length of the loan shorter, anywhere from five to 15 years.
Lease options
“A lease option is an agreement between a renter and a landlord in which the renter signs a lease with an option to purchase the property,” says Eisenberg. The catch? The option only binds the seller; the tenant has a choice to make a purchase or not.
“Lease options are common among buyers who would like to own a home but do not have enough money for the down payment and closing costs,” explains Eisenberg. A lease option may also be attractive to tenants who are working to improve bad credit before approaching a lender for a home loan.
Under this arrangement, the landlord agrees to give a renter an exclusive option to purchase the property. According to Eisenberg, the option price is usually, but not always, determined at the outset, and the agreement states when the purchase should take place.
A portion of the rent is used to make the future down payment. Most lenders will accept the down payment if the rental payments exceed the market rent and a valid lease-purchase agreement is in effect.
“Before you opt to do a lease option, find out as much as possible about how they work,” cautions Eisenberg. And as always, have an attorney review any paperwork before you and the tenant sign on the dotted line.
For more information on buying a home, please contact Louis Eisenberg, Prudential Towne Realty, 109 E. Main Street, Norfolk VA 23510, leisenberg@prudentialtownerealty.com, 757-572-7244, or www.LouisEisenberg.com
Monday, December 23, 2013
Thursday, December 19, 2013
Remodeling: Do It Yourself or Go Pro?
NORFOLK, VA, Dec 19, 2013—With all of the DIY television shows on the air
these days, many of us are easily inspired to tackle home improvement projects
ourselves. While taking on a task solo can sometimes be cost effective, if the
project is too large, or your skills fall short, you can end up costing
yourself more in the long run--financially, and in terms of time and stress.
Louis Eisenberg, Associate Broker REALTOR ABR SFR of Prudential Towne Realty offers us a few words of wisdom that may help you decide if you want to hire outside help when remodeling.
“There are a lot of factors to consider when making this decision,” says Eisenberg. “A lot will depend on your time, level of expertise or willingness to handle the job, amount of help from friends or relatives, and how much you want, or need, to save by doing the job yourself.” If you rely on your own elbow grease, you could save up to 20 percent of the project cost. However, if you have a critical blunder, you will have to pay someone to redo your mistakes.
There are several do-it-yourself books that offer guidance, and some home improvement stores, such as Home Depot or Lowe’s, offer classes that can be helpful getting you on the right track.
Be aware, however, that you may end up spending more time, and up to double your estimated budget, if problems arise.
Also, notes Eisenberg, you may have difficulty selling your home if the workmanship looks shoddy.
“Unless you are very experienced, home improvement experts suggest that you stick to painting, minor landscaping, building interior shelving, and other minor improvements,” suggests Eisenberg.
Remember, too, that you may need to deal with local agencies to get permits, inspections, variances, and certificates of occupancy.
For more remodeling information, please contact Louis Eisenberg Realtor, Prudential Towne Realty109 E. Main Street, Norfolk, VA 23510, leisenberg@prudentialtownerealty.com, 757-572-7244, or www.LouisEisenberg.com
Louis Eisenberg, Associate Broker REALTOR ABR SFR of Prudential Towne Realty offers us a few words of wisdom that may help you decide if you want to hire outside help when remodeling.
“There are a lot of factors to consider when making this decision,” says Eisenberg. “A lot will depend on your time, level of expertise or willingness to handle the job, amount of help from friends or relatives, and how much you want, or need, to save by doing the job yourself.” If you rely on your own elbow grease, you could save up to 20 percent of the project cost. However, if you have a critical blunder, you will have to pay someone to redo your mistakes.
There are several do-it-yourself books that offer guidance, and some home improvement stores, such as Home Depot or Lowe’s, offer classes that can be helpful getting you on the right track.
Be aware, however, that you may end up spending more time, and up to double your estimated budget, if problems arise.
Also, notes Eisenberg, you may have difficulty selling your home if the workmanship looks shoddy.
“Unless you are very experienced, home improvement experts suggest that you stick to painting, minor landscaping, building interior shelving, and other minor improvements,” suggests Eisenberg.
Remember, too, that you may need to deal with local agencies to get permits, inspections, variances, and certificates of occupancy.
For more remodeling information, please contact Louis Eisenberg Realtor, Prudential Towne Realty109 E. Main Street, Norfolk, VA 23510, leisenberg@prudentialtownerealty.com, 757-572-7244, or www.LouisEisenberg.com
Friday, December 13, 2013
Tuesday, December 10, 2013
Mortgage Madness: What you need to know right now
NORFOLK, VA, Dec 10, 2013—Weeding through all of the available information
on mortgage rates can be exhausting. From trends to current percentage
fluctuations, there is always a surplus of information at your fingertips.
Below are three things you should know about today's mortgage arena, provided
by Louis Eisenberg, Associate Broker REALTOR ABR SFR of Prudential Towne
Realty.
They're on the way up – but still look good. Today's rates are higher than they were a year ago, but they're still relatively low. Recently, mortgage rates were weighing in around 4 percent, which isn't as low as 2012's 3 percent, but is still a great rate.
They shouldn't stop you from buying. If you're waiting to purchase a home because you think mortgage rates may drop – don't. While mortgage rates do increase and decrease slightly from month-to-month, larger changes happen extremely slowly. “If a fraction of a percent increase or decrease dramatically changes how much house you can buy, then you may be shopping a bit out of your price range,” explains Eisenberg.
There could be upcoming changes. The Federal Reserve has been keeping interest rates low by purchasing billions of dollars' worth of mortgage-backed securities every month, called Quantitative Easing. The Fed admits that this program may not be around much longer, and that when it is eliminated, mortgage rates will spike. “This is only a speculation, but it is still something to keep in mind if you're deciding on the right time to buy,” Eisenberg notes.
For more real estate information, please contact Louis Eisenberg, Associate Broker, Realtor, Prudential Towne Realty, 109 E. Main Street Norfolk, VA 23510, leisenberg@prudentialtownerealty.com, (757) 572-7244, or www.LouisEisenberg.com
They're on the way up – but still look good. Today's rates are higher than they were a year ago, but they're still relatively low. Recently, mortgage rates were weighing in around 4 percent, which isn't as low as 2012's 3 percent, but is still a great rate.
They shouldn't stop you from buying. If you're waiting to purchase a home because you think mortgage rates may drop – don't. While mortgage rates do increase and decrease slightly from month-to-month, larger changes happen extremely slowly. “If a fraction of a percent increase or decrease dramatically changes how much house you can buy, then you may be shopping a bit out of your price range,” explains Eisenberg.
There could be upcoming changes. The Federal Reserve has been keeping interest rates low by purchasing billions of dollars' worth of mortgage-backed securities every month, called Quantitative Easing. The Fed admits that this program may not be around much longer, and that when it is eliminated, mortgage rates will spike. “This is only a speculation, but it is still something to keep in mind if you're deciding on the right time to buy,” Eisenberg notes.
For more real estate information, please contact Louis Eisenberg, Associate Broker, Realtor, Prudential Towne Realty, 109 E. Main Street Norfolk, VA 23510, leisenberg@prudentialtownerealty.com, (757) 572-7244, or www.LouisEisenberg.com
Friday, December 6, 2013
Wednesday, December 4, 2013
Monday, December 2, 2013
Home Improvement: Financing Your Project and Mechanic's Liens
NORFOLK, VA, Dec 02, 2013—If you're currently looking to remodel your home but aren't sure how to finance it, you're in luck. There are many ways to finance a remodeling project, explains Louis Eisenberg, Associate Broker REALTOR ABR SFR of Prudential Towne Realty. If you have equity in your home, a good credit rating, and steady income, you can refinance your mortgage and borrow a percentage of the equity to cover remodeling costs.
“Refinancing is a good option if you can get a mortgage interest rate at least two percentage points below your current home loan rate,” says Eisenberg.
Other options include a second mortgage, a home equity loan, or an unsecured loan. Less popular options: margin loans, which are taken against securities you own; and loans from retirement plans, life insurance policies and credit cards.
Remember that if you're hiring contractors for work, you need to be able to pay them. “If for any reason you can't, they can take out a mechanic's lien – a “hold” against your property that provides contractors and suppliers legal recourse to assure payment for services,” notes Eisenberg.
The liens vary from state to state and allow for a cloud on the title of your property and foreclosure action. Also, if you paid the contractor, but he failed to pay the subcontractors and laborers – who do not have a contract with you – then the workers may file a mechanic's lien on your home.
“This could result in a double payment by you for the same job,” explains Eisenberg. “You can protect yourself from unwarranted liens by selecting your contractor carefully and managing your construction project responsibly.
“Also, most construction lenders will specify a payment distribution process that involves the securing of lien waivers,” Eisenberg continues. The remodeling contract should address this as well, assuring that the general contractor is responsible for all payments as well as any costs required to remedy lien disputes that may arise.
For more information on refinancing, please contact Louis Eisenberg, REALTOR, ABR, SFR, Associate Broker, Prudential Towne Realty, 109 E. Main Street, Norfolk, VA 23510, leisenberg@prudentialtownerealty.com, (757) 572-7244, or www.LouisEisenberg.com
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