Home & Mortgage
Wed, 2010-01-06 12:55 | 
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Why Refinance a Mortgage?
When mortgage interest rates drop more than a percentage or so, some homeowners will decide to refinance their loans to get a better rate. Consider that average interest rates on fixed-rate mortgages have ranged from less than 7 percent in the late 1990s to more than 15 percent in the early 1980s, and you can see that refinancing can result in significant savings for the homeowner. A general rule of thumb is to...
Why Invest in a Home?
There are lots of reasons to buy a home: the pride of ownership, the freedom of owning your own lodging, and the comfort of moving out of a cramped apartment, to name but a few. But is home ownership a good investment? To begin with, homes have historically increased in value, creating perhaps the most common source of capital gains. According to the U.S. Census Bureau, median home values adjusted for inflation nearly quadrupled from 1940 through 2000. The demand for housing has never been greater, especially with the...
What Is the Purchase and Sale Agreement?
When it comes to buying a home, once you get to the purchase and sale agreement, you're almost there. Your feet feel like they've walked through every house in town and you have finally found one that fits your budget and contains most of your must-haves. It is time to make an offer, a process that deserves careful consideration and comes with some legal strings attached. When you make an offer in writing, you need to...
Trading Unmanageable Debt for Manageable Debt
If you are like many people who find themselves with too much debt, you may need to consider refinancing or consolidating your loans. You might find yourself in a predicament where no matter how hard you try, you just cannot cut expenses any further or earn more income. The only solution is to lower your monthly debt payments. There are only three ways to...
Should You Hire a Broker or Buy a Home on Your Own?
The decision to hire a real estate agent when you're buying a home isn't the no-brainer it once was. In the early 1990s, the question was, Which agent should you go with?, while the question now is, Do you even need one? When you are new to the world of home buying, signing up with a realtor can be...
Regulation Of Insurance and Real Estate
Insurance companies and their agents are primarily regulated by the insurance department of the states in which they are licensed to do business. However, insurance companies have diversified their products so much that they may also fall under the jurisdiction of other regulatory bodies such as the Securities and Exchange Commission (SEC) or Financial Industry Regulatory Authority (FINRA). For example, an ordinary life insurance policy must meet state requirements and is regulated by the state only, but a variable life insurance policy also has an investment component that falls under the FINRA rules. Each state has a commissioner of insurance who makes...
Reverse Mortgages
A reverse mortgage is a loan that enables homeowners 62 or older to borrow against the equity in their home without having to sell their home, give up title, or take on a new monthly mortgage payment. The loan proceeds can be used for any purpose, or taken out as a lump sum payment, fixed monthly payment, line of credit, or a combination. Here's how these loans work, in a nutshell:...
Real Estate Loans
Real estate loans include home mortgages, home construction loans, and loans to acquire various business properties. They also may include any improvements to physical properties, including additions, landscaping, parking lots, dividing and opening up rooms within a building, and adding such fixtures as fireplaces and swimming pools. Borrowers who take out...
Real Estate as Leverage
A key to successful real estate investing is leverage. Leverage allows an investor to use a small amount of cash to generate large returns. Here is an example of how it works: A hypothetical investor purchases real estate worth $100,000. The investor puts down $20,000 cash and borrows the difference ($80,000). If the investor later sells the property for $120,000 (a 20% gain) and pays off the $80,000 loan, he or she is left with $40,000. This represents a 100% return on the original $20,000 investment. A 20% gain on the sale of the property was leveraged into a 100% gain on the cash invested. Of course, this is an oversimplified example used to illustrate the meaning of leverage. We did not discuss income and expenses as well as other costs, such as...