How to Calculate Cash Flow When Buying an Investment Property

Whether you're a seasoned or new investor, calculating cash flow on a potential rental property is a critical part of your analysis before buying.  You need to make sure you crunch the numbers completely before deciding to invest your money and getting the cash flow calculation right might be the best investment you can make. Basic Ingredients of Cash Flow First, gather the property's current and potential rental income. Whether you're buying one unit (single family home) or a multi-unit property, find out what the current rental income is and compare it to…continue reading →

Here’s What You Need to Know About a Condo Loan

On the surface, everything looks the same when you apply for a mortgage to purchase a condominium. You get pre-approved for the mortgage before you ever make an offer on a home so you know your purchase price range and maximum mortgage amount. Once you have an accepted offer, you take all the steps to comply with your purchase agreement like making your initial deposit into escrow, locking in your interest rate and paying for the appraisal. Although you know your new home comes with a monthly Homeowners Association dues payment, that's got…continue reading →

What Exactly Do You Get Pre-Approved For?

You're finally ready to become a homeowner, and you want to do everything right in the process. According to your research, realtor, family, and friends - the first step is getting pre-approved by a mortgage lender. The problem is, no one can explain what exactly 'pre-approved' means. A mortgage pre-approval approves you for only one number and that is NOT the purchase price. A loan pre-approval is not a loan officer doing a quick review of your information and generating a maximum purchase price that you can afford. In reality, a pre-approval is…continue reading →

My Offer for a Home Purchase Is Accepted! Now What?

You finally get the call from your Realtor and hear the words “They accepted your offer!” It’s been a long, hard road to find a home you love, and harder still for a seller to agree to let YOU be their buyer. Now you’ve crossed this hurdle, but you’re not sure what happens next. Does your Realtor take it from here or your loan officer? Are you supposed to do anything? The answer is - it’s a team effort -- the team of professionals you assembled before making offers, and that includes you.…continue reading →

The Rest of the Four C’s: Credit, Capital, and Collateral

To understand how the underwriter looks at your information, you need a detailed explanation of the remaining three C’s.  Each C covers a lot of information, and the impact of government regulations push and pulls all of it outside the boundaries of common sense. Looking at the process may shed light on the underwriter's decision process. This blog post is second in the series of two blog posts. Read the first here about the 1st C - Capacity Credit is the most well known of these three categories, and the least understood.  A…continue reading →

Borrowing Down Payment from 401k or IRA for Home Purchase

Securing a down payment is often cited as the biggest challenge for buying a home - both for First Time Home Buyers and Move-up Buyers. To overcome these challenges, you can consider borrowing from retirement funds - 401k and IRA. Here is how it works. Borrowing Against 401k for Down Payment   How Much Can I Borrow From My 401k? You can borrow 50% of your vested balance or $50,000 whichever is lower. How Do I Pay It Back? The repayment term is usually between 5 and 15 years. The payment which includes…continue reading →

Can I Buy A Home Before Selling My Current Home?

If you have lived in your current home for a few years and thinking of moving up, i.e. buying a bigger and better home, the question that you are most likely thinking is - "Can I buy that home before selling my current home?" Advantages of Selling before Buying: You won't have to qualify for two mortgages at the same time. You will have more cash to put down on the new home (assuming you have built some equity in your current home). Since you would know exactly how much you netted from…continue reading →

Get Your Offer Accepted in a Seller’s Market

Even with a minor slow down in home sales during recent months,  desirable properties are still getting multiple offers. Make no mistake, we are still very much in a seller's market. Available housing inventory ranges from low to non-existent in many neighborhoods. With low mortgage rates still pervasive and rapidly increasing home values - buyers and soon-to-be sellers are eagerly hitting the market in search of a home. It might be their first home or it might be a long awaited move-up home purchase, regardless the buyers are ready and waiting for any…continue reading →

Huge Mortgage Missteps to Avoid When Buying A Home

The process of buying a home is just that - a process. Like with any major process there are a multitude of potential missteps to avoid. Let's discuss three huge ones. Failing to Consider Your Spending Habits and Expenses Lenders qualify you for what you technically can afford based on review of income documents and debts listed on your credit report. Your monthly debt-to-income ratio is primarily calculated this way . Your disposable income -  passions, hobbies, habits and vices - is not part of the equation mortgage lenders, but it definitely should…continue reading →

New Departure Residence Guidelines Helping More Buyers Qualify

  During the height of the financial chaos and housing meltdown, Fannie Mae and Freddie Mac made some sweeping changes for current homeowners looking to buy a different home. Coined the “departure residence” - or “principal residence conversion -  by Fannie Mae and Freddie Mac, the set of rules and guidelines put in place in early 2009 that prevented throngs of would be home buyers from making the jump. A mere 7 years later, both Fannie Mae and Freddie Mac have finally decided to ditch their “temporary” and cumbersome departure residence guidelines for…continue reading →

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