Archive for the 'Universe Of Real Estate' Category

Purchasing Spanish Property: an Explanation of the Legal Process

Many foreign countries have different regulations regarding the buying and selling of property; this includes Spain where such transactions are regulated. As such hiring an English speaking lawyer would be advisable. Make sure that the Spanish property is free of restrictive clauses and debts. The best thing to do, when researching your purchase, is to hire a lawyer to check the background of any Spanish property you are considering. They will also be able to check the Nota Simple, verifying the property is registered. Your chosen solicitor should be able to check the registry of the property, which will show if the property is owned by the vendor, as well as any outstanding mortgages.

There are two different categories in the Spanish legal processes for the purchase of property. First you have the Contrato privado de compraventa, or the preliminary contract, and then you have the Escritura de compravents, or completion contract.

Once the buyer and seller are in agreement on the price then they need to sign a preliminary sales contract. The vendor needs to be able to provide proof that he or she owns the property, and that it is free of any charges, Before this Contrato privado de compraventa will be signed. It is Spanish law to charge all outstanding debts to the actual property, and any remaining Spanish mortgage would be the new owner’s responsibility. Nota Simple documents were developed to validate if a property has an outstanding debts.

The completion date, overall price, and property description will all be elaborated in the preliminary sales contract. A 5% to 15% deposit of the final purchase price will be required. A bonded client account is where the funds will be kept for you. A person would theoretically be able to sign the initial sales contract without a deposit, but it isn’t necessarily a good idea.

The Escritura de compraventa stage, is the second or final contract stage. The customer will need to pay all fees and the price of the product on the date of completion. Both the vendor and the buyer must sign the contract at the same time. This contract is equivalent to a deed on the purchased property. In front of a Notary Public the buyer will receive the deed of conveyance which is known as escritura in Spain. A photocopy of the deed will be provided to the tax official and property registrat to ensure everything is legitimate. In Spain, all deeds of sale must be witnessed by a Notary Public, which is a public official in that country. However, you need to have your own legal counsel to protect your own interests during the transaction. Part of the fees for purchasing include property tax, and legal fees for your Notary Public.

Home Equity Mortgages

Home equity mortgages are loans that use the equity on the home as collateral. Home equity is the difference between the current value of the home and the amount owed because of the mortgage/mortgages. A home equity mortgage can also be said to be a second mortgage since the extra cash generated can be used for home improvements, thus increasing the value of the house further.

Like regular home mortgages, home equity mortgages also use the property/ home as the security. In case of default, the lender has the right to take over the home. There are many advantages of taking a home equity loan: it would reduce the current loan burden if taken at a lower rate; the funds generated can be used to pay off high interest debts like credit cards; sometimes, home equity mortgages enable some tax savings; they can be used to exchange the present mortgage for a shorter term mortgage. Other advantages include: lower closing costs, and faster closing.

Home equity mortgages are ideal for people who are planning to use their home equity to finance something else. They are also good when the borrowers are planning to sell their house soon, since short-term equity loans have lower rates. Equity mortgages are preferable when the loan amount is smaller. Generally, equity mortgage rates are higher than first mortgage rates. They are also riskier because of their second-lien position. The rates of home equity mortgages depend on the frequently changing Wall Street Journal prime rate. Long-term home equity loans tend to have higher rates than even fixed rate mortgages.

With increasing real estate prices, many people are considering home equity mortgages. Lenders are also giving many attractive offers on equity mortgages. A good past credit rating is an important prerequisite for obtaining a home equity mortgage. The best source for knowing about home equity mortgage rates is the Internet. Most mortgage loan companies provide information through their websites also. These rates are updated daily. Their sites also have easy-to-use home equity mortgage calculators that give all information, including payments to be made each month and the tax advantages, with the single click of a button. Most of them also have financial advisors who would provide advice online, or over the phone.

Home Mortgages provides detailed information on Home Mortgages, Home Mortgage Rates, Home Equity Mortgages, Home Mortgage Refinance Loans and more. Home Mortgages is affiliated with Compare Home Mortgage Interest Rates.

What is a Tracker Mortgage?

A tracker mortgage ‘tracks’ the Bank of England base rate, meaning your mortgage stays in line with interest rates and the market in general. The result on your monthly mortgage interest payments is that they go up when the base rate goes up and go down when the base rate goes down.

A tracker mortgage works in a similar way to a standard variable rate mortgage in that it follows the rate imposed by the Bank of England. Whereas the standard variable rate mortgage changes monthly or annually a tracker mortgage usually guarantees to follow changes in the bank base rate within 14 days of it happening. Thereby the borrower benefits from both falls and rises in the interest rates sooner.

A tracker rate is one that has a fixed differential to the Bank of England rate and is contractually bound to change within a certain time of the Bank changing its rate. Thus, the tracker mortgage might follow the base rate up and down as it fluctuates. The mortgage lender will make profit by charging an amount over the base rate.

This kind of mortgage is useful for people who are happy for their outgoings to change, but want their mortgage to reflect the changing costs of borrowing. Tracker mortgages are often suited to borrowers who are looking for cheap initial payments and can take the risk that their payments could increase at a later date.

The main difference from a variable rate mortgage is that a tracker mortgage will be guaranteed to go up and down with changes to the interest rates. A variable rate mortgage will not.

There are three basic types of tracker mortgages: ones that track the base rate for the life of the loan; and those that run at an agreed differential to the base rate for a given amount of time before returning to the standard variable rate; and finally those in that the lender promises that the difference between the base rate and the mortgage rate will not go beyond a certain level.

When people are remortgaging, it’s tempting to be attracted to the best mortgage rate on the market, which often tends to be a discount or a tracker mortgage.

You may freely reprint this article provided the author’s biography remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

Need More Income from Your Investment Property?

The goal of every real estate investor is to see their property appreciate in value and to have it generate a positive cash flow. The appreciation normally takes care of itself if the property is of good quality, in a good location, and is held over a long enough period of time. Just like the stock market, real estate has proven to go up way more than it goes down over time.

The positive cash flow component is not always a given though. Ask any seasoned investor, and unless the property is owned free and clear, there have probably been times when he’s had to dip into his own pocket to pay for some aspect of his rental. Who hasn’t seen a raise in homeowner’s fees, property taxes, an outlay of cash for a new roof, plumbing, paint, carpet, appliances, or a length of time supporting it between tenants.

So, what if you’re nearing retirement age and see the need for increased and steady income? You may even look forward to taking a permanent break from the “joys” of hands-on property management. We all deserve to reap the rewards of our labors, right?

Basically, to meet these goals, one can do one of two things.

1. Sell the property, pay all the capital gains taxes, recaptured depreciation, etc. and pocket what is left. To receive an income, one would have to either live off whatever interest/gains your proceeds produced, or begin depleting your funds to provide you with the amount of monthly income you deem necessary. Depending on your age and financial needs and whether or not you desire to leave as large a legacy as possible, this approach may or may not work for you.

2. Employ a strategy that will defer the payment of any tax or depreciation. Let all of your gains continue to work for you throughout the course of your retirement and into the next generation. Yet, you will still get a significant and partially tax deductible monthly income.

What strategy is #2? If your property is over a million and you are not a young retiree, you might consider a Private Annuity Trust. You will get monthly income for the rest of your life, but you will be depleting your asset and only spreading out the repayment of capital gains tax over a longer period of time. That is a simplification of a complex agreement, but that is the gist.

A better option may be a 1031 exchange into a tenant in common (TIC), Basically, you exchange your property for a deeded partial interest in a grade A commercial property. You sign a contract with a property management company, and in turn receive a monthly income (typically 6-7% of your total equity). You never have to deplete your asset, and it can pass to your heirs at the stepped up basis.

The 1031/TIC exchange is a fairly new concept, sanctioned by the IRS in 2002. It is projected that the influx of property assets into this type of exchange will be close to 5 Billion dollars in 2005. That’s a lot of equity. Why not let your equity continue to work for you instead of parting with a lot of profits that would take you years to replace.

Paula Straub - EzineArticles Expert Author

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Mortgage Loan Good Faith Estimates

If you are shopping for a mortgage it is important to understand the Good Faith Estimate mortgage lenders are required to provide you. This estimate will allow you to compare loan offers from a variety of mortgage lenders. The Good Faith Estimate will help you make an informed decision as to which mortgage offer is best for you; here is what you need to know about the Good Faith Estimate.

Mortgage lenders are required by law to provide you a standardized form known as the Good Faith Estimate three days after receiving your application. The Good Faith Estimate outlines all costs and fees associated with the mortgage you are applying for. Never commit to a mortgage without carefully reviewing the Good Faith Estimate.

This form is useful as it allows you to comparison shop mortgage offers based on fees lenders charge. The form can be confusing for the initiated; here are things you should consider using the Good Faith Estimate when shopping for a mortgage.

Points

The Good Faith Estimate will list any discount points the lender requires at closing. Make sure you are getting something in exchange for paying points; Points are generally paid up front in exchange for a lower interest rate. The conditions for the required points should be clearly outlined by the lender.

Interest Rate and Lender Fees

Your interest rate should be clearly explained on the Good Faith Estimate. This should have the actual interest rate, not just the introductory rate. If you are applying for an adjustable rate mortgage it should also outline the timeframe your lender will use when adjusting the interest rate and whatever caps are included.

Title Fees, Escrow, and Closing Costs

The closings costs include any escrow fees, title insurance and search, and taxes should be itemized on your Good Faith Estimate. Pay close attention to closing costs as these are subject to negotiation and vary form one lender to the next. If your title insurance is less than five years old you might save money by having the policy reissued; contact your title insurer to find out if this is a possibility. Shopping around for title insurance could also net you a lower price.

While the Good Faith Estimate is an excellent way to compare fees from various loan offers, it is still an estimate; these fees could go up at closing. To learn more about shopping for the best mortgage loan and avoiding common homeowner mistakes, register for a free mortgage guidebook.

Louie Latour - EzineArticles Expert Author

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

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Mc Lean Mortgage Refinance

What Do The Terms APR, AER And EAR Mean?

Mortgage lenders have a derogatory name for people who switch mortgage lenders to follow lower rates - they call them “Rate Tarts”. The author has a much more apt description - Shrewd Shoppers! After all, who spends more for exactly the same product, in this case money, when you can get it cheaper elsewhere? After all a £ from one lender as effective as a £ from another!

The mortgage market is highly competitive and as long as lenders use price as the main weapon in their marketing platform, price competition will encourage remortgagers to follow cheaper deals. Call them Rate Tarts if you must, but they’ll be the richer for it!

In a response to curb mortgage switching, some lenders have raised their up-front charges and others improved their customer retention programmes. In such a competitive market, accolades will be awarded for the best customer retention programmes but raising up front charges, will simply reduce the lenders market share, albeit on improved profit margins. It seems that lenders still have to learn that carrots are better than sticks!

For example, Birmingham Midshires currently offers a 3.89% two year fixed deal. This looks like a clear bargain until you read the small print - the arrangement fee is not the market average of £500, it’s a massive £1,499! If you write off the fee over two years at £749.50 per year, it’s equivalent to an additional three quarters percent interest on a £100,000 mortgage.

So if you are tempted to remortgage you need to do two things. Firstly add up all the costs of moving your mortgage. Remember to add in the valuation fee (typically £250 on a £100,000 mortgage), the arrangement fee (typically £500), maybe a booking fee (£50?), legal fees to switch the mortgage (usually around £350 on a £100,000 mortgage), plus the cost of any penalties you’ll be charged to exit your existing mortgage.

Now it’s time to phone your existing lender.

Tell them you are considering moving you mortgage for a better deal. Unless you put pressure on them, lenders frequently work on the principle that provided they offer a fairly attractive deal, customer apathy will prevail. They rely on the fact that many borrowers will be happy to sit tight and avoid the cost, time and trouble of remortgaging. So shake their tree and see if a better deals falls out. If they simply offer you their standard variable rate they don’t deserve your business!

Once you have fully assessed the costs of moving, found the best new deal you qualify for, and got your existing lender to quote for keeping your business, you can make the comparisons and a clear decision.

Brokers Online is one of the largest finance websites in the uk, they provide access to life insurance quotes and most UK financial services including remortgages. More information - How Do I Know If I Should Switch Mortgages?

Brokers Online are a uk finance site who aim to educate their clients BEFORE they purchase. We offer access to cheap life insurance and most UK financial services including

5 Must-Know Tips for Shopping for an ARM - Part 2

If one is investing in real estate and has decided to use an adjustable-rate mortgage (ARM throughout the rest of the article), then they must be positive that they are well-prepared to push aside the lender’s antics and evaluate the different loans using their own knowledge and information. In the list below, five vital tips for evaluating an ARM are mentioned along with a brief explanation of each.

1.) Check the Periodic Interest Rate Adjustment Cap - This is the nasty fellow that can cause negative amortization and the end of one’s real estate endeavors. When shopping for an ARM, make sure that it has a cap on the periodic interest rate increase. Most ARMs adjust their rates every six or 12 months, but some are shorter such as monthly. Often caps of 2% are placed on the rate increase amount, but if there is no cap this means that during times of rapid rate increases, the borrower’s loan payment will get completely out of control.

2.) Check Monthly Mortgage Payment Cap - This tip goes hand-in-hand with tip one. Sometimes the lender performs trickery where they will cap the monthly payment, but not the periodic interest rate adjustment. When this happens, the interest owed by the lender may cause the monthly payment to increase, yet the payment doesn’t increase because the monthly mortgage payment is maxed-out at its cap. This causes the interest to then be added to the loan balance, and PRESTO….the borrower is paying interest to the lender until they die or pass the burden to their children! Payment caps are fine, but make sure the periodic interest rate increase is also capped.

3.) Lifetime Interest Rate Cap? - A good ARM will often have a cap on the amount the loan’s interest rate can travel upward throughout its lifetime. Often this is between five and seven percent over the initial (teaser) rate. This can be a life saver if one gets an ARM and interest rates continue to drive higher over the following decade.

4.) Negative Amortization - As mentioned in tip two above, avoid this nasty beast and live your life happier. If one is unsure exactly how to figure the possible rate/payment increases and is getting all confused with this math stuff, than simply go to a search engine, type in “negative amortization”, and browse through the various web sites until one is found that makes since or if one has a trusted lender, they can ask them for the exact details and warning signs.

5.) Points - As with any mortgage, one must make sure that when the interest rate is quoted the points are right beside it holding hands. A point represents one percent of the loan, meaning that one point on a $100,000.00 mortgage is $1,000.00. If points are charges on a loan, they are paid up front when the loan is closed. Often people try and search for loans that require no points to paid, but there is always a trade-off. The lower a loan’s points, often the higher its interest rate will be.

Remember, ARMs can be a great investment tool, but the borrower should always be well-prepared and able to breakdown the loan’s attributes without relying completely on the often-times self-beneficial advice of the lender. Remember, knowledge is power!

The author is the founder and owner of both ManageYourRentals.com and LandLordDocuments.com.

Best Refinance Mortgage Rate - Improve Your Odds of Getting a Low Rate

Obtaining a mortgage refinancing has several benefits. However, the
only way to realize these benefits is to qualify for a low rate mortgage.
Even though refinancing a home is ideal for securing a fixed rate
mortgage, without acquiring a lower rate, you may not save on your monthly
mortgage payment. If you are hoping to obtain a low rate mortgage, there
are steps you should take.

Establish a Good Payment Record with Existing Mortgage Lender

When applying for a refinancing, the mortgage lender will carefully
review your credit and assess your payment history with current mortgage
lender. Individuals with a good payment record can expect a low rate on
their refi - especially if their credit score is high. On the other
hand, if you have poor credit, and have submitted several late mortgage
payments, a refinance lender may consider you a risky applicant.

Risky applicants may have their refinance application denied. If the
application is approved, the lender will likely remit an offer with a
high interest rate. In this instance, refinancing is not very beneficial.
The ultimate goal is to save money. However, if the savings are
minimal, it is not worth the costs to refinance.

If you are contemplating a refinancing, attempt to submit all mortgage
payments on time. Furthermore, reduce unnecessary debts, which may
boost your credit rating. Homeowners with a good credit score have a better
chance of securing a low rate refi.

Compare Various Refinance Mortgage Lenders

Making a side-by-side comparison of various mortgage lenders is very
effective. After requesting a mortgage quote, lenders assess an
applicant’s situation and make them an offer. Lender offers will vary. By
comparing lenders, you have the power to select the loan package with the
lowest refi rate. Those who neglect comparing lenders risk accepting a bad
refinancing offer.

Refinance When the Time is Right

Because of declining mortgage rates, many homeowners are jumping on the
refinance bandwagon. However, now may not be the right time to create a
new mortgage. Prior to applying for a new mortgage, you should consider
a few factors. How long do you plan on living in the home? Will a
refinancing create a noticeable savings? What is your credit standing? Do
you have the funds to pay closing costs?

Refinancing while rates are low is great for obtaining a low, fixed
rate mortgage or lowering monthly payments. However, if your current rate
is comparably low, or you anticipate a move in the near future,
refinancing may not be the wisest choice.

View our
Recommended Refinance Lenders Online.

Carrie Reeder owns ABC Loan Guide, an online resource with information about Mortgage Brokers
Online and Bad Credit Mortgage lenders online.