Why Now is the Best Time to Buy Columbia SC Real Estate
Anyone who picks up a newspaper, or switches on the nightly news sees all of the gloom and doom surrounding the real estate industry. No matter where you turn, it's all around like a dense fog with no end in sight. U.S. foreclosure levels are at all time highs and the glut of available homes on the market increases daily. With each passing month, adjustable mortgages claim additional victims and add them to the heap of homeowners facing foreclosure. Mortgage companies are failing and large lending institutions are forced to write off defaulted loans by the truckload. Throw in the concerns over the domestic economy and interest rates and you have the ingredients for that ugly word — "Recession."
In some areas, homes that were once going for $150,000 or more can be had for less than $100,000 now. Banks are practically giving properties away if you know where to find them.
Why are they doing this? It's simple, think of the current real estate market like a game of musical chairs. Every lender is trying to off load their properties before the music stops. There are only so many people willing to pickup these properties and inevitably someone is going to be left without a chair. Banks are in the business of lending money, not holding onto property. Every dollar tied up in a piece of real estate is a dollar that can't be put into the capital markets to earn a return. Shareholders don't like to see non-performing assets on the balance sheet at the end of the quarter or more importantly the fiscal year end. They don't care if the bank has taken a loss from the sale of a non-performing asset. As much as it doesn't make sense to the majority of people, this is the standard that banks are held to. Therefore, these banks have every incentive to get whatever funds they can for the houses that they have foreclosed on.
To learn more about why now is the best time to purchase real estate, give us a call, or drop us an email, or better yet, leave us a comment below and we'll get back to you. Don't worry, even though your email address is needed for your comment to go through our system, we are set up so your email address will NOT display on our site along with your comment… so feel free to post, and confident that your privacy will be maintained.
Avoiding Another Mortgage Meltdown
It's easy for Democrats to portray America's subprime loan crisis as a massive failure by a Republican led government and now 2 million American families could be about to lose their homes.
Perhaps democrats have a point. Many borrowers were confused and deceived by the tactics used to sell subprime loans. Largely unregulated mortgage brokers falsified borrowers' incomes, reaped steep commissions for steering them into unnecessarily costly loans, and misled them about the true cost of borrowing. Homeowners ignored the risks they were taking; government neglected its duty to warn them. There was a failure of individual responsibility but, much more than that, a failure of minimalist regulation.
Congressman Barney Frank, Democratic chairman of the powerful House financial services committee, recently introduced a bill that could help prevent a repeat performance.
The bill would eliminate some of the perverse incentives that warped the market for such loans. Mortgage originators would have a "duty of care" to make only those loans a borrower has a "reasonable ability" to repay. The bill would ban the bonus fees paid to brokers for putting borrowers in overly expensive loans.
Homeowners would be able to sue over improper loans, but investors who buy securitised mortgages would not be liable. The bill bars costly class actions and excessive damages, and offers a safe harbour from liability for loans that meet certain criteria.
This is a good first step towards responsible regulation. Pretending government has no role in the crisis is simply irresponsible.
What role do you think government should take in preventing another mortgage meltdown and foreclosure crisis in the future? We'd love to hear your opinion. Use the comment link below to tell us what you think. Your email address, although needed to send us your comment, will NOT be posted with your comment. We respect your privacy and do not publish anyone's email address here. We look forward to hearing your comments.
Carrying a Home Loan Into Retirement?
Start with this question: Should your goal be to pay off your home loan so you can live mortgage-free in retirement, or instead, should you aim to reduce your monthly loan payments, thus freeing up cash that can then be used for other things?
If you have a large savings nest-egg and a modest mortgage, go for the loan payoff. You might also think about trading down to a smaller home or, alternatively, work part time until you're rid of the mortgage.
One scenario, if you have cash sitting in a money-market fund held in a regular taxable account, also consider using these savings to reduce your loan balance. Your mortgage may be costing you just 6% and the interest might be tax-deductible, but your money-market fund is likely yielding only 5% — and you have to pay tax on that income.
One thing you DON'T want to do is cash out a 401(k) to pay down debt. A big 401(k) withdrawal would likely trigger a huge income-tax bill. You'd be better off slowly tapping your 401(k) or IRA to make your regular monthly mortgage payments. That way, you would also continue to enjoy the mortgage-interest tax deduction.
There are other options. If you don't think you'll ever get to live mortgage-free, consider getting the mortgage payment down as low as possible by refinancing or trading down to a smaller home. You might even refinance again later in retirement, further shrinking your monthly payment by extending your loan over 30 years.
Do you have any other suggestions or comments you might add to this article about carrying a home loan into retirement years? We'd love to hear your feedback. Leave us your comments by clicking the comment link below.
Choosing a Moving Company
Here are some tips to help avoid the pitfalls of making the wrong choice when it comes to moving, whether it's locally, or across the country.
- Is the moving company known to you, either through past experience or recommendation/reputation?
- Have you seen their vehicles and do they and the occupants present a good image?
- Have you seen the Company's premises and do they have adequate security? (Particularly important if your possessions are to be stored either short or long term).
- Does the company have any recognized quality standards such as ISO or FAIM?
- Does the company have sufficient resources to handle your move, or will they sub-contract part or all of it? (Beware of Brokers!)
- Does the company belong to any recognized association whose criteria include meaningful requirements for membership?
- If you're moving Internationally have you been informed of what shipping line your move has been scheduled on, the vessel's ETA, and whether transhipment is involved?
- Have you been given details of the destination agent who will be responsible for clearance and delivery of your shipment?
- Are you satisfied the insurance coverage offered is comprehensive and underwritten by a reputable Insurer?
If there is a moving company tip that we've overlooked, we welcome your added comments by using the comment link below.
Refinancing Your Home
Refinancing your home can be an excellent way to lower your monthly mortgage payment, raise cash, or consolidate debts with high interest rates. However, you need to do your homework before deciding to refinance.
One important factor is the difference between current interest rates and the rate of your original loan. You also need to take into account the amount of time it will take to recoup the costs of refinancing.
Keep in mind - refinancing usually lengthens the time it takes to pay off your mortgage. If you are 3 years into a 30-year mortgage and then refinance with a new 30-year loan, you'll end up making payments on the house for 33 years. Nevertheless, if the monthly savings are substantial enough, you still could end up paying much less over the long haul with the new loan.
Be careful of lenders offering 100 or 125 percent home equity loans, as their rates are often markedly higher than traditional lenders. In addition, any amount you borrow that is above the market value of the house is NOT tax deductible. Check with your tax professional on this.
Talk with your lender about the different types of refinancing loans available today. You should take some time to shop around and speak with several lenders before making a decision. Be sure to discuss all the expenses and benefits, as well as what will be expected of you, in advance. The more you educate yourself, the better your chances of finding the right refinancing package.
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