Review Category : Real Estate

When Is The Right Time To Refinance?

With the Fed recently raising interest rates, many people have started to wonder if they should act on the refinance now or wait to see what happens with interest rates.  If you are buying a new home, thinking about refinancing your mortgage, or just wondering where this is all headed, it is a good time to start crunching the numbers and examining the current mortgage you have in place.  So, when is the right time to refinance? Side note: There is “Rule Of Thumb” – the rule of thumb really boils down to a math equation which I will lay out for you here in the article. Question 1: What Is This Going To Cost You? There is always a cost to refinance. Sometimes you will hear on television these deals that say no closing costs or no cost to refinance.  What some companies do is simply roll those closing costs into the newly refinanced loan so instead of refinancing ...

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Should You Buy A Home Before Amazon Makes A Decision

Amazon will soon announce the winner of its HQ2 parade, with one city emerging victorious to get on the back of Jeff Bezos and ride him like Secretariat for the Triple Crown.  There are all sorts of interesting statistics on what an Amazon HQ will do the economy of the city it picks and even recently there were odds thrown out with Boston as the 5/1 to favorite.  If sports betting becomes legal in time in all states, would you take this bet? One financial decision to consider now in the cities that believe they have a chance to reel in Amazon for HQ2 is whether or not to buy real estate betting that prices will soar through the roof like they have in Seattle over the past five to ten years.  The bet is to get in the real estate now before prices explode after the announcement.  It’s almost like betting on an earnings report on Wall Street or ...

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5 Key Points To Know When You Decide To Refinance

With the Fed recently raising interest rates, people have already started to write and call me about whether or not it is still a good time to refinance.  You will likely see more offers from your current mortgage company, broker, or bank looking to get you locked in before the Fed raises rates again in 2017.  Here are my smart money moves to five key points to know when you make a final decision about whether a refinance is good for your property. There Is NO Rule Of Thumb — I love these random articles out there that say your mortgage rates needs to be down by a certain percentage for a refinance to make sense. In fact, Investopedia recently wrote, “The typical rule of thumb is that if you can reduce your current interest rate by 0.75-1%” This makes very little sense to me as this is going to be a math equation because all refinancing costs money.   What you are ...

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Do You Need An LLC For Your Rental Property?

With interest rates continuing to hover around record low rates, Gen X’ers and Baby Boomers are swallowing up investment properties all around the United States.  Even though last week an article came out from the N.Y. Times that home ownership is down to a record low of 62.9% (which is the lowest in fifty years), the developments being built around your neighborhoods seem to continue to sell at a record rate. One of the main questions we get all the time from people who buy investment real estate or rental properties centers around whether to hold the property individually, hold it in an LLC, and whether or not you need a separate company if you plan to manage these properties on your own. Let’s go through an example of why you might want to have an LLC.  You have a tenant who has rented your property up on the lake this summer.   They decide to bring a few friends out ...

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Five Money Considerations Before You Move

Whether you decide to move across town or across the country, at some point your family is going to be faced with a move. As you grow within a corporation, it’s likely at some point they will ask you to move from one city to another.   This means the financial decisions you make could have a substantial impact on your bottom line.  Here are five money considerations you should think about before you make the move. Rent or Sell – Since you don’t always know how long you’ll be in a city, buying a home is a big family financial decision. If you relocate to another city, an even bigger decision could be whether or not you should sell your existing house or rent it out.   Make sure you review items such as seller costs, moving costs, whether or not you want to be a landlord and what you could get for market rate rental income before you make this ...

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Pay Off The Mortgage Or Invest The Money

One of the most difficult questions that I get from both younger and older clients is whether or not it is a good idea to pay off their mortgage or invest the money?  With interest rates continuing to hover around all-time lows, many people are still in the process of refinancing their existing homes or buying a new one.   If your rate is in the 3% to 4% range, you may be wondering if you should take your excess monthly discretionary income to pay down your home note faster or would it be a better idea to take that cash and invest it for the long term.    This decision has both financial and emotional ramifications, so let’s review the pros and cons of paying off your mortgage. The first part of this analysis is the black and white calculation on whether your money can work harder for you than the interest rate you are paying on your debt.   Let’s say, ...

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How To Buy A Private Island

Since House Hunters is probably one of the most popular shows on HGTV, it only stands that each network must expand their content to continue to keep their audience engaged.  HGTV went from House Hunters to International House Hunters to Tiny Homes to a new show now called Island Hunters.  Yes, these are people who need to get away from it all whether it be in the northern regions of Canada down to the Caribbean.   So, just how does someone know what it is really going to cost to get your own private island? According to Business Insider, there’s an entire culture surrounding the purchase and management of private islands. Calling themselves “isolamaniacs,” these people tend to be independent, intrepid travelers who aren’t afraid of a challenge. Tech billionaires like Larry Ellison and Richard Branson have plopped down millions for their own slice of paradise in Hawaii and the British Virgin Islands, respectively. However, you don’t have to be a billionaire ...

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Why Buying An Expensive House Is A Terrible Idea Now

The recent hike by the Fed for interest rates and their 2016 guidance will certainly have a big impact on how the bond and stock markets perform in 2016.   While housing has been red hot over the past six years, here are three reasons why buying an expensive house is a terrible idea now as interest rates climb over the next twelve to twenty four months. INTEREST RATE AND HOME PRICES- Remember, that as interest rates rise it means that new mortgage payment will cost Americans more money on a monthly basis for the same amount of mortgage.  Just as prices have risen during this declining low interest rate environment, as interest rates rise you will see the higher end of the real estate market decline.  Where else could it go if interest rates go up by 1% or 2%?  In addition, you will see the assessments for your local and county taxes go up as it pertains to your ...

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Is it Time To “UPGRADE” Your Home

Your children are getting older and you need more space.  The commute to the office is getting unbearable.  Congratulations…you just got the promotion you have earned through years of hard work.  Now it’s time to buy that new home that you have been dreaming about.  What should I do next to turn this dream into a reality? Many people jump in their cars or start searching the internet to look for that new home.  STOP!  Here are three important steps that will help you avoid wasted time and potentially give you an advantage throughout the buying process. How is your credit? Your ability to qualify for a mortgage will primarily be based on your income and your credit standing.  We all think we pretty much know what is on our credit report and our FICO scores.  Surprise!  That’s not always the case.  Many credit reports have inaccuracies that will hurt your chances to qualify for a loan so they need ...

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The 20/10/1 Rule When Buying A New Home

You just finished watching the latest installment of House Hunters on HGTV and begin to think to yourself, “Why not me”? Shouldn’t I be able to get that home will the beautiful kitchen, sweet master bedroom, and super-duper outdoor living space?  Before you go ahead with that first home purchase, there are three “Ted” rules you need to consider for your family finances. The 20% rule. I am a big fan of putting down 20% for two reasons  One, If you are renting and you can save a larger amount each month to build up a cash reserve of a 20% down payment, it is a good sign that you are ready to afford the future mortgage payment.  Often, people skip right from renting to owning by putting down a small down payment and then get caught upside down with the extra costs of owning a home (higher electric, gas, landscaping, etc.) Two, in most cases, you will avoid paying ...

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