Cash The Checks

Here are some things to look for before buying that house of your dreams that you would not normally think of looking for.
– If it’s near a high school or college campus visit the house during the day and night to see if students park in front of the house.
– Check in on a Friday / Saturday and see if your neighbors are party animals.
– Get a water hose and flood the front / side / back yards to see where water accumulates. Ideally there should not be puddles by the door or touching any walls.
– See how your neihbors tend to their yards. Your property value is dependant on theirs so it’s good to see if they care about how their property looks.

- Edwin, CashTheChecks.com

Since the start of the financial crisis buying a house is harder than it’s ever been.  The days of no-documentation or low documentation are hard to come by. However, it is a great time to invest into real estate if you have all the right pieces to this real estate puzzle.

Before you even begin to consider buying a house there are some reality checks one must come across.  First thing you want to make sure is that your credit score is in order. Since the banks seem to be quite stingy nowadays, if you want to be considered for a home loan you need a credit score of atleast 720 or higher.  Also be ready to provide bank statements and pay stubs along with tax returns, which must all back up the total income you make. Finally you need to look at what kind of down payment you will be able to make towards your purchase. It used to be the norm to qualify for a zero down type of loan, however,that’s no longer the case. Be prepared to pay up front 10- 20% of your total loan. There still remains some federal loan programs but these can be hard to qualify for. If you do have enough for your down payment be prepared to show where that money came from. And lastly, banks will want to see that you have enough money in your reserves just incase you happen to fall into a financial set back. It used to be a good rule of thumb to have atleast up to  3 months of money reserves, but now just to be on the safe banks want to see that  you have atleast 3-6 months of reserves. If you find yourself fufulling all of these requirements then your well on your way to owning a home.

- Edwin, CashTheChecks.com

Advantages of Refinancing Your Mortgage

When refinancing a mortgage, the borrower uses money from a new mortgage to pay off the debt of an existing one. If done correctly and at the right time, refinancing is an excellent way of reducing your total debt load and can provide you with significant monthly savings on your mortgage payments.

It is important to note that there are some costs associated with the refinancing process. Refinancing typically costs 3-6% of the borrower’s current outstanding mortgage principal. This is mostly attributed to the fact that taking out a new mortgage involves paying closing costs, and in some situations the borrower may be responsible for a prepayment penalty on their existing mortgage. In the long run, however, refinancing at the right time for the right reasons will save you more than the cost of getting a second mortgage.

Benefits of Refinancing

For most homeowners, the goal of refinancing is to obtain a mortgage with a lower interest rate and save money on future repayments. If you purchase your home at a time when interest rates are high, refinancing after rates drop can save you a large amount of money. However, as noted above, it is important for homeowners to consider the costs attributed to the process when deciding whether or not to refinance.

Refinancing can save you thousands of dollars in interest if your second mortgage has a shorter term than the first, even if you do not lock in a lower interest rate on the second mortgage. If, for example, you are six years into a 30 year mortgage, and find that you are able to afford higher mortgage payments, you might want to consider switching to a 20, 15 or 10 year mortgage. This will not only translate into significant savings in terms of the amount of interest you pay, but will also allow you to build up equity in your home more quickly.

Another situation where you might look to refinance is if you wanted to exchange some of the equity in your home for cash. However, doing so would mean that you would be borrowing more money than you currently owe, thus extending the terms of your mortgage. In general, this is only a good idea when the homeowner plans to use that received cash to add value to their home, either through remodeling or building onto the property. Refinancing is not a good idea when one plans to use the money to pay off credit card debt, or buy assets that depreciate quickly, such as a new car.

When is Refinancing a Good Idea?

In some situations, refinancing is unlikely to help you pay off your mortgage faster or reduce your monthly mortgage repayments. For example, refinancing is almost never a good idea when your credit rating is worse than it was when you acquired your original mortgage. In this case, your lower credit score will usually mean that you cannot get an interest rate that is favorable enough to lower the cost of the new mortgage.

In general, refinancing is a good idea when:

* You will be living in your home long enough for the costs of refinancing to be recouped by the savings you make on your new mortgage payments. In most cases this will take five to seven years.
* Your new loan is less than 80% of the current value of your home.
* Your new loan balance does not exceed the total amount owing on your existing mortgage.
* When mortgage rates are low
* Your credit rating is equal to or higher than it was when you originally took out your mortgage.

If you have an adjustable rate mortgage (ARM), refinancing may be a good option even in situations where some of the above points do not apply. For example, if you financed your home through an ARM when interest rates were low, and rates are now set to rise, a fixed rate mortgage may be a good idea. Another good reason to refinance out of an ARM is in a situation where you originally bought your home with the intention of moving within a few years, but have since decided to stay for the long term. Sticking with an adjustable rate mortgage is risky in the long run, and it is often more prudent to switch to a fixed rate mortgage if you plan to keep the property.

The benefits of refinancing also depend on the age of your mortgage. If you are twenty years into a 30 year mortgage, refinancing should be approached with caution. Taking out a new mortgage this late in the life of the original will only reduce the equity you have in your home if you borrow more than your current outstanding balance. If you have already paid off more than half your mortgage balance, refinancing will not usually save you money, even if you do lock in a lower interest rate. This is because conventional mortgage repayments are front loaded with interest, and at this stage your repayments are mostly going towards the principal.

- Edwin, CashTheChecks.com

Today I made an official offer on my first home. The asking price is $875,000. The offer was $820,000. If they’re eager sellers they may just bite and take the offer. I thought the offer was just going to be a quick 1 page letter, but in reality it’s about a 20 page contract with all this legal mumbo jumbo.

I’m going to wait a bit to lock in my rate, because September 18th the rate may go down by 0.25%. I’m getting a 30 year fixed rate jumbo loan, so interest rates are hovering around 7.0% right now. A rate drop next week will bring that number down to something more manageable.

If the offer is accepted, that’s when the ball starts rolling, inspections are done, loan is obtained, closing costs are paid, and the moving in begins. How exciting! (not being sarcastic).

Purchasing a home is a major decision, and it can seem impossible if you have bad credit. Do you need help with IRS back taxes. You can also get information on debt management if you’re in serious need of debt consolidation services.

- Edwin, CashTheChecks.com

0.50%

Today the fed cut rates as expected, but it was 0.50% not 0.25%. It was predicted rates would be cut a quarter point in September, another quarter point in October. The base rates went down from 5.25% to 4.75%.

I’m in the process of buying my first home (Re: Making an Offer) so this news is great, it means I can lock in my rate right now. I’m getting a 30 year fixed rate jumbo mortgage loan, so the rates I was looking at before were hovering around 7.00%. Now it looks like I’m getting a 6.50% or perhaps even better.

The interest rates are down, but the national debt keeps rising. If you need help with debt consolidation or you have increasing tax debt, there are solutions.

- Edwin, CashTheChecks.com

A new job report came out recently: The number of Americans with jobs has dropped for the first time in 4 years. Then we’re also seeing the stock market decreasing and becoming more volatile lately. Let’s not forget that there are record number of foreclosures and homes are sitting with “For Sale” signs much longer now.

All this could be enough for the feds to lower their interest rates when they meet September 18th. Experts are predicting a 0.25% cut to a 0.50% cut. I found this link that lists the history of the rate cuts, and it’s interesting to note that there hasn’t been a change since June 2006. It’s hard to believe that according to that chart, the rate was as low as 1.00% about 3 years ago. I wish I would have bought a house then.

So if you’re on the verge of buying a home, it’s best to wait just a little bit longer, and see if you can get a better deal in two weeks.

If you’ve been looking to buy a home but are wary about interest rates, perhaps you should look into the cost of a modular home. Look online to find modular homes on sale, or better yet, start construction on a new home. You could save money and time by looking into modular homes!

- Edwin, CashTheChecks.com

The real estate market boom that we’ve been experiencing up until about a year ago was due in part to ARM loans. ARM laons are Adjustable-Rate-Mortgage loans. This means that your introductory interest rate starts off very low, and then in 3 or 5 years, it will adjust to a much higher rate. Sounds dangerous doesn’t it? It can either adjust down or up, but most likely it will go up and your payments might double. So you’ll be forced to sell your house, if you can’t sell it or afford another house, you’re screwed, time for a foreclosure!

So who is to blame for people entering into these silly loans? The lenders or the home owners? The answer is a little of both, but mostly the home owners. Credit card companies also offer introductory APR’s of 0% that go up to 20% later, but that’s not their fault, if you’re dumb enough to fall for it, knowing what the terms are, then it’s your fault and nobody should help you.

I heard on the news today that some politicians may entertain the idea of raising taxes to bail out these people who find themselves in these tough predicaments. It sounds completely unfair that if you work hard, do everything right, save your money for a down payment & get a fixed rate loan, that you have to pay for the mistakes of others. I don’t like this “we’re all in this together” attitude. If that’s the case, there’s little motivation to succeed, because you’re always going to have the government helping you out regardless of what mistakes you make.

- Edwin, CashTheChecks.com