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Quit Claim Deed

January 21st, 2010

A Quit Claim Deed or quitclaim deed is a document in which one person gives up all interest and ownership of real estate to another person. Quit Claims are sometime times used between families when the property is given as a gift, the property is transferred into a family business, to clear up confusion on titles and other situations.

But most of the time a Quit Claim Deed comes into play when there is a divorce and one person gives up their stake in a home to the other person. Typically if children are involved the primary custodian is allowed to keep the home but this isn’t always the case, just a common situation.

When you file a Quit Claim Deed you’re stating that you no longer wish to have any responsibilities or benefits that are tied to the property. This means that once the transaction is completed you will no longer have any say in what happens to the property and you cannot be expected to be responsible for anything that occurs to the home or on the property.

Read the fine print on a Quit Claim Deed before signing it, although they’re all basically the same, some people go into the process without really understanding that they’re giving up their current and future rights to the real estate.? photo credit:?woodleywonderworks

How to Handle a Bounced Check

January 14th, 2010

Unfortunately it’s a part of being a landlord, but bounced checks happen, and for some they happen quite frequently. There are different rules in each area with how to deal with bounced check, so check your local laws and what tenant resource groups recommend, but the following bounced check tips for landlords may help you get through the process and get the money that is owed you.

Written Notice

Give the tenant written notice that their check has bounced. This can be handled in a number of ways but getting a signature through the postal service is usually the best way as it proves that the mail was received. Include a photocopy of the bounced check with your letter, also let the tenant know how much you have been charged by your bank and that they will be charged those fees as well. Also spell out what steps will be taken if they do not pay in an acceptable or timely manner.

Give Them Time

You can’t expect immediate payment from the tenant, there is typically a couple days leeway between when they see your notice and when they’re expected to make good on the check. Receiving another check does not count as payment until you are certain that check is good.

Still No Payment

If the tenant still hasn’t paid within the grace period then it’s time to take further actions which include beginning eviction proceedings.

photo credit:?Hello Turkey Toe

How to Improve your Credit Score

January 12th, 2010

Getting a home loan is largely based upon your credit score and if your score is below a 620 you may actually find it hard to locate a mortgage lender who is willing to give you a home loan.

Improving your credit score isn’t impossible, in fact in some cases it’s quite simple and steps can be taken immediately. You’ll notice with a better credit score you’re more likely to get approved for a home loan or you’ll get a better interest rate.

The first way you can improve your credit score is by paying down your credit cards and installment loans. If you have high balances you don’t have to worry about paying them off entirely but you should aim for getting them below 30% of the credit limit.

The next step you should take is to limit your credit card usage or quit using them altogether. Adopt a mentality that if you can’t pay cash for it then you can’t afford it.

Check your credit limits and make sure that this is what’s reported on your credit report. If your limit is $10,000 but your credit report shows it as $5,000 then it will seem like you’re borrowing a larger percentage than you actually are – just fixing this one little thing can immediately make a big change.

Use an old credit card. The longer your credit history is, the older your cards are the more valuable and credit worthy you appear. Don’t go out and make a huge purchase but a few small ones you can pay off immediately. This will actually help your rating rather quickly.

The thing to remember when improving your credit score is the longer you’ve had credit the better, the more a company is willing to lend you the better, the lower your balances the better and most importantly you want to prove that you are capable of paying off your debts in a timely manner.

photo credit:?SqueakyMarmot

Types of Home Loan Lenders

January 8th, 2010

Years ago the only way you got a home loan was through your bank, and very few people actually even shopped banks for their loans. Today people are not only shopping different banks, but there are a number of home loan lenders out there with different features that may make them an even better choice than your local bank.

Mortgage Bank

This is the old fashioned way of getting a home loan, your local bank will process your loan application and determine if you are worth the risk. They will lend you the money but will then often sell that loan on the secondary market.

Mortgage Broker?

A mortgage broker is a go between who works with a variety of lenders and can help you find the loan that best suits your situation, then you’ll often work directly with that lender.

Internet Lenders?

The internet is full of mortgage lenders, some more scrupulous than others so it’s important to do your research. Some internet lenders are simply traditional outlets with an internet portal, some are strictly internet based companies.

Home Builders?

Many large home builders actually have loan offices within their companies or they have very close affiliations with mortgage brokers. Typically they offer some sort of deal for people who want to purchase their homes.

Real Estate Offices

Similar to the home builders above, some of the larger real estate companies have in-house mortgage departments that will make buying through them more enticing.

You can research all of these options on your own and come up with the best solution for you without using a mortgage broker and paying that added middleman expense, but it will take some time and effort on your part.

Your Credit Score and Getting a Mortgage

January 6th, 2010

Your credit score is more important than ever if you’re trying to get a mortgage. Rather than having a standard percentage charged on all home loans, today’s loans are dependent on a number of things but the primary concern is your credit score.

Your credit score is based upon your credit history as reported on your credit report. A complex mathematical equation is used to determine your score but that number is key for getting a home loan. Credit scores are figured by a method created by Fair Isaac Corporation and are often referred to as FICO scores. Scores range from 300 to 900 and the typical home buyer falls somewhere in the 600 to 700 range. The higher your credit card, the better.

If you’re concerned about your credit score and getting a home loan your first step is to determine what your credit score is by ordering a free credit report. Each of the three big credit reporting agencies may have a different score for you but they’ll all be fairly similar.

Once you determine your score you can see how likely you are to get a loan and if you qualify for the better interest rates. Any rating below 650 should be boosted if you can to push the envelope and get you a better interest rate.

Moving Tips

December 31st, 2009

Moving is an incredibly stressful evening in your life but the stress can be minimized by using the following moving tips.

Color Code

Give each room in the house (or each person) a color and have them label their boxes in that color. Then create a code so movers can easily put boxes in the appropriate room.

Number System

Prioritize your boxes and number the ones that contain everyday items with a one. This way you won’t be searching through everything to find the things you need.

Valuables at Hand

Don’t trust your most treasured valuables with strangers. Keep a few boxes of important papers, valuable heirlooms and other items you’d be devastated if you lost with you at all times.

Be Willing to Say Good bye

As you’re packing be honest with yourself, if you don’t use it then get rid of it. Why move stuff you don’t want or need? Create a pile of items you’ll take to a local charity or sell at a garage sale.

Address Labels

Order address labels with your new address and slap them on everything. Remember to inform anyone who bills you of the address change. Stick the address labels on your moving boxes too just so nothing gets lost in the shuffle.

And most importantly, allow yourself some time to unpack and put things away. Don’t create additional stress by having irrational timelines.

photo credit:?roland

Private Mortgage Insurance

December 30th, 2009

If you’re considering purchasing a home or if you have purchased a home you have probably heard the term PMI thrown around. PMI stands for Private Mortgage Insurance but most people simply call it PMI. Not everyone has to pay a PMI, it is typically added to home loans if the borrower doesn’t have at least a 20% down payment on the purchase price.

PMI insurance can vary but the general range is somewhere between half and one percent and is designed to protect the lender in case the borrower defaults. It’s doubtful that the PMI actually does anything to protect the borrower but PMI is an accepted industry practice and isn’t going anywhere soon, so if you don’t have 20% to put down on your home then you’ll have to pay a PMI.

One thing to keep in mind during the course of your loan is the amount of principal you’ve paid. Once you’ve paid off 20% of your home’s assessed value you can approach your lender and ask them to remove the PMI. One would think that this would automatically be figured by your mortgage broker but it’s not so it’s something every mortgage holder with PMI should keep track of as it can save you thousands over the life of your loan.

Winterize your Apartments

December 29th, 2009

If you’re a property owner you may want to winterize your property both as a benefit to you and your tenants.

Caulk Windows

Check the windows for any cracks and air leaks, caulk the cracks and you can save on heating bills, whether you pay them or your tenant does. You can also take solace the fact that you’ll be helping the environment a little bit.

Weather Stripping

Check the weather stripping throughout the house to make sure it’s still in good condition, if not replace it. If you don’t have any, you may want to add some.

Air Filters

Have your air filters changed and cleaned. These are typically supposed to be changed more than once a year, so make sure you or your maintenance crew is on top of it.

Check Outlets

If there is a draft coming from any of the outlets use expanding insulating form inside them or go the extra simple route with childproof covers.

By taking the lead and winterizing your apartment units you may encourage your tenants to do the same which increases efficiency, eases the burden on the environment and reduces bills for one or both parties. If there are winterizing steps that you cannot take as a landlord but would encourage your tenants to do you could send out regular newsletters letting them know what steps they can take. You can’t force your tenants to be as vigilant as you are but you can encourage.

photo credit:?Michel Filion

Subprime Mortgages

December 28th, 2009

There’s been a lot of talk and concern about subprime mortgages and they are partially to blame for the housing crisis in the United States today. But what is a subprime mortgage? Subprime mortgages are home loans that are giving to people with less than optimal credit scores, typically their score is below 620. Credit scores run from 300 to 850 with the majority of people falling into the 600 or 700 range. Those who fall below 620 are considered a higher risk and if a lender decides to give them a loan they’re going to fall into the subprime loan category.

Subprime loans have higher interest rates than typical loans, but that rate can vary dramatically so if you are a subprime candidate then you must do your homework and shop around for the best loan rates and terms available to you.

Some subprime loans come with prepayment penalties and balloon payments, some even have both. It’s the prepayment penalties and balloon payments that are blamed for contributing if not starting the housing crisis. These penalties are almost impossible to deal with for many people, especially those with bad credit, and many homes ended up in foreclosure.

If you’ve got a poor credit score, rather than diving into a subprime loan which could cause you more trouble in the future, work instead to improve your credit score so you’ll be able to qualify for a traditional mortgage.

Things to Ask a Mortgage Lender

December 22nd, 2009

Too many people who are looking to buy a home spend all their time researching homes and almost no time at all researching mortgage lenders. This can be a huge mistake that could cost you thousands if not tens of thousands throughout the course of your loan. As your mortgage lender the following questions to make sure you’re getting the best loan for you.

What is the interest rate? This is a question that almost everyone knows to ask a mortgage lender, it’s a key determining factor.
What is the point situation? How many points will you have to pay, how much are they and what kind are they? This information will also affect the size of your loan.
What are the closing costs? The closing costs can add thousands onto your loan from the get go.
Are there prepayment penalties? Prepayment penalties hit in a number of situations, if you refinance, pay off a loan early, or sell a home and you want to avoid them if possible.
What is the down payment? Some loans require a minimum down payment, and the percentage required can vary drastically. For people without much savings this is critical.

By asking these questions you’ll have a better feel for your loan and be able to get the best loan terms possible.

photo credit:?woodleywonderworks