URBALO

Isn’t this a question that we all asked ourselves? Wouldn’t be great to own two properties, live in one and rent the other one?

But are you financially ready to take the plunge? Lenders are tough on second-home loans. Usually, second-home loans require a 20% down payment, and not many lenders are willing to take the risk.

The question is: how do you determine if you could afford a second home? Check the worksheet on smartmoney.com and see for yourself. Remember: you’re the one that needs to make the decision and don’t rely on your friend, a realtor or a mortgage person to tell you what you can or can’t.

This worksheet will help you evaluate your overall financial situation, including the income you could receive from renting the property part-time.

Closing costs seem to be designed to confuse the buyer. Most folks don’t understand all the mysterious fees they’re paying their lender when they close on their home — and sometimes end up overpaying, says Keith Gumbinger, vice president of HSH Associates, a mortgage information provider. (For a list of the average amounts paid for various closing costs, click here.)

The truly insidious lenders out there realize that they’re catching their customers during one of the most vulnerable points of their lives — when they’re about to buy their first home, a darling weekend lake house or the palace of their dreams. After coming along so far in the process, many buyers are itching to move in, and consequently overlook small, unexplained charges. Others might notice some fishy line items but decide not to fight them. They’re reluctant to walk away from the deal over an extra, say, $500 of unexplained costs. Read Full Article ->

Here is an article with a very interesting approach on the whole issue renting vs buying. Even though, I disagree with some points made in that article, I still think it’s pretty interesting and it offers some good information. This article comes from johnchow.com

“The House You Live In Is Not An Asset

Many people view their house as an asset – and the biggest asset at that. The truth of the matter is your primary home is not an asset, it’s a liability. You see, assets make you money. However, the only way you can make money off your house is if you sell it for more than you bought it for. Until then, you have to pay maintenance, hydro, cable, property tax, mortgage, repairs, etc. Housing costs are among the highest recurring cost a family can take on. Would you call something that takes thousands of dollars each month to maintain an asset? Read Full Article ->

Digg the story

Most people look forward to a negotiation like they look forward to a root canal. Of course, there’s also that rare breed that relishes trading in their car just so they can spend a few hours beating up on the dealer. No matter which category you fall into, on thing is for sure: negotiations are a part of almost every real estate transaction. And how they’re handled goes a long way toward determining the success of a deal.

Here are five keys I followed in completing many successful negotiations:

1. Before a negotiation begins, try to find out the motivation of each party. It’s not always price. A flexible closing date could be just as important. This will help you formulate a strong offer going in.

2. Keep the negotiations away from an “us” versus “them” mentality. The goal is truly to create a win-win.
Read Full Article ->

1. Aim for pre-approval
Approach at least four to five lenders (or have your mortgage broker do so) to see what kind of loan you can get pre-approved for, Robbins suggested. Generally, you want to go with the lender that offers the best rate and the lowest loan costs.

2. Find a good buyer’s agent

What buyer’s agents do: When you go to an open house and meet a real estate agent showing the property, that agent represents the seller’s interests. So you might be better off using a buyer’s agent whose job is to represent your interests. In addition to showing you homes that meet your criteria, a buyer’s agent can help you negotiate a contract and may help you get a better deal on title insurance.
Read Full Article ->

How do you buy a new home without cracking your nest egg too deeply? Our expert has some advice.
NEW YORK (Money) — Question: My wife and I are currently renting, but we’d like to buy a house. Problem is, we happen to live in somewhat expensive area where single-family homes cost at least $300,000. Our combined income is low and we barely have enough savings for even a small down payment.

We’re thrifty, though, and we can now save about $1,000 per month. My question is whether we’re better off saving all that money for a down payment for a house in a couple of years or focus on putting money in our retirement accounts? We think we can carry a decent size monthly mortgage payment, but I’m afraid we won’t qualify for a loan because our income is too low. What should we do? - H.S., North Bend, Washington.
Read Full Article ->

I wrote about this in the past, but here is an updated version containing some new things that I have experienced the past few months.
There are two ways to go about making home improvements. Either you splurge for something purely for the sybaritic pleasure of having it — the Italian marble bathroom you’ve dreamed about; that skylight that your spouse has been hinting at for the last six years — or you take a pragmatic approach, buying an energy-efficient furnace or repairing a leaky roof because you want to increase your home’s market value.
Exactly how much you’ll recoup in costs depends on several factors, including the direction of the broader housing market, the value of the homes in your neighborhood, when you plan to sell the home and the nature of the project itself.
Kitchens
Even a few basic improvements to your kitchen can pay handsome dividends, says real-estate agent Michael Murphy in his book “How to Sell Your Home in Good or Bad Times.” Murphy writes: “For most buyers, [the kitchen] is the heart of the house. Paint, wallpaper, and even refloor the room if necessary. Consider sanding, staining or painting dingy-looking cabinets. Replace old cabinet hardware — a low-cost improvement that makes a big difference in appearance.” Just be sure to go with a classic design and, if possible, use high quality materials, says Remodeling magazine’s Cory. After all, good taste endures.

The average amount spent on a major kitchen-remodeling job in the U.S. is $54,241 for a midrange update; an upscale designer makeover averaged $107,973, according to Remodeling magazine. The midrange kitchen overhaul nationally recouped 80% of its cost and 76% of the costs were recovered in an upscale makeover.
Read Full Article ->

[source:SmartMoney.com]

A GOOD CHUNK OF the U.S. population refuses to give up renting. We’re not sure how many renters are stubborn hold-outs (the U.S. census doesn’t measure in terms of obstinacy, although we do know that the majority of Americans — about 69% — own their own home). For many, the American Dream is simply out of reach for financial reasons.

But, for others, it’s not the money, it’s the….well, we’ve come up with five reasons why people don’t want to buy real estate. Perhaps you’ve used these excuses yourself — or know a colleague, a family member or a friend who has. We’ve enlisted the aid of experts — Stacy Francis and Nancy Flint-Budde, certified financial planners in New York City and Salem, N.Y., respectively, and Mark Schussel, a spokesman for Chubb Group Of Insurance Companies in Warren, N.J. — to counter these excuses and knock some sense into the real-estate challenged.

EXCUSE #1: “Everyone is way too insane about real estate.”

Count this as the “protest” renter — the person who perpetually rents, who thinks they’re too cool for school and doesn’t want to be one of those people who talks about renovation projects at a cocktail party. (The true “protest” renter also protests cocktail parties.) These people might also fear growing up, becoming their parents, owning guest towels, etc. Counter: Well, owning your own home IS a responsibility — and if you’re not ready for it, then don’t do it. Of course, you’ll miss out on nice tax breaks for mortgage interest and property taxes, which make owning a compelling proposition for many. Not to mention, you’re not exactly building equity when you split the rent with the roomies (but, hey, it does help with the cable bill).

“I look at renting as writing a check and throwing it out in the garbage,” says Francis, who often advises clients on buying apartments in Manhattan. For many people, buying a home is their first crack at building their net worth over the long term, she says. The traditional way to ease into home ownership is to buy something like a condominium or townhouse, so your weekends aren’t spent at the home-improvement store picking up weedwhackers. But be careful: You might feel like a real adult once you own. “You are no longer at the whims of your landlord to raise your rent, or sell your building,” Francis says. “It really gives you stability.”

Read Full Article ->

There are 5 things any client should expect from their realtor in terms of showings and open houses.

1. The realtor should try their best to schedule a showing appointment 24 hr in advance, this will give you time to prep your house and make it look best.
2. The realtor should help the client with suggestions regarding the home showing preparation.
3. The realtor should call their client right after the showings and provide them with a feedback.
4. The realtor should advertise the open house weekly in one of the major local newspapers, a lot of people still rely on the newspaper to read about open houses and new developments.
5. The realtor should keep a sign-in sheet and must call the client after the open house and advise them of potential buyers or just to give them a “411″ on the open house traffic.

I came across an interesting article on http://www.getrichslowly.org/blog/. I have to admit that I’ve never looked into the online savings account since I always wanted to be able to just walk-into my local bank and deal with a customer service agent face to face, but after reading several articles on the web, I have realized how much money I was actually losing by keeping my savings in one of the traditional banks’ savings accounts.

Here is quick summary of the best rates available on the market right now:

All of these accounts are FDIC insured.

• Countrywide Bank offers a variable rate, from 4.00% to 5.40% APY, can link to other bank accounts. $1,000 minimum to open.
• AmTrust Direct offers 5.36% APY, “no monthly service fee or minimum balance fees”, can link to other bank accounts. $1000 minimum. This is a money market account.
• WT Direct offers 5.26% APY, no fees, can link to other bank accounts. No minimum to open, but your interest rate drops if you don’t have a $10,000 balance after 60 days.
• E-Loan offers 5.25% APY, no fees, “industry’s strictest privacy policy”. $5,000 minimum.
• Presidential Online Bank offers 5.25% APY, no fees, ATM access, web interface. $5,000 minimum to open.
• Emigrant Direct offers 5.05% APY, no fees, can link to other bank accounts, web interface. No minimum.
• E*Trade offers 5.05% APY, no fees, an automatic savings plan, can link to other bank accounts. $1 minimum to open.
• HSBC Direct offers 5.05% APY (with a temporary 6.00% APY promotion), no fees, can link to other bank accounts, web interface. $1 minimum to open. The HSBC web site is a busy mess.
• Capitol One offers 5.00% APY, no fees, free checks and ATM card, an automatic savings plan, can link to other bank accounts. $1 minimum to open. This is a money market account.
• Citibank Direct offers 4.65% APY, no fees, $25 sign-up bonus. No minimum.
• ING Direct offers 4.50% APY, no fees, an automatic savings plan, web interface. No minimum.

For a detailed discussion on this topic, please read the comments on the getrichslowly blog, it contains some great reviews from their readers.