Archive for November, 2007
New Hampshire Home Mortgage Loans — Beware of These 3 Things
By J.A. Hale
The average price of a home in New Hampshire is approximately $130,000, and homes in New Hampshire have recently been appreciating at rates above the national average. Recently, New Hampshire has seen a spike in its population; in fact, it has had the highest growth in population of all New England states.
What to Watch Out for When Obtaining a New Hampshire Mortgage Loan
When shopping for a mortgage loan in New Hampshire, there are a few things you need to beware. This article addresses the three things you need to beware when looking for a New Hampshire home mortgage loan:
High Pre-Payment Penalties
Predatory lenders like to include things in their contracts that make it nearly impossible for you to refinance your loan. One of these things is a high pre-payment penalty. When you refinance your loan, you pay the remaining balance in one lump sum, and, if your contract includes pre-payment penalties, you’ll have to pay that amount in addition to your principal balance. This could keep you from refinancing if you later discover that you’ve entered into a contract with unreasonable loan terms.
High Interest Rates
Even if you have bad or no credit, you should still be able to get a decent interest rate. Because home loans are secured, the interest rates are better than those on unsecured loans. Shop around before signing any contract. Make sure to know what interest rates other companies are willing to give you before choosing one lender, even if that lender swears that you won’t find a better interest rate.
Arbitration
Occasionally, lenders will include an arbitration clause in the mortgage paperwork. If you sign a contract that includes this clause, you forfeit all of you rights to take legal action on your lender. Therefore, if you later discover that you’ve entered into a mortgage with a predatory lender, you will not be able to take legal action to get out of the loan.
Visit New Hampshire Lending Center for a list of New Hampshire Recommended Home Mortgage Lenders, whether you are looking for home purchase, refinance or a home equity loan.
Make Your Biggest Investment Work with Home Loan Refinance
It is often said that your home is the biggest investment you will ever make. Finding just the right one is the hard part. Making sure it gets paid for is life. Not taking advantage of it is silly. A home loan refinance program can make sure it lives up to all the advantages it is supposed to offer.
Taking advantage
If you have been paying off your home on a regular basis you are building an investment in your future. You have heard it from the time you were younger. Buy a home and invest in your future. After a while you are perhaps wondering when that future will come to pass. When can you take advantage of all your hard work and diligence? Most people think retirement is the time to take advantage. If they choose retirement time to take advantage this is fine, but what about now? A home loan refinance program may be just right for you. Take the savings from a home loan refinance and pay off outstanding debt or make the repairs to your home that will ultimately increase its value.
Is the timing right for you?
New money has been pumped into the system, by the government, to make home loan refinance more accessible. If you’re considering some new additions to your property, a long needed vacation or help paying for a child’s education, home loan refinance may be for you. Pay less and use the saved money more productively
Expand your holdings
Paying into your home means that that money is just sitting there working for the bank. Why should they be able to take advantage of the money when you can? A home loan refinance program could let you expand your investment portfolio with saved income. Home loan refinance can let you invest in other properties to diversify your holdings. A property investment in your primary residence was a smart move. If one piece of property was wise, two may be better. Make the first investment work even harder with a home loan refinance program by buying a second property.
A buyers market
In many regions, the real estate market has finally topped out. Prices are actually beginning to come down. Everybody knew it had to happen at some point. That’s just the way the economy works, in cycles. Being ready to pounce at the right time is critical to finding just the right second property for your needs. A home loan refinance program will let you make your move when you are ready. A home loan refinance program will enable you to act fast if you need to.
The market is in a state of flux. Taking your bargain shot could be here now. Don’t let that one opportunity slip past and consider your finance options ahead of time.
If you need a bit of help in your future finance plans, check out Home Loan Refinance now. You may find the answers you are looking for.
Refinancing Real Estate Investments
Why should you consider refinancing real estate investments instead of selling them? Maybe you’ve owned a rental property for years, you’ve paid down the mortgage, the value is up, and you want to cash in on that equity. You will do better to refinance. Here’s why.
There are two problems with selling. First, selling means paying a large capital gains tax. You can avoid this if you reinvest through a 1031 exchange, but then the point is that you want your money, right? Second, you’ll be giving up your inflation-indexed retirement plan. A good rental property generates more income as rents go up.
Refinancing Real Estate Investments Is Better
If you refinance, you can get much of your gain out of the property, without paying a penny in taxes. You see, borrowing money is not a taxable event. Take your loan proceeds and spend them however you want, and still keep your rentals. Doesn’t that sound better than losing a big chunk of your equity to taxes?
Now, let’s look at an example. We’ll suppose you have owned a small apartment building for several years. Let’s say you bought it for $340,000, with a down payment of $80,000. Interest rates at the time were at 9.5%, giving you a payment of $2,106 monthly on the balance of $260,00 (30 year amortization).
The property is now worth $560,000, and you owe $220,000. Your cash flow is around $2000/month. Now, how do you get at some of that equity? If you sell, you will give up the income, AND pay a big part of the profit in taxes. What happens if you refinance?
If a bank will loan you 70% of the value, that would be $392,000. Pay off the first mortgage, and you are left with $172,000. You can spend it any way you want, and no taxes are due.
It gets even better, especially when interest rates are low. If the new interest rate is 6.5%, your new payment will be $2295. In other words, you get $172,000 to spend any way you want, and you still have over $1,800 cash flow each month, from an inflation-indexed retirement plan.
Here is an even better scenario: Spend $50,000 of the loan for high-return upgrades to the property, such as carports and a laundry room, and raise the rents. You could have $122,000 left over to spend any way you want, AND have higher cash flow than before! Isn’t that sound better than selling your retirement plan? When you want that cash, consider refinancing real estate investments.
About the Author: Steve Gillman has invested in real estate for years. To learn more, get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com