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Banks & Financing

Helpful information about banks and financing for home buyers and sellers in Rhode Island.

Found 10 blog entries about Banks & Financing.

Investing in Real Estate? Lets ask Warren Buffett, the infamous investor worth billions who is commonly known as “The Oracle of Omaha”.  His insight in investing I’ve always found to be a very simple, easy and straight forward. This article delves into two real estate investments he’s made. Here’s a few points I walked away with;

-Ignore the outside noise and chatter

When we were in the depths of the Great Recession Mr. Buffett was buying up companies left and right, while the rest of the market went running for the hills. His Berkshire Hathaway holding company bought Prudential Real Estate as his method of jumping into the real estate market. But years ago, he made a few real estate plays himself, ignoring the noise around him, he focused on the

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The Government Shutdown may affect Real Estate over the coming weeks. Perhaps not market values, but existing transactions, and buyers looking to make offers.  Being a Realtor, I’m certainly not furloughed and neither are most other private sector jobs.  But in a community like Newport RI, it may end up affecting us more directly than we’d like.

 

Nearly 900,000 federal employees were told not to come into work on Tuesday.  That’s nearly a third of all persons being paid directly by the US.  These people include members of the DoD, National Parks, Memorial Administration, FHA and IRS.  Since 1975 there have been 17 government shutdowns, averaging nearly a week. Ranging from 1 to 21 days each.

 

How it Affects Newport County:

 

Here in Newport

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Capitol Hill

The ball at Time Square wasn't the only thing that dropped last night.  The US economy took a cliff dive thanks to our elected officials on Capital Hill.  The so-called “fiscal cliff” has been looming for months.  The Senate threw out a life line passing a Bill on New Year’s Day but the House must ratify the Bill before it is presented to The President. 

So we’re not there yet, but here’s an outline from the current Bill explaining how it affects your real estate and what it means for 2013:

1. CAPITAL GAINS

-Capital Gains and dividends rose from 15% to 20% depending on your tax bracket.  Please keep in mind, the exclusion of $250,000 for singles and $500,000 for married couples is still in place, so as long as you’ve owned your home for at least

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What is a 203K Loan?

An FHA 203k Loan is a rehab loan backed by the Federal Housing Authority. It allows home buyers to borrow to make repairs to a property after closing.

Why would I use a 203K Loan?

Typically for most conventional loan approvals the property has to be habitable and pass inspections.  Many times the seller can not fix problems that may arise such as furnace issues, old roof, peeling lead paint, non-functioning plumbing or electrical systems.  When these deficient conditions exist, a bank may deny a conventional loan application.  If you apply for a 203k Rehab Loan, however,  you may be able to borrow enough money to purchase the home AND make pre-approved repairs after closing.

How much can I borrow with a 203K?

A 203k

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As a Rhode Island real estate agent who has recently navigated both ends of FHA backed transactions, I can personally attest to the fact that FHA loans are making a strong comeback as a useful alternative for first-time home buyers and home buyers with less than perfect credit.  My experience as of late has enlightened me to the fact that both industry peeps and consumers alike are often still in the dark about the FHA process and what it means to a sale.  So, I'm here to offer an inside scoop.

Tips for Potentail FHA Borrowers:

1.) There are three FHA loan programs:

1. FHA 203(b) fixed-rate mortgage (15- or 30-year loans)
2. FHA 251 adjustable-rate mortgage
3. FHA 2-1 buy-down loans

2.) To qualify for an FHA mortgage, borrowers must:

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    buy_vs_rent_chart_400To Buy or To Rent? A tool to help you decide.

    Many factors enter into the decision to rent or buy a RI home including the anticipated rate of appreciation, anticipated rent increases, your tax bracket and how long you expect to stay. If you're wrestling with this common real estate decision, take a look at this Rent vs Buy calculator. It's one of the best ones out there because it rolls every possible permutation into a tidy little graph and a one sentence conclusion.

    So plug in your numbers, and see what's best for you. If it turns out that buying is the way to go... well, you know where to find me!

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    Photo of Punxsutawney PhilPunxsutawney Phil - Correct 40% of the Time

    "Is this the bottom?" the buyer asked.

    "Yes." I replied. "Yes, it is, and there will be 6 more weeks of winter too." Like Punxsutawney Phil, I make predictions at this time of year. Unlike Phil, I actually consider the indicators.  I'm pretty confident I can best his 40% success rate. (source: National Climatic Data Center)

    Here are a few reasons I believe we may actually be at or near the bottom - offered with WAY more authority than Phil's suggestion of a prolonged winter.

    1. In 2011 outstanding mortgage balances went down $30B every month. Steady, sustained improvement means momentum. Momentum is what pulls you out of troughs like this.

    2. Job gains are accelerating. January brought 243,000 new

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    It’s easy to feel negative about Rhode Island's real estate market when all you hear is bad news.  "Houses are not selling," "There are no buyers," "Banks won't lend," and "The economy is too weak for the housing market to improve."  Rhode Islanders need to look past the headlines and see the big picture. The greatest buying opportunity in our lifetimes, especially for first time home buyers and investors, is right now.  Here are a few reasons it’s an absolutely awesome time to buy:

    Low Rates - Mortgage rates are at historic lows.  Two decades ago a 10% mortgage was a great deal.  In 2012, rates range from 3.75% - 4.5%.  Every .5% drop n a 30 year, $300,000 mortgage, puts $90 a month, $1,080 a year, or $32,400 over the life of the loan RIGHT IN YOUR

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    Before we get into the nitty gritty, let me start off by saying a few things about myself. My real estate career began after my employer, a boutique financial firm where I was CFO, closed abruptly.  When the shock wore off, and I finished mourning, I picked myself up, dusted myself off and started over in real estate.  It wasn't easy, but now I find tremendous satisfaction in helping homeowners understand the options and the obstacles to getting back on their feet.

    The point I'd like to make here is this: things happen, you can adjust, and you can start over. Yes, the economy is bad. We are at close to 10% unemployment. Your home value probably has dropped, and, if you owe more than your house is worth, a short sale may provide the relief you need to get

    22,135 Views, 1 Comment

    As many people know, banking has become much tougher, and financing options have drastically shrunk since the recent banking implosion.  It no longer is just signing a purchase and sales and waiting for the closing.  Buyers in this market need expert advice on how to navigate banks and if paired correctly with the right mortgage product can save substantial money or actually make it to the closing.

    In a recent deal, my buyer finally found a house that worked well for their family but needed updates to make it feel like home.  After reviewing the needed work and the intended down payment, we realized that the cash required for improvements wouldn't allow them to put 20% down forcing them to pay for Private Mortgage Insurance (PMI) - an added expense we

    16,858 Views, 2 Comments