In a world of instant gratification, we all want what we want, when we want it. For some, the real estate 
market requires immense planning and for others it is a blind jump. Fortune favors the bold, but not the stupid. You have to be educated on what your options are. For some, a land contract or lease to own may seem like an ideal situation, but there are dangers in this agreement.
So what is a land contract? A land contract is an agreement between a home buyer and a private home seller. The seller remains in possession of the title or deed of the property, allowing the buyer to take residence with in the said property and make payments on the property in which the seller would make to the mortgage company.
This is an option most utilized by those who have limited options ofr immediate home ownership due to either financing problems, poor credit scores, or a lack of funds for down payment. Typically a last resort option, a land contract can be a dangerous liaison for the buyer for two reasons.
First, land contracts are sometimes entered into without proper legal documentation. Remember that any verbal agreement is going to be very difficult to back up without proper evidence. Anything you decide to invest in should be covered in a written contract, which should be thoroughly reviewed by both parties legal representation.
Second, the seller retains the legal title of the property along with the responsibility of paying mortgage payments and taxes on the property. Without a legal contract, there have been numerous reported cases of sellers not paying either the mortgage and/or property taxes. In this instance the buyer is unaware that the money they have been providing is not going into the property as they had mutually agreed upon, only to find out when the home enters repossession or a lien is placed upon it. You must always check on these two areas because they affect your investment.
Are all land contracts dangerous? No, but they do complicate the buying process and you still have to invest in the home inspection and pay mortgage payments. If you are capable of financing a home at a reasonable rate, the risk and headache is not worth it. Buying a new home can be easy or complicated. It just depends on how much leg work you do in the begining.
Tags: finance, home buying, land contract
A magicians true power does not lie in the ability to bend the laws of physics, rather it is hisor her power to get their audience to watch their right hand as the left one commits an act of deception with a sleight of hand maneuver. This power of illusion is the magicians true power. This power is also a common trait of con artist and unethical business practitioners. In the real estate world there have been quite a few magicians working the lending angle. This set up for the bait and switch mortgages usually involves disappearing funds from the potential Home Owner. Find your dream home, without paying more than you should.
So what is a “Bait and Switch” mortgage? It is a magic trick. There will be an advertised mortgage rate that very few people would qualify for, but because the company can offer it to some segment of the population it is a legal advertisement. This highly coveted, but unattainable percentage rate, is the bait to get you into the office.
Once you have applied for the rate advertised, you most likely will find yourself disappointed in the fact that you don’t qualify. The lender will engage you about your situation with a very empathetic approach. Then there will be an offer to finance at a different rate, higher than what was advertised.
Another area to watch out for are hidden fees. Remember to never sign anything until you have had all contracts reviewed by your attorney regardless of how “standard” the mortgage broker claims the contract to be. Also ensure that you receive an itemized list of all fees you are going to be required to pay.
A borrower should also track market trends while applying for a loan. There is a time difference between when a borrower submits their loan application and when the loan rates are actually locked in. The rates are subject to the changes in the market. the market rises, your rate rises. the market falls, your rate falls. In the event that the market falls, some brokers fail to change the rate so make sure there have not been any significant changes in the market between application and signing the papers.
One way you can safeguard yourself from unethical lenders is to check and see if they have been reported to the Better Business Bureau. Not all unethical companies are reported, but this is an excellent start for checking references. Another great way to determine what is the legitimacy of an organization is to ask to see the loan commitment letter from the lender who is locking in the rate on the loan. This is a legitimate request and buyers should not work with anyone unwilling to show the loan commitment letter.
Tags: buying a home, financing a house, fraud, mortgage, scam
You’ve worked so hard for your home. Made untold sacrifices to realize the American dream of home
ownership and for unforeseen circumstances the dream you built is threatened from dire economic conditions that threaten foreclosure. A feeling of helplessness envelopes your spirit and there seams to be no way out. Then miraculously you find help that is just too good to be true. As the old adage goes, “If its too good to be true, it probably is.”
There are numerous legitimate resources, local and national to help you avoid foreclosure, but avoid scams that ask you to put your financial future at risk.
Here are some popular scams cheating people out of their homes.
- Equity Stripping: In this instance a distressed homeowner is presented with a situation of being behind on mortgage payments. they are approached by a financier that offers a bailout. The homeowner is then advised to stop payment on their mortgage while the situation is being negotiated. Once the homeowner is facing immediate foreclosure the financier claims that the deal has fallen through for the bailout. At this point the homeowner is in a tough situation if they have not been placing their mortgage payments in escrow. Without the money to pay they are in even more desperate of a situation and the financier then says the homeowner must enter into a special program where the home is signed over to the financier or associate and the original owners will pay their mortgage back as tenants. The home is signed over but the financier never truly pays the mortgage and the homeowners loose everything.
- Quit Claim Deed: In this scenario you fall behind on your mortgage and enter another party offering assistance on to your home deed. Without consulting an independent lawyer, you could be signing over your home ownership rights while still holding on to financial responsibility for the home.
- Mortgage Liability. This is any situation that only deals with the actual deed or property. If you have reached an agreement for help it can be costly to neglect the fact that your deed and your mortgage are not one in the same. beware of any deal that treats the two as one entity without specifying how they will be dealt with separately.
Tags: foreclosure scams, home owner help, home selling, new home buying
Planning for your future takes a lot of forethought into what path is best for you. Your financial future
takes that same thorough review, but add math into the equation. For many, home values have been a major focus due to the enormous drop in home prices across the United States over the past couple of years. In a market that is in constant flux, many find the prospect of calculating their home value to be a depressing thought. While not every sector in the housing market has found home prices decreased, it does seam to be more the norm.
However the individual markets are doing across the US, the importance of getting an accurate estimated home value depends on your situation. If there is reason to believe you will need to liquidate your assets for any reason, then it would be beneficial to get an accurate home value. Another instance would be if you had decided to refinance your home. This is going to be a requirement of your financial institution in order to determine if the value of your home exceeds the amount you still own on the property.
A great way to get an idea for what your home is worth is to speak to a licensed real estate agent. A sellers agent is the best to have for selling your home and making sure you get the best deal for your home. A buyers agent can also give you excellent advice on what consumers in the market are looking for to help get an idea for what your home is worth.
You can also play detective by investigating what comparable neighborhood properties are being offered for and what price they are actually selling for. This information will give you an idea on what price range your home is in. Remember, the home must be in similar condition, offer the same level of amenities, luxuries, upgrades, and etc.
Tags: assessment, home buying, home selling, home value
Sick of the phrase “Tough Economic Times” looming doom over all the news surrounding real estate? Its hard to remain positive in challenging situations if the only information you receive is negative.
Yes, foreclosures are reaching staggering amounts all across the country. And, no its not wise to ignore the fact that banks are likely to increase their foreclosure rates and home repossessions now that President Obama’s housing plan has given clearer direction on which borrowers should be assisted. However, there is still action you can take to avoid this devastating scenario. If you find your self in this situation here are some creative ways to help pull your self through these “Tough Economic Times!”
The best remedy is prevention. If you have yet to purchase a home the best advice is to not only buy within your means but live there as well. All too often buyers have calculated their budget within an inch of its life. If you have not factored in savings for emergency then you are not doing the right calculations for your home mortgage. There are plenty of free budget and mortgage calculators to help you make the correct calculations.
Now, for those already invested. Remain calm if your mortgage is under water. If you owe more on your home than what it is worth the last thing to do is panic. Markets rebound and if you are still in the financial position to keep paying on your mortgage, you should. This is the best way to get your return on investment. Too many buyers whose financial situation has not changed are opting to get out of their mortgages because they are afraid they will loose more. Not true. Real estate is a roller coaster of ups and downs. If you get out on a low point you are only making a bad situation worse. The rule of thumb for home ownership is you have to be willing to invest at least 7-10 years in a property to see that return.
For those whose financial situations have turned for the worse here are some possible solutions for keeping your home going while waiting on a new job to offset your costs.
Work with your Lender
Ignoring your lender will do you no good. Even if you do not have the answers or solutions to your financial crisis, it is important to show your lender good faith that you have ever intention of making good on your loan. In fact if you see an issue arising don’t wait till the bank takes notice. Contact their Loss Mitigation Department to explain your situation/
Tags: avoiding foreclosure, home advice, home help, home owner help
