Refinancing your mortgage is something most homeowners consider at least once throughout the lifespan of their home loan. It allows you to pay off your previous loan by applying for a new one that has better financial advantages. While there are many good reasons to refinance, here are five common ones.
Scoring a lower interest rate. The number one reason homeowners decide to refinance is to secure a lower interest rate on their mortgage. Not only does this save you money in the long run and decrease your monthly payment, but you can start building equity in your home sooner.
Using an improved credit score. Even if interest rates have not dropped in the market, if you’ve improved your credit score over the last few years, you may be able to reduce your mortgage rate.
Shortening the loan’s term. If interest rates are decreasing, there is a chance you may be able to get a shorter loan term with little to no change in your monthly payment, allowing you to pay off your loan sooner.
Switching from an adjustable rate to a fixed rate. If you chose an adjustable-rate mortgage with great introductory rates when you initially financed your home, that rate may increase significantly over the years. By switching to a fixed rate while interest rates are low, you can protect yourself from future increases.
Cashing out home equity. If there is a big purchase or payment on the horizon, such as funding a wedding or going back to school, your best option may be to use the equity you’ve built in your home to borrow money at a lower cost.
Congrats!! You’ve just purchased your first home and it’s time to start filling it up. But, where to start? Below is a list of must-haves for each room in your home!
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Living room: Aside from standard furniture, like a couch, chairs, coffee table, and television, there are a few other staples you should consider purchasing, such as a plush rug, floor lamp, TV stand with cupboards or drawers, and throw blankets.
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Kitchen On top of dishes, silverware, and glassware, don’t forget other kitchen essentials such as a can opener, bottle opener, toaster, strainer, oven mitts, baking sheet, measuring cups and spoons, and cooking utensils. Plus, it’s a good idea to stock up on basic seasonings, oil, and other commonly used condiments.
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Bedroom When you think of your bedroom, purchasing a bed frame, mattress, bedding, dresser, hangers, and bedside table are the first items that come to mind. In addition to those, you may want to consider picking up a table lamp, laundry hamper, wall or full-length mirror, wall or door hooks, and under bed storage bins.
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Bathroom. A bath mat, shower curtain, shower liner, toothbrush holder, hand soap dispenser, plunger, and toilet brush are must-have items for each bathroom in your home.
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Cleaning supplies. New home means new cleaning supplies. Start by purchasing dishwashing soap, laundry detergent, handsoap, disinfectant spray, glass cleaner, floor cleaner, mop, broom, and sponges.
Other. It’s always a good idea to keep a few maintenance and safety essentials on hand in your home. Some items to consider are a step ladder, small safe, first aid kit, batteries, flashlight, lighter, extension cord, toolbox, and duct tape.
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With the winter holidays upon us, we’re in what’s usually a quiet period for the mortgage and real estate industries. But with this most unusual year just about over, there are still some developments worth noting.
You’ve read this from us before, but mortgage rates are still at all-time lows. Normally, the winter is a quiet time for home purchases, which can mean mortgage lenders have a little more capacity to process refinance applications. If you haven’t refinanced recently, now could be a great time to take advantage of that efficiency, and let your bank account benefit from the low rates.
Most likely, the early part of the new year will feel very similar to when it comes to mortgages and real estate. But, the winds of change are blowing, and mortgage rates seem poised to start rising again before too long. Here are the key trends to look out for in the year ahead.
Perhaps the biggest effect president Trump had on American homeowners was limiting the tax deductions available to them. His policies, which rolled back mortgage interest as well as state and local tax deductions for middle-class homeowners, made owning property more expensive for many.
On the heels of this week’s Federal Reserve meeting, we refreshed our guide to help you understand how the Fed’s policies influence mortgage rates. Our central bank does not directly dictate mortgage interest, but its influence on other key economic indicators does have a knock-on affect to what homeowners pay.
If you’re looking to buy an empty lot to develop, you should know you won’t be able to do it with a standard mortgage. For that kind of transaction, you’ll need a land loan instead, which will have different terms and regulations. If you’re considering this type of purchase, here’s what you should know.
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Hundreds of courses claim to help you turn real estate into a seven-figure income, yet so few of them deliver on those promises. Real estate investors and agents will tell you that selling homes and properties isn’t all that hard once you sort out the details. These experts have been working in the industry for so long that seven-figure incomes can be the norm. You don’t even need to invest exorbitant sums to achieve that level of success.
So what does it take for a regular person to become a successful real estate investor and earn big? Here, 15 members of Forbes Real Estate Council take a deep dive into the things anyone should be doing if they want to use real estate to make a fortune.
Members of Forbes Real Estate Council share tips on how regular people can make a profit with real estate.Photos courtesy of the individual members.
1. Do Your Research
Knowledge is key. Learn as much as you can about the market you are investing in, the asset type and comparable assets in the area. Learn as much as possible about different ways to invest in real estate. Too often, the traditional means of investing in real estate overshadows what would oftentimes be better suited for an individual investor. The more you know, the better. – Dillon Deffense, NB Private Capital LLC
2. Live Below Your Means
Start by living below your means, and then use the money you’re saving to invest in real estate. You can start by buying a single-family rental or by passively investing in a larger multifamily asset. You may also be eligible to invest some of your retirement account into this asset class using a solo 401(k) or a qualified retirement plan. As you build your portfolio, continue investing the cash flow back into the real estate. – Chris Roberts, Sterling Rhino Capital
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3. Build A Personal Brand For A Niche Market
Build a personal brand that will cater to a niche market of buyers and sellers matching your hobbies and subjects you are passionate about. Cross-market between your real estate services and your personal brand followers to build an immediate sphere of business. – Mor Zucker, Team Denver Homes – RE/MAX Professionals
4. Make Sure You Understand The Risk
Have a unique understanding of the risks or the capability to manage the risks associated with the investment. A good example is an occupier who buys a vacant building, moves their rent-paying business in the building and then sells the now occupied building as an income producing property. – Richard Lackey, City Commercial Real Estate, Inc.
5. Turn Your Home Into A Rental
Turning real estate into a fortune takes time, but if you’re a middle-class homeowner, a pivotal moment can come when you’re moving. Instead of selling your home, the better wealth-building option could very well be turning your home into a rental property. Assuming that you have a long view and keep the unit occupied with tenants paying you rent, you should see very strong returns. – David Friedman, Knox Financial
6. Start As Soon As Possible
As with any investment, the sooner you enter the market, the sooner you begin building wealth. Taking a long-term, strategic approach to real estate investing and moving aggressively is the best way to grow your fortune. Leverage is your friend, so don’t be afraid to borrow money. Stay the course and look for opportunities to trade up and you’ll be well on your way! – Megan Micco, Megan Micco, Incorporated
7. Be Patient And Disciplined
The best way for a regular person to create wealth through real estate is to decide on whichever strategy suits you best and be patient. As a wealth builder, real estate is incredible, but it does take time and you need to have discipline. Nothing happens overnight. – Andreas Johansson, Berkovitz Group LLC
8. Use Other People’s Money
Learn how to renovate and flip one house. After doing this, find someone that has money and the ability to borrow from a bank. Trade your work/labor and knowledge and gain sweat equity without having the money. Many people do not have the time to fix and flip properties, but would welcome the opportunity to fund the deals with someone they trust. – Bruce McNeilage, Kinloch Partners
9. Invest In Turnkey Rentals
The No. 1 goal should be to achieve financial freedom by investing in turnkey single-family rentals. Once you’ve bought your time back, you can dedicate yourself 100% to real estate investing. Find investments that generate better ROI, build wealth and leave a legacy for your children. – Eric Martel, MartelTurnkey
10. Watch YouTube Investment Videos
The best tip is to start watching YouTube videos on real estate millionaires, how to get rich in real estate and how to start investing in residential or commercial real estate to make a fortune. You will learn the language and how other successful investors are making money in real estate investing. Always keep learning and take action. – Pamela J. Goodwin, Goodwin Commercial
11. Use The BRRRR Method
Use the BRRRR method—buy, rehab, rent, refinance and repeat. First, find a market where you can buy a home with as little as $10,000 to $20,000 down. Invest another $10,000 fixing up the property, and then have the property reassessed. Assuming it’s now worth more, refinance and use whatever money you’ve gained to purchase your next property. Start small and build equity over time. – Kevin Markarian, Marker Real Estate
12. Pick A Market And Own It
I have two good friends who are slowly building a real estate empire. They are buying affordable single-family homes, spending investment dollars doing basic upgrades and increasing the rent. In my opinion, this is the fastest and easiest way to scale up recurring revenue while building up equity. Pick a market you like and own it. You make money on the buy, not on the sale. – Sean Lyons, Jackson Dearborn Partners
13. Partner With Syndicators
Take it one step at a time by partnering with syndicators who can buy and manage properties. In a syndication, you can bring a small portion of the down payment. Have an active and experienced investor run the deal and make money for you. Then take the profit, reinvest in another deal and build your wealth one step at a time. – Ellie Perlman, Blue Lake Capital LLC
14. Don’t Sell If You Have Good Cash Flow
Never sell if you have good cash flow. Real estate has amazing tax benefits that can be realized for many, many years like depreciation and tax-free liquidity-using debt. Once you have recurring income with sound management, you can realize financial freedom for a lifetime. – Ken McElroy, MC Companies
15. Deploy Capital
Keep deploying capital. When you have equity in a property, refinance it out and put that capital into another deal. The magic of leverage is that it can have a compounding effect on your assets when risk is well-managed. Though it’s great to own properties free and clear, the return on equity is so much higher when those assets are leveraged and redeployed. – John Kobierowski, ABI Multifamily
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Things are coming to a boil in the market for U.S. homes, and it may be the right time to sell.
In October, prices for houses across the U.S. registered the fifth-largest monthly gain since 1996 and the strongest in 15 years. The heat is coming from a mix of factors, including limited inventory, suburban migration and rock-bottom interest rates.
According to a recent report from the Federal Housing Finance Agency, U.S. home prices rose 7.8% in the 12 months ended September 30, the fastest climb in more than a decade. The typical U.S. home appreciated by 1% in October alone, to $262,604, the best monthly gain since the summer and fall of 2005.
“This is some of the fastest home price appreciation in the modern era,” says Jeff Tucker, a senior economist at Zillow, which compiled the data on October’s spike. “I don’t think this pace of appreciation can go on forever. It’s just too hot.”
Leading the way are non-coastal states out West; Idaho jumped the most, with a year-over-year increase of 14.4%. That surge was fueled by Boise, where values have surged for decades, as the city offers the amenities of West Coast hot spots like Seattle but at a more affordable price. Since 1991, the median Boise home has appreciated 391%, according to the FHFA, one of the biggest jumps in the country.
Trailing Idaho is Arizona, with an 11.1% year-over-year gain, but for different reasons: Snowbirds are flocking to Phoenix, Tucson and the surrounding areas. Washington State (10.8%) and Utah (10.7%) follow close behind. At the bottom of the list are Alaska and Hawaii, though even in those places homes have gained about 5%.
Inventory is at the heart of the boom: Construction slowed in the years after the Great Recession, which reduced supply. Availability took another hit in the pandemic, which has led many owners to stay put rather than deal with the hassle of listing their homes. For now.
“I think if you have the choice between living in an apartment right now and living in a home, you’re going to stretch to get a home,” says Jilliene Helman, CEO of real estate crowdfunding site RealtyMogul, who sees a flight from cities pushing up prices in the suburbs. “There may be some expectation, whether it’s realistic or not, of remote work continuing.”
The shifts have sped up the action on deals, too, with the typical home listing last week receiving a seller-accepted offer in 13 days, down from 31 days a year ago, according to Zillow. With interest rates still stuck at historic lows, buyers are incentivized to pick up the pace even more, which is likely to keep prices high—at least in the short term.
“It would take several months of excess listings and maybe softer demand to rebuild inventory to a typical level,” says Tucker. “That’s why we forecast price appreciation to remain really strong and to begin reverting toward normal . . . maybe next fall.”
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4 signs you’re ready to invest in real estate, according to a financial planner and a landlord
Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.If you’re ready to invest in real estate, there are a few sure signs, experts say.You’ll have a solid start on saving and investing for retirement, and you’ll likely be funding both your 401(k) and IRAs, if available, with cash left over. Additionally, you’ll have the time needed to manage real estate, including the time to buy it and work with any tenants you have. Having the cash to get started is also necessary, and it will likely require a full 20% down payment to buy an investment property.Policygenius can help you compare homeowner’s insurance policies to find the right coverage for you, at the right price »
If you’re considering investing in real estate, there’s a lot to know before you make your first purchase. It’s unlike any other type of investment you’ve owned so far, and will be different in everything from how you manage it to how you earn from it.
For anyone who’s wondering if becoming a landlord is the right move for them, a financial planner and a real estate investor say there are a few signs that it’s right for you. 1. You have a solid start on saving and investing for retirement
Before anyone starts working towards investing in real estate, financial planner Riley Poppy says they should already be saving for retirement and have cash left over.
“I would typically like to see clients have their established buckets first, like their 401(k), their Roth IRA, and maybe a brokerage account,” he says. This is a foundation that anyone considering investing in real estate should build before becoming a landlord.2. You have the free time to manage your investment
Time is of the essence in real estate investing — and you’re going to need a lot of it.
Poppy says he generally sees his clients take on real estate investing after changing their work schedules or roles. “You should have the extra time to manage the property and stay on top of that. Sometimes, it can be like another full-time job,” he says.
It can also be more than just managing the properties. “You might have to have some legal work done to turn that into an LLC, or you have to do some of the marketing,” Poppy says.
Real estate investor and landlord Becky Nova agrees. “People think that they’re just going to get mailbox money, and real estate is not that,” she says. In her experience, real estate investing for anyone wanting rental income also involves a lot of customer service. And, all that management takes time and energy you’ll need to have before investing.3. You have the capital needed to get started — generally, that means cash for a down payment
The process of buying an investment property is a lot like buying a home, but in some ways, it’s more difficult. “There’s typically a little bit more upfront capital requirements for investing in real estate,” Poppy says.
Lenders see rental properties as a higher risk, and charge more for them in interest and require larger down payments. At minimum, you’ll likely need a full 20% down payment to be able to start investing in real estate.
If you have the cash on hand to start investing in real estate, it’s likely a sign that you’re financially ready to start if your other goals are met. However, keep in mind that you’ll also need other cash to keep and maintain that building.4. You have a tolerance for risk
Like any investment, profit from real estate isn’t a given. And, anyone who’s considering investing in real estate should do so with that understanding.
Poppy says that he wouldn’t say that real estate is a better investment than stocks, or vice versa. “There are so many variables there,” he says. “Real estate can come down to the location. And real estate reacts differently when the market does poorly, and sometimes real estate can do well when the broader market is doing badly.”
While the same can be said for the stock market, it’s worth noting that real estate is unique in some of its risks.
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I know people are hearing about Twitter, Facebook, Amazon are all adapting work from home plans or ideas. I am also aware we are seeing more work from home jobs in showing on Monster.com and Indeed. So that work/life balance is really important. So having a space for just work is important and vital to keeping professional/personal separate.
Whether you work full-time at home or occasionally need to conduct business in the evenings or on the weekends, a home office a great way to utilize an extra room. A dedicated workspace in your home can be designed to increase productivity and comfort. Here are 5 ideas to get you started.
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Office Chair: Invest in a good office chair. Investing in an ergonomic office chair is essential. You may be spending anywhere from 30 to 50 hours a week sitting in it, so your back will thank you. Purchasing one with multiple adjustments is ideal so it fits you just right.
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Lighting: Switch up your lighting. Fluorescent lighting has been proven to be hard on the eyes. Make the switch to LED or halogen light bulbs in your home office and try to let in as much natural light as possible. Also, consider finding a desk lamp to reduce headaches and eye strain.
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Clean and Organize: Keep essentials in reach and organized. Nothing says productivity like a clean, neat workspace. Select a desk with a lot of storage or install creative shelving to keep items like pens, pencils, extra batteries, calculators, notepads, and more stored within arm’s reach.
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Keep it Bright: Decorate bright. Pick a color you love and use it to spice up the room. Use cheery yellow or red or relaxing tones like green and blue, instead of beiges and browns.
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A room with a view: Aim for the view. If possible, place your desk so you are facing a window instead of a blank wall. Natural light can do wonders for staying alert and you can give yourself a short mental break when necessary by looking to the outdoors.
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Since 2020, one of the popular questions for homeowners are, What do we do next? Do we refinance or not? Either due to change in income or change in career, this is a decision that you should know what are the options. So here is what to keep in mind when thinking about refinancing:
Refinancing your mortgage is something most homeowners consider at least once throughout the lifespan of their home loan. It allows you to pay off your previous loan by applying for a new one that has better financial advantages. While there are many good reasons to refinance, here are five common ones.
Scoring a lower interest rate. The number one reason homeowners decide to refinance is to secure a lower interest rate on their mortgage. Not only does this save you money in the long run and decrease your monthly payment, but you can start building equity in your home sooner.
Using an improved credit score. Even if interest rates have not dropped in the market, if you’ve improved your credit score over the last few years, you may be able to reduce your mortgage rate.
Shortening the loan’s term. If interest rates are decreasing, there is a chance you may be able to get a shorter loan term with little to no change in your monthly payment, allowing you to pay off your loan sooner.
Switching from an adjustable rate to a fixed rate. If you chose an adjustable-rate mortgage with great introductory rates when you initially financed your home, that rate may increase significantly over the years. By switching to a fixed rate while interest rates are low, you can protect yourself from future increases.
Cashing out home equity. If there is a big purchase or payment on the horizon, such as funding a wedding or going back to school, your best option may be to use the equity you’ve built in your home to borrow money at a lower cost.
Make sure when refinancing, TALK TO A PROFESSIONAL. This is your pocket and your home so talk to your local Agent and Lender.
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Hunting for a new home online is a great place to start your search, but it should not be your end all be all. Good listing agents are excellent at highlighting the best features of the home, but keep in mind there may be more than meets the eye. To make the most of your time and efforts and gather a well-rounded picture of home listings online, keep the following three things in mind.
Stay up to date. When you start your search, make sure you find a site that pulls up-to-date listings directly from the multiple listing service (MLS) where real estate agents actively post their most current homes for sale. Many online resources update less often or fail to remove listings that are off the market, making it more difficult to sort through the clutter.
Pictures can be deceiving. Real estate photographers are experts at showing a home in the best possible light. Many use tools and strategies to boost appeal, such as a fisheye lens to make areas look larger and creative editing to make colors and textures really pop. But, often listings will not contain photos of unappealing parts of the home, like small closets or outdated bathrooms.
See it to believe it. Once you find what appears to be your dream home online, call up your real estate agent and schedule a showing. You want to take the opportunity to vet the home in person and explore every part of it before beginning the offer process. Your real estate agent will help you cover all your bases and will ask questions you may not have thought of.
If you’re looking to refinance your home or possibly sell, you’ll need a killer appraisal. A bank will not refinance a home for more than it is worth, and a potential buyer will not pay more than the recognized value of the home.
Here are 5 simple steps for a better home appraisal.
Tidy your space Make sure your yard looks well-groomed and the interior of your home is clean clutter-free. It is well worth the investment to have the home professionally cleaned and have your yard serviced.
Invest in the right types of renovations Kitchens and bathrooms are the best types of renovations. They will typically provide 80% ROI. High-efficiency appliances and upgrades that improve the overall efficiency of the home are well worth the investment.
Do your homework Research and provide your own comparable valuations for similar properties in the area. Note your tone. You don’t want to come off as defensive but rather helpful.
Be available but not in the way Be present to assist with the process but don’t be the appraiser’s shadow. You want to appear helpful, not nervous that he’ll find something wrong!
Appraisals can be helpful in increasing the sale of your home or assisting in refinancing your mortgage. Use these tips and you’ll get a better value for your home.
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