Real Estate - Real Estate Investment

Some buy to let landlords are beginning to feel the pinch of higher interest rates. This in turn has led to many lenders showing a reluctance to deal with new borrowers unless they can come up with larger deposits. The alternative is for the borrower to deal in property with higher rental potential - which usually means a higher capital cost. Of course, if you don’t have sufficient deposit in the first place, it’s unlikely that the higher rental properties are within your budget: a bit of a chicken and egg situation.
This can make it difficult for newcomers into the Buy to Let market who want to start low and build up their portfolio. That isn’t to say it can’t be done; there are still a few lenders giving ‘good deals’ but they are becoming few and far between.
With interest rates looking at a potential 6% by December 2007 the lenders are concerned that too many borrowers will be struggling to ensure that the rentals will cover their mortgage payments. In some cases lenders will accept that the rent is being subsidised by the borrower’s other income as long as that other income can be verified as more than ?75,000 pa. Below that income level you will be required to show proportionally higher rental cover to get the same deal.. By way of illustration, a loan of ?85,000 to an experienced landlord would require a monthly income of ?468 whereas a new landlord would need ?531 to meet the criteria. In other words, lenders are favouring those with experience unless there is a provable safety net of other income.
Concern has been expressed by the FSA that there is a growing number of repossessions among Buy to Let properties: by December 2006, 25% of these properties sold at auction had been repossessed. Many of them were new build flats. This has been caused partly by excess supply leading to lower rents and partly the failure of newbuilds to go to a premium. Statistics from one of the leading mortgage lenders reveal a fall of 4.4% in prices of newbuild flats against a general market growth of nearly 11%.
Advice from one experienced Buy to Let owner is that you must ensure that your first property produces a comfortable rental income which can stand you in good stead should any subsequent investments suffer a rent shortfall.
Four interest rate rises have exacerbated the problem: mortgage payments have increased by around 20% while rents have gone up by only 5%. However, there is a certain willingness to make up any monthly rent deficit from private funds as the potential for long term capital growth is generally seen as far outweighing any temporary blips.
So, before you launch yourself into the buy to let market, just make sure you have that little extra in hand against the next rainy rent day.

The UK has a chronic shortage of housing and in particular affordable housing, so it seems ironic that arranging property development finance for brownfield sites can be a real headache.

Lets start by defining what a brownfield is, essentially it can be any piece of land which has had a previous use, such as a backgarden or parking area. Typically though, you would think of a brownfield site as being petrol stations, workshops, factories, office blocks and car parks. To be called a brownfeld development you would usually expect to see complete site clearance with the previous structure being completely removed.

Local planning authorities are under pressure to ensure that 60% of land used to build new homes is built on land that has had previous use.

Arranging property development finance for brownfield sites can cause problems because of the extra expense associated with examining the land and clearing any contamination. Environmental controls require that the soil be tested for contamination and that if any is found the top soil has to be completely removed. This contaminated soil has to be disposed of in special landfill. This process costs a significant amount of money.

The extra costs associated with clearing a brownfild site and the limitations caused by the size of the plot are the main reasons why it is such a challenge to arrange property development finance. However, for the property developer who is prepared to put in the extra effort there are some handsome rewards.

Given that most brownfield sites are in town centre locations, and the continuing demand for luxury apartments there is a strong motivation to work through the challenges provided by these types of plots. There are specialist lenders willing to fund development of petrol stations and factories so there is a way to get the job done.

The types of property development funding available varies from modest Loan to Values (LTV’s) with highly competitive interest rates, right up to the specialist schemes offering up to 100% funding, although the rates are reflective of the risks.

Once the development of a brownfield site starts it is really important to get the project competed as quickly as possible, after all, time is money!

If you are planning to undertake the development of a brownfield site in the near future, it is important to collate as much information you can about the project: Prepare your CV confirming your building experience and examples of projects you have undertaken. It is worth commissioning any professional reports, including ground investigation, environmental reports and a valuation. Finally you must provide a full financial evaluation including the costs associated with site clearance.

Banks have a reputation for being slow to release staged payments and for being rigid when problems arise whereas specialist property development finance companies tend to be more flexible and willing to accommodate last minute changes to plans, but their fees do tend to be higher so it is important to use a broker.

Thinking of buying a home or refinancing? learningaboutstuff.com has just what you need.
There are articles on many areas related to real estate mortgages. Not just general infomation, but also information on specific topics.
Learn about:
Financing Mobile Homes
ARMs
What you can do if you have bad credit.

Learn about specific regional areas that you are interested in like: California, New Jersey, Ohio and Florida.

Now you can learn how to use financial calculators, both online and on paper (sometimes you aren’t at your computer).

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Is A Reverse Mortgage Annuity Right For You?

Whether you are looking to pay off bills or just looking for additional income to enjoy your retirement, a reverse mortgage annuity may be the answer for you. reverse mortgage annuitys can help homeowners who are house-rich but cash-poor stay in their homes and still meet their financial obligations. The three basic types of reverse mortgage annuity are: single-purpose reverse mortgage annuity, which are offered by some state and local government agencies and nonprofit organizations; federally-insured reverse mortgage annuity, which are known as Home Equity Conversion Mortgages (HECMs), and are backed by the U. The reverse mortgage annuity is registered as a loan against the property and is subject to interest charges of about 1?% above the regular interest rate for a conventional five-year mortgage. Reverse mortgage annuity loan advances are not taxable, and generally do not affect Social Security or Medicare benefits. The money from the reverse mortgage annuity can be used for home maintenance, home-help services and extra income-all of which, could be important in allowing seniors to continue living longer in their existing homes.

Reverse mortgage annuity provide seniors with the opportunity to unlock the equity invested in their homes. When reverse mortgage annuity are used for investment purposes, the accruing mortgage interest is tax-deductible against any investment returns generated with the mortgage proceeds, providing individuals with a stream of tax-sheltered income. Furthermore, while annuity income is taxable, the income generated by a reverse mortgage annuity is not. To qualify for most reverse mortgage annuity, you must be at least 62 and live in your home. Arranging a reverse mortgage annuity is simple enough. It’s a question of knowing what you’re comfortable with and looking at what makes a reverse mortgage annuity the right choice. The bank’s personal investment managers will work with a customer to decide if a reverse mortgage annuity is a good option. On the other hand, by gradually reducing their equity in the house, the reverse mortgage annuity could pose a problem for seniors wanting to sell and move into other accommodation.

The bank’s personal investment managers will work with a customer to decide if a reverse mortgage annuity is a good option, he says. If you are considering a reverse mortgage annuity, shop around to compare your options and the offered terms. As you consider a reverse mortgage annuity, be aware that: Lenders generally charge origination fees and other closing costs for a reverse mortgage annuity. No matter which type of reverse mortgage annuity you are considering, be certain you understand all the conditions that could make the loan due and payable. Ask a counselor or lender to explain the Total Annual Loan Cost (TALC) rates, which show the projected annual average cost of a reverse mortgage annuity, including all itemized costs. Learn as much as you can about reverse mortgage annuity before you talk to a counselor or lender.

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If you’re a veteran home shopper you may already have
learned from experience what type, location, and price of home is good for your
family. Setting some guiding principles and priorities is a good way to start
the hunt. First, make a wish list. This is a great starting point for anyone
and will help get your priorities in order! Knowing what you want or need is
half the battle.

This will include some essential questions you need to ask yourself also like,
what you can afford’, are you willing to do renovations and how much’, and
lists particular needs for your family.

Location can be flexible for some families, but must be specific for other
families. Work, disabilities, and kids are just a few factors that can sway
location necessities or desires. For instance, if you don’t want to commute
long distance to work you will need to consider travel time to work. If you or
a family member have disabilities that require special treatments or services,
you will need to consider travel time to current providers, or consider accessibility
of services in the new location. Local schools, and their reputations, will
play an vital role in location for those families with children, as well as
neighborhood safety. As you can see there is more than just getting a good mortgage deal when shopping for your home.

By investing in commercial property you can open the door into an entirely new financial world. Developing an awareness of investment property is like suddenly getting a new pair of eyes, which allow you to see farther in each direction. Look at it like this - if you make a nice salary, say ?90 per hour, you are limited by the number of hours in the year it is physically possible to work. Never mind the fact that you are also limited by the number of hours that actually exists in a given year. But what if you make only ?15 an hour? How in the world are you ever to make your dreams come true?

What you need to do in order to become a property investor is educate yourself. Don’t just grab a property llisting and jump in as though you were playing at the roulette wheel in Vegas. Although there is a certain amount of luck involved, this is not a gamble. You must learn about the property market so you can make educated guesses about where to put your money. Learning to read financial statements and other basic accounting skills is a great first step. In fact, it is necessary. You can’t win at the game unless you know the language of the game, and that language is finance.

Read a few books on property investing. You will need to know the types of property that is out there, as well as the types of investments. You will need to know the terminology and you will need to get to know people in the business.

Investing in commercial property is a great way to make your money work for you. If you read a daily property listing and learn as much as you can about investment property and act wisely, you can become the sort of person who spends most of his time managing his money, instead of the sort of person who sweats bullets for every dollar he makes. Learning is the key. Remember the old adage, “knowledge is power.” That is especially true in the area of finance. Don’t let your future be determined by the scraps an employer is willing to throw you; go out and make your dreams happen.

If you first invest in your education, you can make your dreams come true with commercial property. It’s all just a question of knowing how and it is something anyone can learn. The knowledge is out there. Learn to think like a wealthier person and you will learn to become one. It may sound like a cheesy corporate slogan, but the more you imagine your success the more your success becomes a reality with the right ideology.

Investing in commercial property is very much like a magical answer to becoming wealthy if you think about it in just the right way. Investment property isn’t magic, however; it’s a skill like all of the other skills that you have. You can learn to do it, just the same as you learned to play your favorite video game. It’s all a matter of making it a habit to read a daily property listings and collecting the knowledge you need to be successful.