Some might be inclined to think that real estate investment isn't a viable opportunity anymore. After all, with property prices declining so rapidly, spending a huge amount of money on real estate just seems ludicrous. However, if you have proven experience and knowledge of the property market then there is no reason why you cant indulge in real estate investment. However, in these tense times, dabbling with this sort of investment is not advisable. Leave it to the professionals and then you don't have to worry about making a bad purchase.
The same applies to property renovations. If you don't understand how this business works, avoid it altogether at the moment. It wont be money well spent if you make a loss on the property you have just bought, even after renovating it.
I think any sort of real estate investment is risky business at the moment, so until property values level out again, i don't think many people will be splashing the cash.
Wednesday 11 March 2009
Thursday 5 February 2009
Homes Under The Hammer - The Property Auction Show
Does anyone watch Homes Under The Hammer? This is a great show for people who want to get into the property game and invest in property. There are always so many people at the property auctions that you wouldn't think there was a credit crunch on! People are still trying to create a steady source of income by purchasing property and renting it out, thus having a tidy investment or retirement fund for the future.
Property auctions are still big business, and even though the estate agents are struggling, people are still trying to buy cheap property at auctions.
Property auctions are still big business, and even though the estate agents are struggling, people are still trying to buy cheap property at auctions.
Thursday 22 January 2009
Got a 100 percent mortgage?
there is almost a minimal chance that you will be able to get a 100 percent mortgage these days due to the current economic climate. Banks simply are not lending, and a 100 percent mortgage is very a thing of the past.
It was only a year ago that my friend managed to get a 100 percent mortgage, but if she tried now, i am pretty sure she would be refused. The banks don't have the money to lend, so a 100 percent mortgage is very risky for them.
However, i think it is a shame that people are being turned down for mortgages at this moment in time. I hope the market will pick up again and getting a 100 percent mortgage will become possible once again.
It was only a year ago that my friend managed to get a 100 percent mortgage, but if she tried now, i am pretty sure she would be refused. The banks don't have the money to lend, so a 100 percent mortgage is very risky for them.
However, i think it is a shame that people are being turned down for mortgages at this moment in time. I hope the market will pick up again and getting a 100 percent mortgage will become possible once again.
Thursday 15 January 2009
Is Now The Best Time To Buy Real Estate?
With the credit crunch, do you think now is the best time to buy real estate? If you have the cash, then why not...
It could be an investment, although lets not forget that the price of property in the US and UK has fallen dramatically, so you might not get such a good return on investment. However, if you have a bit of spare cash saved up and you want to buy something then why not buy real estate that perhaps you could rent out or give to your teenage children to live in for a while.
So, is now the best time to buy real estate? Well, it could be better, but it is still worth investing in if you know what you're doing.
It could be an investment, although lets not forget that the price of property in the US and UK has fallen dramatically, so you might not get such a good return on investment. However, if you have a bit of spare cash saved up and you want to buy something then why not buy real estate that perhaps you could rent out or give to your teenage children to live in for a while.
So, is now the best time to buy real estate? Well, it could be better, but it is still worth investing in if you know what you're doing.
Tuesday 13 January 2009
Pink Houses: Have You Seen One?
Have you ever seen any pink houses/homes? I travel around the UK a lot and i have often seen a few, usually around seaside towns! Not sure why lol. But i definitely think they are cool -i remember seeing a few in Bridlington, which is on the East Coast. The pink houses just stood out a bit and looked great by the seaside.
Have you seen any pink houses? Do let me know! You might not want to invest in one, but there may well be a few of us that like to admire them from the outside!
They are visually very appealing to females, but i would imagine that most men would run a mile if they were told they'd have to live in one!
Have you seen any pink houses? Do let me know! You might not want to invest in one, but there may well be a few of us that like to admire them from the outside!
They are visually very appealing to females, but i would imagine that most men would run a mile if they were told they'd have to live in one!
Monday 22 September 2008
Sell And Rent Back Property - Who Benefits?
There are many companies online now offering you the opportunity to sell your home and rent it back, in order to free up some equity and help with your debt management. Is this the right thing for you to do? Well, you have to consider it in detail.
Bad debts and rising interest rates has meant that homeowners are turning to sell and rent back companies who help make it sound like they can ease the financial strain.
Sell and rent back agreements allow homeowners to sell their property at a discount price to a company, which will then be rented back to them at market rate. The only problem is, you will end up selling your home for much less than it is worth, in order to get a quick financial fix and pay off any debts that are hanging over your head. Everyone knows how valuable an asset property is, and even as house prices fall, your home will still be worth a considerable amount.
However, please be careful if you are considering sell and rent back. There are many unregulated firms out there who will aim to profit from your misfortune. Do your research and ask around with families and friends. I think it was once a bit of a taboo to discuss your financial worries, but in our current climate there is no need to be ashamed anymore, since nearly everyone else is feeling the pinch too. Sharing your struggles might help ease the stress.
Bad debts and rising interest rates has meant that homeowners are turning to sell and rent back companies who help make it sound like they can ease the financial strain.
Sell and rent back agreements allow homeowners to sell their property at a discount price to a company, which will then be rented back to them at market rate. The only problem is, you will end up selling your home for much less than it is worth, in order to get a quick financial fix and pay off any debts that are hanging over your head. Everyone knows how valuable an asset property is, and even as house prices fall, your home will still be worth a considerable amount.
However, please be careful if you are considering sell and rent back. There are many unregulated firms out there who will aim to profit from your misfortune. Do your research and ask around with families and friends. I think it was once a bit of a taboo to discuss your financial worries, but in our current climate there is no need to be ashamed anymore, since nearly everyone else is feeling the pinch too. Sharing your struggles might help ease the stress.
Repossession - The Worst Kind
I just read a story about the supposed 'biggest repossession in Britain' as an £11million mansion has just been repossessed after a former banker and tycoon racked up debts too large to ensure he kept possession of his beautiful mansion.
I think this sums up all too clearly the economic crisis we are in. The owner, Robert Bonnier has reportedly managed to accumulate debts of around £15 million. The credit crunch wiped 20% of the home's value, which is ironic to think that Mr Bonnier paid £3million more than the property's asking price when he purchased it last year.
It is a shame that repossession is so drastic, but since Mr Bonnier was once a banker, one would assume he was only too aware of his finances and how to manage them, yet it would appear not to be the case.
Not long ago, we heard the very sad story about Christopher Foster killing his family in a frenzied attempt to try and end his financial woes. His mansion was about to be repossessed after it was revealed that Mr Foster owed £1 million to suppliers and £800,000 to the taxman. (Source: The Sun Online)
It has been reported that Foster set the mansion ablaze just a few hours before bailiffs were going to arrive and serve him his papers to repossess the mansion.
Financial worries can drive a man insane. Facing repossession is like having everything you have built up over a number of years suddenly taken away from you. The house that you love suddenly gone. This has been the problem with having such a good economy for so long, and money readily available. People get into debt and then cannot afford to get out of it. I just hope the nature of the story above is the only one of it's kind.
Have You Considered a Debt Consolidation Mortgage?
A debt consolidation mortgage is another term for an adverse credit mortgage, which may be used for this purpose. It may be interesting to note that many of the people who take out a debt consolidation mortgage are remortgagers who are trying to get their finances in order.
Basically, if you have a mortgage and yet also have financial problems, then you may look for an adverse credit mortgage to help sort out your personal finances. There can be many reasons for ending up in financial difficulty, not least with the credit crunch hitting us hard, so a debt consolidation mortgage might seem like the only way out to fix your finances and wipe the slate clean.
Many consider a debt consolidation mortgage as the first step to correcting their credit status. In the past year, the number of people taking out loans for this purpose has risen, and this may be because of the overall debt situation in the UK. Therefore, it is clear that some people who get a debt consolidation mortgage use the chance to use some of the equity in their home to repay existing debts.
Everyone has their own way of dealing with debt, but i suggest that is exactly what you do - deal with it; face it head on and don't brush it under the carpet and think it will go away, because it won't. There can be light at the end of the tunnel, but make sure you search for it.
Mortgage Debt And The Fear Of Repossession
When you take out a mortgage, naturally you then become in debt. It is a loan you are taking out and therefore has to be repayed. I think some people forget that a mortgage debt is still a debt, yet it is slightly different to a normal credit card debt, for example.
With a mortgage debt, you have to ensure that you keep up your repayments on the home you have, otherwise it may be repossessed.
Repossession is a drastic move, but sometimes it is the only way for lenders to claim back the lost money. In August 08 it was reported that the number of homes being repossessed has risen by an incredible 24% since 2007. These are worrying figures which mean people have been attracted by the offers of 100% mortgages which they can then not repay.
Lets just clarify the repossession process. It does not always mean that the mortgage holder loses their home. It is more a case of when the court grants an order for for the possession of a home. This process can actually be abandoned if the mortgage lender and borrower can come to some sort of agreement for a repayment deal.
In the second three months of 2008, mortgage possession claims grew by grew by 17%, compared with the same period a year earlier.
MORTGAGE POSSESSION ORDERS MADE - Source: Ministry of Justice
I think this shows just how big a mortgage debt can be, and taking out a 100% mortgage that you can't afford just isn't recommended, nor is it likely to be something offered by lenders anymore.
With a mortgage debt, you have to ensure that you keep up your repayments on the home you have, otherwise it may be repossessed.
Repossession is a drastic move, but sometimes it is the only way for lenders to claim back the lost money. In August 08 it was reported that the number of homes being repossessed has risen by an incredible 24% since 2007. These are worrying figures which mean people have been attracted by the offers of 100% mortgages which they can then not repay.
Lets just clarify the repossession process. It does not always mean that the mortgage holder loses their home. It is more a case of when the court grants an order for for the possession of a home. This process can actually be abandoned if the mortgage lender and borrower can come to some sort of agreement for a repayment deal.
In the second three months of 2008, mortgage possession claims grew by grew by 17%, compared with the same period a year earlier.
MORTGAGE POSSESSION ORDERS MADE - Source: Ministry of Justice
I think this shows just how big a mortgage debt can be, and taking out a 100% mortgage that you can't afford just isn't recommended, nor is it likely to be something offered by lenders anymore.
Debt Advice - Help Is At Hand!
We're all struggling to keep our head above water in this state of financial gloom, but if you are buying a property then it is worth knowing what sort of debt you will be in and for how long.
When taking out a mortgage, the debt that comes with it is a scary thought. Many seek debt advice and feel that it is essential in alleviating the financial stress that comes with taking a mortgage out. It can also put pressure on your relationship with your partner with whom you have the mortgage with. Financial problems are one of the biggest causes for the break down of a marriage / relationship. It is no wonder that people are seeking debt advice to cope with it all before it gets seriously out of hand.
One of the best places to get free debt advice is by calling the National Debtline on 0808 808 4000. They provide independent financial advice and may be able to offer a solution to your financial worries. It is FREE, CONFIDENTIAL and INDEPENDENT advice.
Be careful who you turn to though, as many will try and convince you that if you owe a lot of money to various companies, then the best solution is a debt consolidation loan, but this is not always the case, as my previous post on debt consolidation indicates.
It can be hard knowing who to trust when it comes to debt advice, but ensuring you stay one step ahead of the game will help alleviate any nasty outcomes.
Debt Consolidation - The Right Help?
If you are in a considerable amount of debt due to all sorts of loans, then debt consolidation might seem like the best option. Let me share my friend's experience with you.
My friend got into bad debt when he was injured through a roofing accident. He had to give up work and wait for an operation on his back. In the meantime, he needed cash and there was only one solution. He decided to take out a rather hefty loan to cover his losses and pay his rent etc, but this soon spiralled out of control. With £20,000 worth of debt, the only solution for him at the time was to try debt consolidation. The rates seemed attractive and it was his only way out. That was 5 years ago, and now that he has been back in work for 3 years, he is still paying a hefty amount to his debt consolidation company on a monthly basis. This will be ongoing for at least the next 10 years.
I think it is a shame that people feel so helpless that we have to let the debt consolidation companies take over, but for some it is the only way out.
I had a look at Martin Lewis' - The Money Saving Expert - blog on his website, as he detailed the debt consolidation problems facing many of us. He claims that consolidation for consolidation’s sake is ridiculous. Debts at 4%, 2% and 1% are not worth consolidating into a loan at 33%. I do see his point, and it is worth thinking about.
Martin Lewis believes that the two prime considerations for those in debt crisis (regarding the debts themselves this is) should be:
a) to reduce the cost of the debts
b) to ensure the monthly repayments are manageable.
For more information on Finance, check out my other blog: Guide to Finance
Understand A Tracker Mortgage
The tracker mortgage shadows the movement of the Bank of England Base Rate. Tending to offer a low rate compared to say a fixed rate or flexible mortgage, the tracker mortgage benefits from reflecting current economic conditions. Your payments will drop if the base rate drops, but will also rise if it rises.
Tracker mortgages are often more suited to borrowers who are looking for cheap initial payments and who can also take the risk that their payments could increase at a later date. Having a good, solid joint income will help ensure this is the right option for you. Also, some savings set aside for if the tracker mortgage rate rises will be beneficial to you. If your income doesn't increase then you will need to make sure you can pay your mortgage for that particular month(s) if the rate rises.
Whenever you are taking out a loan, be sure to read the small print. The interest rate will be set at a certain amount below base rate for 2 years. Be careful though, as your lender may reserve the right to review the situation should the base rate fall too low. You may also find that they specify a minimum rate that you will have to pay if the base rate plunges below expectations, in order to protect them from you ending up paying a very low mortgage rate. At the end of the day, these small print clauses then defeat the whole point of the tracker mortgage, so make sure you understand everything before agreeing.
First Time Buyer Mortgages - An Uneasy Start
In September 2008, it was reported that in July, 47,400 house purchase loans worth £7.1 billion were approved. This might seem like a lot, but when you consider that this was actually a 51% fall in volume and 54% decline in value on July 2007, then you start to realise just how bad the housing market is at the moment.
First time buyer mortgages also declined to 17,300, down 5% on June and 48% on July 2007.
If first time buyers can't even get a mortgage, then how will the property market survive? Many property developers are in the business that they are because they know they can renovate a house and price it at an amount that will instantly appeal to first time buyers.
I think it is awful that first time buyer mortgages are becoming less readily available. I would be interested to know just how many of us would be able to get a 100% mortgage these days. Many mortgage lenders simply fear that the money will not be able to be paid back.
Gill Montia from Financemarkets.co.uk reported that the average first-time buyer deposit rose from 13% in June, to 15% in July. As a result, the average loan-to-value ratio for a first-time buyer fell to 3.24 times income, down from 3.33 times income in June and reverting to the level recorded in July 2006.
I have to wonder just how much longer this situation can continue. Many first time buyers are being suitably "put off" by all the financial problems we are seeing in the news. With banks going bust and lenders holding onto their money tighter than ever, first time buyer mortgages are going to be hard to come by.
Compare Mortgages - Make The Right Choice
At this crucial time, it is more important than ever to compare mortgages. It might seem stressful to think about where you're going start, but i recommend going into your local building society and discussing the options. I am with The Leeds Building Society and i have found their services to be most helpful.
Or, you may prefer to scour the online resources and compare mortgages that way. I have complied a list of some the websites you can visit to help sort out your mortgage.
If you compare your mortgages online it will mean you can see the different quotes all in one place, and compare and contrast them all. However, you may prefer to go into each bank / building society and speak with an advisor before making any commitments. Speaking face to face can help sort out any queries you may have, whereas an online quote will only give you the bare facts. Maybe combine the two and don't make any hasty decisions before comparing all the mortgage options.
Know All About Your Fixed Rate Mortgage
A fixed rate mortgage is a loan where the interest rate remains the same throughout the loan repayment period.
This could benefit those of us who have a steady income and are aware of our outgoings each month in relation to the outgoing loan repayment for the mortgage. I have a few friends that have a fixed rate mortgage and they find it easier to be able to plan ahead for the next few years, because they know exactly what they will be paying. If you are struggling to find suitable work or have had a history of bad financial problems, then perhaps the fixed rate mortgage will not work for you, as paying a set amount each month could easily land you in debt.
On 17th September 2008, the Daily Mail reported that fixed rate mortgages have dropped below 5% as competition returns to the market. This is good news for buyers and current fixed rate mortgage holders. However, it was also reported that the cheaper 2 year deals have come with a catch, which means there is an arrangement fee of more than £3000.
The cost of a three-year fixed rate mortgage has fallen by around 0.56 per cent, while best buy five-year deals are down by an average of 0.4 per cent.
Does this mean that people are going to prefer to rent? Perhaps many of us will wait until this mess has been sorted out before trying to get on the property ladder or even considering taking out any sort of loan. I think people are genuinely frightened by the housing crisis at the moment and the fact that our property could be worth less than it was 10 years ago.
A fixed rate mortgage might seem like the best option, but it is more a case of who will be able to get one at the moment and is it worth even trying?
Buy To Let Mortgages - Know Your Area!
When considering a buy to let property, make sure you choose the right area. Location is of paramount importance in these crucial times. Choose the wrong area and you could see any potential profit disappear before your eyes.
When deciding upon the area in which to invest, ask a few estate agents who live locally and know the market well. They will be able to tell you about those areas that are in need of development, those areas that are quite affluent and also inform you of any other details that aren't necessarily local knowledge. Knowing what is in current demand will help you make the right choice.
Many people considering buy to let mortgages may well be prepared to do a little bit of maintenance on a property, perhaps then paying less for the house due to the work it requires. If you are capable of doing this, then by all means go ahead and renovate the property a little. If it makes it more appealing to prospective tenants, then obviously this is the most important thing, as this could increase your potential profit income.
I think it is important to minimise the chances of any void periods, so where there is no tenant in your property and you are losing income to pay back the buy to let mortgage. Naturally, this is a likelihood that one should take into account and it cannot necessarily be avoided, but can be minimised by making sure there is a new tenant lined up when the old tenant leaves. Show people round the property while the current tenant is still there with only a few weeks until they leave, so by that time, you may have a new tenant ready to move in and loss of income is minimised.
When deciding upon the area in which to invest, ask a few estate agents who live locally and know the market well. They will be able to tell you about those areas that are in need of development, those areas that are quite affluent and also inform you of any other details that aren't necessarily local knowledge. Knowing what is in current demand will help you make the right choice.
Many people considering buy to let mortgages may well be prepared to do a little bit of maintenance on a property, perhaps then paying less for the house due to the work it requires. If you are capable of doing this, then by all means go ahead and renovate the property a little. If it makes it more appealing to prospective tenants, then obviously this is the most important thing, as this could increase your potential profit income.
I think it is important to minimise the chances of any void periods, so where there is no tenant in your property and you are losing income to pay back the buy to let mortgage. Naturally, this is a likelihood that one should take into account and it cannot necessarily be avoided, but can be minimised by making sure there is a new tenant lined up when the old tenant leaves. Show people round the property while the current tenant is still there with only a few weeks until they leave, so by that time, you may have a new tenant ready to move in and loss of income is minimised.
What Are Buy To Let Mortgages
If you are considering a buy to let mortgage, then make sure you understand the basics. At a time of economic gloom such as this, making the right financial decisions is more important than ever.
Buy to let mortgages are specifically designed for people who want to really get stuck into the property market and buy one or any number of properties to then let to tenants. The owner's benefit is then being able to cash in on the capital value of the house itself. The loan repayment can be met by ensuring occupancy of the houses. The only question is, is this still a viable investment anymore? With house prices falling dramatically, one has to wonder if a buy to let investment is really worth it. The profit that was once readily obtainable has probably dropped significantly.
With the buy to let phenomenon driving house prices over the last few years, it may well just start to slow down now. However, one thing does remain, and that is the need of rental properties. With students guaranteed to need accommodation, this could be a good investment. Also, those on low incomes that have been refused a mortgage because of the recent credit crunch, will be desperately seeking rental properties at reasonable prices. Both parties could win here - the tenants and the landlord - if both are prepared to 'give' a little.
Buy to Let Mortgages specifically allow the rental revenue to be considered as income when considering the ability of the buyer to meet the ongoing mortgage payments. This is a huge advantage for many mortgage lenders and tenants. The terms of buy to let mortgages are likely to be somewhere in the region of 5 to 45 years, although this could indeed waiver as the economic slump hits us.
Buy to let mortgages are specifically designed for people who want to really get stuck into the property market and buy one or any number of properties to then let to tenants. The owner's benefit is then being able to cash in on the capital value of the house itself. The loan repayment can be met by ensuring occupancy of the houses. The only question is, is this still a viable investment anymore? With house prices falling dramatically, one has to wonder if a buy to let investment is really worth it. The profit that was once readily obtainable has probably dropped significantly.
With the buy to let phenomenon driving house prices over the last few years, it may well just start to slow down now. However, one thing does remain, and that is the need of rental properties. With students guaranteed to need accommodation, this could be a good investment. Also, those on low incomes that have been refused a mortgage because of the recent credit crunch, will be desperately seeking rental properties at reasonable prices. Both parties could win here - the tenants and the landlord - if both are prepared to 'give' a little.
Buy to Let Mortgages specifically allow the rental revenue to be considered as income when considering the ability of the buyer to meet the ongoing mortgage payments. This is a huge advantage for many mortgage lenders and tenants. The terms of buy to let mortgages are likely to be somewhere in the region of 5 to 45 years, although this could indeed waiver as the economic slump hits us.
Thursday 28 August 2008
Invest in Real Estate
According to All Business on the web, there are a few golden rules ro remember if you decide you want to invest in Real Estate. Most importantly, you need to have some money available for your planned investment. Naturally, you dont want to go into too much debt, so finding a legitamite means of obtaining some money is crucial.
As a general rule, you need good people skills, coupled with the ability to be a good negotiator. Previous management experience is also beneficial, and this will apply in all areas of your planned Real Estate investment. Having good time management and financial management is key in ensuring in your success.
A sound knowledge of the property market is important, as is being aware of where you want to invest in Real Estate. Check out the proposed neighbourhood and do your research. Is the area prone to flooding? Is there a lot of crime? Make a list of all the questions you might ask yourself.
If you do decide to invest in Real Estate, think about it carefully and make it a worthwhile project.
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