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When considering a rental property you need to apply the first rule of real estate. If you have got that right then you need to look at more details. First is the COST. Several costs are key in the beginning and if you are not careful your personal finances will be in trouble.
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Read more... [Rental Property & Cash Flow]
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Like any other investment renting can be a money making tool. It just takes time make that money and is not a get rich quick process. If you watch late night TV you will hear a lot about those things and the cash flow schemes. Pay not attention to those! They are riskier than you think. Here is the simple reason why, you have to find someone to rent it from you and but what happens if you don't? Someone still has to pay the mortgage for the maintenance bills.
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Read more... [Making Money With Rental Property]
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It depends on your situation. If you need to be living in a place for a short period of time the answer is probably yes. A short period of time is about 1-4 years. If you are planning to live some place for longer than that and plan to own your own place then may be not. Renting also gives you time to shore up your personal finances and make sure you are making the right move. Owning a home is a commitment and you want to make sure you understand what is involved and are not working for the bank for too long.
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Read more... [Is Renting a good idea?]
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As we talked in the earlier article you own more of a property as more payments are made during the time you are paying off the loan. In other words you don’t own the house if you have a mortgage, it is the bank property until you pay it off. Since for most people their home is one of their largest assets and biggest debt until it is paid off it is in their best interest to pay it off early and stop sending their money to the bank and stop working for the bank as soon as possible.
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Read more... [Don’t work for the bank! (Part 2)]
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Purchasing property can be a daunting task. There are many steps, people and organizations involved to make it happen. It can be confusing but it really is not, but there are professionals to guide you through the steps as well if you chose to. The key point to remember is that it is your money not theirs; so don’t be shy to ask questions, make sure you get the best service and your questions are answered clearly and you understand. After all you are the one that has to live with the consequences and end up with payments for the next 15 or 30 years!
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Read more... [House buying step by step]
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Usually the bank or lender is supposed to check and make sure you can afford a loan amount - that is you can pay them back. Therefore in a sense they would limit you from over committing because they would not "qualify you for the loan" in other words, won't give you any money!
That is how it supposed to work, but with the recent market melt down how can anyone be sure? It seems that the banks forgot the basic rules to make sure anyone asking for money can actually pay their loan back and home values historically do not increase at very high rates. After all people have to be able to pay for all the things they buy and the boss tends to give only 3%-5% raises.
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Read more... [How much is right?]
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How do you know if you can afford a particular monthly payment? There are many factors involved; for example how much money you have saved or if you have a rich uncle who can bail you out when trouble comes. If you don't have a rich uncle here is good guide to manage your personal finances conservatively.
Assuming that you plan to pay off your mortgage debt via your monthly take home pay; a good guide is to spend no more than half of your monthly take home (after tax) on mortgage payment, property taxes, insurance and any other fixed cost you will have to pay each month (such as home owners association fees) combined. This way the next half of your income can be spent paying for food, utilities (water, heat etc), entertainment and saving for retirement!
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Read more... [What's the right monthly payment]
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When purchasing realestate the mortgage for it can be one of the biggest expense to cover, of course we are talking about a conventional 15 or 30 year loan here. Those fancy loans of ARM and interest only are a different ball game and generally are not suited for the average person buying a property to live in as their primary home. If you are looking for that kind of information it is not here – sorry! We are not a big fan of those and they can get you in trouble if you don’t know what you are doing.
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Read more... [Working for the bank]
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