Over the past decade, thanks to a real estate market that has been performing consistently well, home equity financing has become a viable option. This in turn has made the credit or loan option for home equity financing for consumers worth considering. Since everyday Americans realize the value of owning one’s own home to raise capital and refinance debt, home equity as a solid foundation is a powerful financial base to build on.

The year 2003 was a rollercoaster ride for the American stock market, but was consistently steady for the real estate market. Though the prices of homes continued to soar, it proved to be a happy trend as it proved that people still saw a home as a smart investment. This is good news for you, house owners—it signifies that despite the economic outlook, the value of your home continues to appreciate. This perhaps should give you the impetus to consider taking a financing option such as a home equity loan or line of credit.

Why consider home equity: Take for instance the rising worth of your own home and the boom in the real estate market—two solid reasons for you to seriously consider taking home equity financing. For one, home equity financing comes with a lot of tax advantages for you. You might also be able to reduce your taxes by claiming the interest you pay on your home equity credit as a deduction. Speak to your tax consultant about this. If you want to borrow money or secure your debt, you’ll find home equity products a smart choice since they carry a lower interest rate than other loans and may, therefore lower your monthly payments.

How to leverage your home equity financing: If you want to get the best out of your home equity financing, you could choose to do it as most people do: use it to refinance your debt and pay back higher-interest loans. But if you are fortunate enough not to have loan balances to repay, you can further raise the value of your house by improving it.  Perhaps you want to give a facelift to your kitchen or garage? Perhaps you need to add a second storey? These projects can easily be financed by home equity credit. Take a look at just how fellow-Americans get the most out of their home equity. And then, put it down to the boom in the real estate market.

Your kind of home equity plan: You can choose from either a home equity loan or a home equity credit line—something that largely depends on your needs. But to set yourself into estimating how much financing you require, you should consider a home equity loan. If you do, you will need to borrow only as much as you need for your home improvement project. But if you can’t estimate your needs, your best bet is a home equity line of credit might be a better choice. This is also helpful if you have more than one need such as reducing your credit card out standings and debt, besides also paying for a big purchase—both of which will demand ready access to huge sums of cash.

If your need is for stability or flexibility, yet again, home equity loans give you a steady payment plan. This means that your interest rate and monthly payments remain fixed over time. On the other hand, a home equity line of credit is as flexible an option as a credit card with your payments being judged against how much you borrow and the interest rates varying proportionately with a change in Prime Rates. And, if you need financing all together or once in a way, think again because a home equity loan can give you all the money you need all at once too! Besides, with this, you can borrow as much as you like when you want it, just so long as you remain within your prescribed credit limit.

Financing your home is a big decision for you. True, there are very many home equity loan products available today, but you need to think well about the home equity line of credit that suits your financial goals.

3 Mortgage Loan Options

When it comes to home loans there are plenty of options to choose from and it can be hard to determine which one can be right for you. Let’s have a look at the three main types of mortgage loans there are available and what they have to offer to help find one that will suit your needs.

1. The first and most popular form of mortgage loan is the fixed mortgage loan:

30 year fixed rate: this loan is the most commonly used loan today as it offers the low monthly repayments and is the best option for home owners who want to stay in their house for a long time. Advantage – you have more cash in your pocket each month. Disadvantage – you pay more for the loan in the end compared to shorter loans.

15 year fixed rate: this loan allows you to pay your home off in 15 years, most likely before your children finish school or before your retirement. You save in the long run. Advantage – you pay half the interest of a 30 year loan. Disadvantage – you have to pay higher monthly repayments.

Biweekly loan: this loan is usually done on a 30 year fixed rate plan but by paying every fortnight you add in extra payments every year and usually have your loan paid off in about 23 years. This loan also builds your equity in your home a lot faster. Advantage – you pay your home off faster and pay less interest. Disadvantage – you have to pay every two weeks.

Adjustable rate mortgage or (ARM): this loan is great because it works on interest rates and they usually start off with a lower interest rate than a fixed rate home loan. This leaves you paying less each month but leaves you at risk of paying a higher interest if the rates go up.

Advantage – when your interest drops so does your repayment. Disadvantage – if your interest rate rises so does your repayment.

2. Next of the mortgage loan options is the convertible loans:

Hybrid and convertible ARM: there are two types of loans with this one. One is an ARM that you can convert to a fixed rate or a fixed rate home loan that you can covert to an ARM. These options give you the flexibility to change your mortgage loan after a few years. Advantage – having the ability to change between ARM and fixed rate. Disadvantage – if interest rates are high you might not wish to convert.

Interest Only Loan: this loan is good for people who work on commission or get big bonuses so they only pay the interest on their loan and when they get their bulk income they can put it towards paying off the actual loan. Advantages – you are able to get a bigger loan amount. Disadvantage – you have to pay in lump sums and when only paying interest you aren’t paying any thing off on your house.

Balloon loan: this loan is a fixed rate loan with small monthly repayments that usually last about 7 years, at the end of that time you must pay the loan in one big lump sum or have the option to refinance. Advantage – great for people who will want to sell their house before balloon payment is due and low interest rates. Disadvantage – you have to pay lump sum at end of the loan or refinance at usually a higher interest rate.

Reserve mortgage loan: this loan is designed for equity rich seniors. It requires no monthly repayments. Advantage – more money in your pocket. Disadvantage – loan needs to pay if you sell your house and reduces equity for inheritors.

Buy down mortgage loan: there is two types of this loan, a temporary and permanent. They both work on points and lower interest rates. Advantage – lower repayments. Disadvantage – need to pay higher down payment to lower interest rates.

3. The third option for loans is the special mortgage:

FHA mortgage: for first home buyers, people with little down payment and credit problems. Advantage – low down payment and repayments. Disadvantage – cap on loan and limited mortgage options.

Veteran Affairs Loan: only for people and widowers of the armed forces. Advantage – no down payment necessary. Disadvantage – not available for everyone and usually takes longer.

As you can see there are many loans you can get when you want to purchase a home. The best way to find out which one will work best for you is to talk to a financial professional and they will go through them with you.

Foreclosure begins when a property owner defaults on the mortgage of a property, mainly due to financial difficulties or the inability to keep up with the mortgage payments for some reason or another. In the event that a property succumbs to a foreclosure, it’s most likely that the property has not been maintained as it should have been. This means that perhaps the roof is in dire need of repair, a damaged foundation or the landscaping has been severely neglected, or a number of other maintenance or repair issues that may be costly. Some foreclosure homes may only need a fair amount of TLC. The amount of repairs needed or required for the foreclosure property may greatly reflect on the asking price. A major fixer upper may be offered at a lower than normal price, whereas a property that is in fair condition may go for a price just the below the market value.

When a mortgage lending institution decides to foreclose on a property, they will file a notice of default that will become a public record for all buyers who are interested in locating foreclosed properties for purchase. There are many places buyers can look to find foreclosed properties such as: various web sites on the Internet, real estate agents or brokers and real estate magazines.

Once the buyer locates a foreclosed property they are interested in, the buyer can assess the public records and check for any liens on the property. Most liens that are placed on foreclosed properties are for unpaid taxes. Interested buyers should also check the values of the neighboring properties before entering into a contract, to make sure they would be getting a fair market value.

Novice buyers may be interested in checking out bank owned foreclosure properties. These bank owned foreclosure properties may prove to be at lower risks to the novice buyer. With bank owned foreclosure properties, there are usually no tenants to evict, no liens against the property and no past due taxes.

Some lending institutions may be eager to sell their foreclosed properties and may offer to finance the foreclosed property to the buyer at a low market rate or with a small down payment. If the lending institution has already done an appraisal, the interested buyer may not have to pay an additional appraisal fee. Most lending institutions that are eager to sell a foreclosed property may also include title insurance that generally removes most of the risks that come with buying properties early on in the foreclosure process.

The more experienced buyer may decide to find a pre-foreclosure property owner about to go into default and offer to buy the property for a portion of the difference between the property equity and the market value. This may be an acceptable offer to a property owner who doesn’t want to end up losing all of the equity that has been invested in the property. Some pre-foreclosure property owners may offer bargains to a persistent buyer. This is mostly because at this stage, credit collection agencies are constantly hounding the property owners, who would in turn want to resolve these issues to avoid any further harassment.

Buyers may sometimes find that contacting the owner of a pre-foreclosed property can be difficult. Usually by this time, the property owner may not have any electricity or a telephone. Sometimes these pre-foreclosed property owners may also be difficult to deal with directly, due to a drug or alcohol addiction that put them in their situation in the first place. Some owners may also be hostile to the buyer or unpleasant to deal with because they are bitter and frightened about losing their home and perhaps they have no other place to go. Some of these owners may even see the buyers of their foreclosed properties as their mortal enemy and may do some extra damage to the foreclosed property before evacuating the premises.

Many foreclosed properties are normally sold at prices close to the assessed value. Depending on what city or neighborhood the buyer is interested in, what the neighboring property values are, how long it has been on the market and what amount of work needs to be done to the foreclosed property will greatly reflect on the asking price.

Understanding the differences between housing options when you are searching for a home to purchase is very important. In your search for your dream house, you will encounter housing terms such as stick built, modular, and manufactured (mobile home). Each type of dwelling has their benefits and drawbacks, both temporary and long term. Primarily though confusion exists about modular home manufacturing. Also, many are unaware of the benefits of owning one.

The overall production of modular homes is a unique process. However, design begins as with most floor plans; with an architectural engineer using a CAD (Computer Aided Design) program, and is approved by structural engineers for durability and safety. There are benefits to having your home constructed in the fashion of a modular home. The construction of the modular home sections begins on an enclosed factory floor. Quality control is strictly adhered too for each section of the house. Your home during the building phase is never subjected to inclement weather conditions, and usually the home can be ordered and delivered on site with in two weeks. Also, during this phase your contractor can set a pre - made foundation, and ensure that all necessary permits and grading work is completed in time for your modular home delivery. Finishing work such as crown molding, carpeting and appliance installation is completed once the home is joined and all utilities are hooked up. During this phase you can begin to pack and schedule your date for move in. Note worthy too is the fact that many modular homes can be special ordered from any standard house design on the market.

Other beneficial considerations of modular home purchasing are that because they meet state and local home building requirements, and are inspected by a certified inspector they usually exceed existing building codes, which makes obtaining financing easier. Banks and other types of mortgage lenders consider modular homes on par with the traditional on site stick built homes for varied reasons such as meeting state codes, and the use of a permanent foundation. Insurance rates for your home is in line and competitive with the traditionally constructed home too. Over all these factors influence two very important aspects of your home – its appreciation in value and the equity. If you ever decide to sell your home you will find few if any problems with anyone obtaining financing, or questioning the value of the home as compared to other stick built homes.

In a comparison between modular and manufactured homes the differences are clearly amplified, and the benefits of owning a modular home clarified too. When comparing them, the potential home owner must think in terms of the long run. Its true manufactured housing does have short term benefits, but over the long haul it might be wise to invest a little more money into a modular home. Take a glance at a few important comparisons below.

Modular Homes – Appreciate in value, manufactured homes depreciate.

Modular Homes – Set on a permanent home foundation, manufactured homes set on a block pier making financing harder if not impossible to obtain.

Modular Homes – Meet state and local building requirements and are inspected, manufactured homes don’t, and structural reliability can be faulty.

Modular Homes – Meet federal, state and local regulations, while manufactured housing must meet only HUD (Housing and Urban Development) requirements.

Modular Homes- Are accepted into most communities of stick built homes, but restrictive covenants exist on where a manufactured house may be placed.

Modular Homes – Are in comparison just as energy saving in heating and cooling as any stick built home.

Other benefits of modular housing are that many contractor groups specialize in not only assembly of the home, but also in the other facets associated with home site development. For example, larger firms can help you finance your new home. Also, site excavation, site preparation and the installation of the foundations for the home and garage can easily be done. Not only will this eliminate any unnecessary headaches for you, in the end it will save your hard earned dollars. Modular homes are fast becoming the housing choice for the future, but whatever housing option you choose make sure it’s a decision you can live with.

Ecommerce is rapidly expanding to the real estate market.  Sellers are looking to auction off down payments, lease agreements, or selling the home outright. Individual homeowners and real estate agents are turning to the Internet as an avenue for sales.  Buying your home online can be a risky venture.  On the flipside, there are some great deals out there.  If you decide to take this path, you should be aware of the challenges associated with buying a home site unseen.  The more educated you are, the better. 

First of all, the home could have major structural issues not evident in an online picture.  Pictures don’t always tell the whole story.  It has also become much easier to doctor photographs.  You have to consider the possibility that some sellers might not be as truthful as they should be.  After all, they are trying to sell the property, so the sales description is going to emphasize the positives and downplay the negatives.  Getting a fixer upper is one thing.  Living in a house that is structurally unsound is a completely different matter. 

Secondly, you must make sure that you know your property rights.  If you are buying land, you must make sure that you can have the utilities you want.  There might be restrictions that are not specified on the auction site.  There would be nothing worse than buying the property for your dream home and then discovering that you cannot have utilities.

Another potential hazard to buying your home online is not knowing anything about the area.  It would be well worth your time to do some investigating.  Is the property in an area that is prone to flooding?  Is the property accessible by car?  These are things that the seller might not mention in their ad. 

Also, it is easy to become a victim of online fraud.   There is really no way to regulate the online auctions.  The auction companies have their own guidelines in place to circumvent illegal activity, but with the high volumes of online business activity every day, it is hard to police every transaction.  The government may eventually step in and try to pass laws that will protect online consumers.  Time will only tell, so until then you have to keep your guard up.

On the positive side, it is important to note that online auctions are not legally binding.  The companies are not actually licensed to sell real estate; therefore, they are not true auction houses.  The service that they offer is advertising to potential buyers.  It gives buyers and sellers the opportunity to communicate with one another online and work out a legally binding contract after bidding ends.

When placing an ebay bid online, you should be aware that there are two types of bids: “Binding” and “non-binding”.  The term binding is not entirely accurate because it does not result in a legally binding contract. A Binding real estate auction means that you have placed a bid with intent to buy.  If you don’t live up to your end of the transaction, you will receive negative feedback.  It won’t result in legal problems, but it can hurt your business potential on Ebay.  Everyone looks at the feedback and most people won’t do business with someone if they have a lot of negative feedback.  A non-binding bid simply means that you cannot receive negative feedback if you fail to complete the transaction.

Always take the time to review the auction companies’ policies and procedures.  There should be a link to them on the main page.  If you have trouble locating them, contact the company directly.  You should be able to email them any questions that you may have and they should respond to your inquiries quickly.  Try to talk to people that have a lot of experience with doing business online.  It seems like just about everyone has some experience with online auctions.  They may have some horror stories, but don’t let that discourage you.  You can learn a lot from the mistakes of others.  If you prefer reading to chatting, there are also several books about the subject.  Visit the technology section of your favorite bookstore and you are bound to see a possible resource. Take all of the advice and use common sense when entering into an online real estate deal.  You will emerge as the winner and have a fabulous home to show for it.