Once you have decided to buy your first house your goal is not only to find the best rates but also to find the best mortgage to suit your circumstances and plans for the future. It is a good idea to sit down and write out your plans especially if you are planning to buy the house with a friend or partner.
Are you going to buy a small flat to get on the housing ladder with the intention of trading up to a larger house later or can you afford to buy a large house now? Do you intend to both work full time for the length of the mortgage or do you intend to have a career break and go back to college or perhaps you plan to have children in a few years time? A mortgage is a long-term commitment so some initial planning could save you time and money.
When you have your plans on paper calculate how much of your savings you will have towards the deposit. Don’t forget to put aside money for the other costs in buying your home such as solicitor’s fees and stamp duty and work out how much you will need for furniture and fittings. Finally write down your salary and any other sources of income, as this will influence how much you will be able to borrow. Traditionally most lenders would allow you to borrow up to three times your salary plus the salary of a second purchaser but with todays low interest rates and high house prices a few lenders have raised their limit to five times the first salary. If you are planning to take advantage of these loans make sure you are able to cover the payments if the interest rates go up.
Now that you know roughly how much you can afford is the time to start searching for the right type of mortgage for you. Your individual circumstances will dictate the type of mortgage you should have. There are two main types of mortgage a capital repayment and interest mortgage and an interest only mortgage.
A capital repayment mortgage is where the interest and the capital are calculated upfront and paid in equal instalments throughout the term of the loan. This type of loan is best for someone who is planning to stay in the house for a number of years this is because in the first few years most of the repayment goes towards paying the interest and only a tiny amount comes off the capital sum. So if you move after a few years you will find that very little has been paid off of the amount borrowed.
An interest only mortgage is where you pay only the interest and a separate policy such as an endowment, ISA or pension plan to pay off the capital amount at the end of the mortgage term. Endowment mortgages have had a bad name in the past as investments performed less well than expected and the endowment policies were returning sums much less than the amount they were supposed to cover.
Once you have decided the type of mortgage to suit your needs it is very easy to go online and search through a huge number of lenders products, and save yourself thousands of dollars on mortgage payments every year, but also, to save time and hassle by simplifying the loan process and reducing the paperwork.
About the Author
Carol Bell is the Author and Webmaster for http://www.good4mortgages.co.uk where you will find more information on mortgages. We also have many articles on mortgages on our other website http://www.amazingarticles.co.uk
Article source:
How to Find the Best Mortgage for your First House Purchase
Many real estate investors enjoy “flipping houses,” or buying and selling houses quickly for profit. Not all flips are fixers. However, rehabbers make millions turning ugly houses into dollhouses. On the other hand, some inexperienced investors lose money buying houses that just don’t turn a profit.
If you’re looking to get started investing in real estate by fixing and flipping houses, you’ll want to know what type of property to buy.
HOW TO FIND THE PERFECT FIXER
1. Know Your Market
Your first task, exploring your market, helps you know a bargain house when you spot one. Look at many houses for sale in your area. Keep track of sales and how long the houses take to sell. Ask selling real estate agents about the terms of these sales because this helps you understand how sellers market their property (some of this information is public record). For instance, if a seller paid closing costs for the buyer, did the price rise from the listed price accordingly? Or, did the seller come down on the price and also pay the buyer’s costs?
Examine the sales that sell quickly. What home features and financing options prompted the fast sale?
Also, look at model homes. Buyers often buy resale homes because they can’t wait for a new home to be finished. However, these buyers like the distinctive features new homes offer. Visit model homes and take notes on how details like a water fountain or a new state-of-the-art appliance makes a house sell itself. When you remodel your fixer, you’ll know what attracts buyers and you’ll make smart redesign choices.
2. Know When “Ugly” Means “Gold”
When you first start out in your real estate “flipping fixers” business, you’ll want to look for houses needing only cosmetic work. Look for houses that just need cleaning up, painting, and new flooring. Use your imagination when viewing these homes. Try to visualize the finished dollhouse as you look at structural features and the surrounding homes. Make offers on the ugliest houses in decent neighborhoods.
Don’t be afraid of stinky houses that show horribly. Search for fixers with peeling paint, holes in the wall, stained carpeting, and trash in the yard. Remember, these houses won’t look good to most buyers, but other real estate investors see them as gold mines.
3. Know When “Ugly” Means “No Thanks”
When you’re new to real estate investing, always remember your limitations. Use caution when considering houses that need structural repairs. Some rehabbers replace walls, plumbing, structural beams, sub-flooring, and electrical systems. These experienced real estate investors acquired those skills after years of experience or they have the money to pay for professional help.
If you find a house with structural problems, get estimates from reliable contractors to do the work. If the walls have too many cracks and bumps, you may need to hang new sheet rock or hire a professional plaster refinisher. Check for signs of plumbing problems such as water stains under sinks and loose flooring, and get estimates for professional repair. Take professional estimates into account before deciding whether or not to purchase an investment property. Any big expense decreases your eventual profit.
Turn Yucks into Bucks
Why would anyone want to do this hard work? How much does the average rehabber make? In Ohio, real estate investors buy houses expecting a profit of about $30,000. In Southern California, many investors make $50,000 to $100,000 on each house.
When you find a garbage-filled, flea-infested house in a family neighborhood, take your bug spray, hold your nose, and get ready to make a difference, in the neighborhood and in your bank account.
You can make a fortune fixing nasty houses. Know your market. Know when “ugly” means profit in your pocket, and when to keep looking for the house with the hidden gold mine.
Copyright ? 2005 Jeanette J. Fisher. All rights reserved.
About the Author
Jeanette Fisher teaches beginning real estate investors five easy steps to find, finance, and fix houses for profits. Free ebook on fixing houses using interior design strategies for top-dollar sales, http://www.doghousetodollhousefordollars.com/
Article source:
Flipping Houses for Gold How to Find the Perfect Fixer
Investors love to make a high return on their money. That’s why so many millionaires invest in real estate. You can leverage your money using other peoples’ money when you finance real estate.
Many real estate investors make $5,000 to $10,000 or more by flipping houses. These investors buy a home from a distressed seller and resell it quickly for a profit. Just because a seller has serious problems like a pending foreclosure or divorce doesn’t mean the house is a fixer. Many distressed sellers offer prime houses in perfect condition discounted for a quick sale.
Distressed sellers jump at the chance to get out from under their overwhelming problems with an offer to close in ten days. To purchase a home quickly, you need to be prepared to offer cash or a have secure loan in place with a reliable mortgage lender.
Other real estate investors prefer to buy fixers from distressed sellers. Distressed fixers present the best bargains to make the highest return on your money. For instance, if you put 5% down on a $200,000 home, spend $5,000 fixing the house up, and another $3,000 in payments, your cash investment totals $18,000. If you sell the home for a $70,000 profit like many rehabbers, you can see that your return on your investment of $18,000 for two months exceeds most other types of investments.
This investment plan assumes that you have the knowledge and skills, time to work on your fixer, and that you sell the house as soon as its finished to a qualified buyer. Home improvement centers help you with how-to classes, brochures, and advice. You need to give up your free time–TV, parties, leisure activities and work on your fixer. You could hire workers, but contractors and laborers work slowly and eat up your profits.
The last part of the equation, selling your house quickly to a qualified buyer means you need to do your homework. Many investors seek free help from a loan officer to price the house right and to qualify their buyers. These investors earn the sales commission by selling their houses by owner.
The most important issue, how you fix up your house, ensures that you quickly attract a buyer willing to pay top dollar for your transformed property. Investors using Design Psychology strategies for fixing houses sell their homes, for more than the asking price, three hours after putting the yard sign out.
Whether you want to make money investing in real estate by flipping or fixing houses, you need to understand your market. To get started in your real estate business, go house shopping. You’ll soon learn how to pick up a flip or a fixer and be on your way to making a high return on your money.
Copyright ? Jeanette J. Fisher.
About the Author
Jeanette Fisher teaches investors and home sellers five ways to get more money. Free ebook “Design Psychology for Selling Houses” http://www.doghousetodollhousefordollars.com
Article source:
Flipping and Fixing Houses for High Return on Investment Capital
Tags: capital, fixing, flipping, high, houses, investment, return
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