Archive | July, 2017

Other People’s Money for College

25 Jul

Consider the goal of funding a child’s college education in the future. If “other people’s money” in the form of a scholarship is not a possibility, there still may be another way to use some “other people’s money.”26458431-250.jpg

A $25,000 investment into a mutual fund paying 5% would earn $1,250 in the first year. Alternatively, the $25,000 as a 20% down payment to purchase a $125,000 rental home appreciating 3% a year would have gone up by $3,750 or three times that of the mutual fund in the first year.

The mutual fund’s growth depends on the value of the money invested. Rental real estate benefits because a 20% down payment controls a much larger asset because you’re using “other people’s money.” Leverage allows the investor to profit not only from the amount of cash invested but from the value of the investment.

With a 20% down payment and current interest rates, a typical rental would have a positive cash flow. In ten years, the equity could be $75,000. On the other hand, the $25,000 initial investment in a mutual fund earning 5% annually would only grow to about $40,000 in the same 10 years. It would require an additional $2,700 each year to reach the same $75,000 value.

Leverage is just one of the many benefits that make rental real estate the IDEAL investment. Whether you are saving for higher education, retirement or wealth accumulation, consider rental real estate. Using single-family homes as investments are attractive because homeowners have a better understanding than many other investments and self-management is a possibility.

UPGRADED CONDO CLOSE TO SMU!

20 Jul

raw_0018

5819A  E. University Blvd, Dallas

2 Bedrooms / 2 Bath / Upgraded Condo

Check out the full motion HD-video here!

Upgraded condo is move-in ready! Convenient location close to Mockingbird Station, walk to Central Market for breakfast, 1 minute from 75, close to SMU so perfect for students! Minutes from Dallas, Deep Ellum, Uptown, AA Center…everywhere you want to be.

Recent updates include: Kitchen granite, cabinets, stainless steel KitchenAid appliances, hardwood Floors, bath: granite & quartz counters, sink & faucet; Energy efficient windows; stainless refrigerator stays with home; dishwasher will be replaced.Master bedroom has 3 closets, updated bath with quartz counters. Fenced patio is partially covered. Two living areas; one would make great home office or a larger dining room. Assigned parking spot. Community pool

Please contact Jeff Jacobs at 972-978-6539 for more information or click HERE.

For more information and other homes for sale in this area, check out www.myrealtytown.com 

Assumptions are an Alternative

18 Jul

FHA VA Assumption.png

In the late 80’s, both FHA and VA began requiring buyers to qualify to assume their mortgages. The main reason there haven’t been many assumptions in the past 25 years is that interest rates have been steadily going down and if a person has to qualify, they might as well do it on a new loan and get a lower interest rate.

Based on projections by Fannie Mae, Freddie Mac, the MBA and NAR, rates for the second half of 2017 and 2018 are expected to be higher. When interest rates on new mortgages are higher than the rates of assumable FHA and VA mortgages in the recent past, it becomes more advantageous to assume the existing mortgages.

FHA and VA loans originated with lower than current interest rates have great advantages for buyers and sellers.

  1. Interest rate won’t change for the qualified buyer
  2. Lower interest rate means lower payments
  3. Lower closing costs than originating a new mortgage
  4. Easier to qualify for an assumption than a new loan
  5. Lower interest rate loans amortize faster than higher ones
  6. Equity grows faster because loan is further along the amortization schedule
  7. Assumable mortgage could make the home more marketable

An Assumption Comparison can help determine the savings and financial benefits of an assumable mortgage with a lower rate.

2704 Piersall Drive, McKinney

18 Jul

2704 Piersall 1http://properties.houselens.com/61257/2704+Piersall+Dr%2C+McKinney+TX+75070

Stunning & immaculately upgraded one story on premium lot in sought after Hardin Lake built in 2016 boasts a beautiful lake view & rare 3 car garage! No expense spared when building this home made of the finest materials and highest quality upgrades. Some of which are an  8ft  Alder front entry door, wainscoting in the foyer, Knotty Acacia hardwood, upgraded carpeting, plantation shutters, solid core doors and beautiful recessed lighting,  The chef’s kitchen includes a large  granite island for entertaining, 42in custom crafted cabinetry , stainless steel GE energy star qualified appliances, Herringbone tile backsplash, stylish pendant light fixtures and convection oven. The conveniently located and private study has vaulted ceiling and French doors.

This highly desired impressive open floor plan  provides a spacious family room  that  has a large  cast stone fireplace with gas logs,  Klipsch speakers in the ceiling, 5.1 surround sound prewiring, network outlets and  HDMI in wall cable.  The inviting and large master retreat has a Tray ceiling,  large walk in closet that leads to the exceptional master bathroom with an upgraded walk- in shower,  2x2in Mosaic Tile shower floor, frameless shower window, Knotty Alder Cabinets with double Ebony finish and additional upper storage cabinets.

Other wonderful upgrades and features are a 3 car garage with insulated walls, utility sink, Polyaspartic coated garage floor, excellent covered patio overlooking a spacious backyard with room for a pool that backs to a lovely greenbelt.

 

2909 PALO PINTO DR-MELISSA TX Stunning home in sought-after Villages of Melissa offers incredible living space, a popular open floor plan, over sized lot & beautiful curb appeal.Upgrades- features are 3 car garage*upgraded kitchen w espresso cabs, granite & stainless appliances*cast stone fireplace*large & split master*large bedrooms up all with WIC*huge backyard & covered patio backing to trees*iron spindles*brush nickel hardware*stone elevation*large gameroom-entertainment niche*study desk area*deco tile & stain-grade cabs in master bath*neutral tones*Frieze carpet*Nice community pool area & move in ready. Priced to sell and located just minutes from 75!

13 Jul

http://properties.houselens.com/JeffJacobs/60909/2909+Palo+Pinto+Dr%2C+Melissa+TX+75454

Family & Friends Mortgage

11 Jul

Anytime a lender and borrower can agree on rates and terms, it can be a good match but IRS has specific rules that govern the transaction especially when the parties are family or friends.26614035-250.jpg

The loan must be done in a business-like manner with a written note specifying the loan amount, interest rate, term and collateral. IRS requires that the mortgage be a recorded lien to allow the interest deduction.

Sometimes, a friends and family situation might have a less than normal interest rate on the mortgage. However, the rate charged in the note is regulated by the minimum applicable federal rate which is published monthly by IRS based on current Treasury securities. For July 2017, the rate is 2.57% for terms over nine years.

The seller must report the interest paid to them along with the name, address and Social Security number on schedule B when the buyer uses the property as their principal residence. A mortgage between family and friends can be good for both parties. It may allow the borrower a slightly lower rate without the expenses of a traditional lender while giving the note holder a higher rate than they can earn in available investments.

Your tax professional can guide the transaction whether you’re a buyer or a seller and your real estate professional can help arrange to have the documents drawn and filed.

Down Payment Problem – Are You Sure?

4 Jul

There is increasing difficulty for first-time home buyers to save for their down payment as indicated in the graph. Several factors that contribute to this trend include rising rents, rising home prices, student loan debt and flat wages.down payment graph.png

Some would-be buyers feel they cannot buy a home today but a large part of those decisions may be based on inaccurate assumptions.

Nine out of ten non-owners believe they need ten percent or more for a down payment. The typical down payment for first-time buyers is six percent. VA has 100% loan programs as well as USDA for certain qualifying areas and buyers. FHA is known for 3.5% down payments. And FNMA and Freddie Mac have down payments as low as 3% and 5%.

There are gift provisions available for buyers who have an “angel” who would like to help them with their down payment.

There are ways to borrow against a person’s qualified retirement program for a down payment. It isn’t necessarily limited to the buyer but could include a relative. Interestingly, a son or daughter can borrow against their retirement to benefit their parents.

In some respects, having good credit and sufficient income is more important than the down payment. Don’t rely on “common knowledge.” Get expert advice and counsel to see if there is a way to advance your dream of owning a home.

%d bloggers like this: