Have You Considered Investing In Real Estate?

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Have you ever considered buying a property as an investment? The property market is not reserved for experts and millionaires – you too could use it to make the most of your hard-earned savings.

A lot of people only buy a house as a family home and find paying off their mortgage before they reach retirement a big financial burden. Sound like you? However, buying a house as an investment (not living in it and instead renting it out) can make you a lot of money. In fact, it’s been shown that property outperforms other investments such as stocks, shares and savings accounts to bring you a nice fat profit in the long-term.

Yet somehow we’re all too cautious about hopping on the property investment train. Why? There are a few common apprehensions, questions and ‘buts’ people have when first looking at property, but there are good answers to all of them. So, before the words ‘finance’, ‘invest’ and ‘mortgage’ turn you off, have a read of the below to get clued in on what property investment can do for you and your piggy bank

But I don’t have the money to invest in property!

It’s a common misconception that you need to have all the cash up front. US banks may lend up to 75% of the property purchase price for investors, so for a $250,000 purchase (the average housing price in Lewisville according to Zillow) the total capital you need is $62,500. IRA’s and 401K’s are ways to get the down payment.

But I don’t want to take out another mortgage!

Before you panic about taking out a second mortgage, remember that the tenants who will be renting at your property will be paying off the mortgage for you, and that taking out a mortgage to pay for your investment means making more money.

But isn’t it risky?

As with all investments, there are low-risk and high-risk options.

But how can I make money from my investment if all my pennies are tied up in the property?

1) The increase in the property’s value over time. A well-chosen property and market will see the value of your investment jump up significantly over the course of five-to-ten years. You can then choose to resell at that higher price, keep it for longer to increase profits further or pass on the investment to your children.

2) The rent your tenants will pay you. This can cover the mortgage and/or provide you with an additional regular income – remember, rents will also increase over time as the area you invest in becomes more popular.

But I don’t want to be a landlord!

You don’t have to be! There are property management companies that exist to take that responsibility off of your hands. They can handle everything, from decorating and tenanting to taxes and reselling, and you’ll still be able to make a healthy profit.

When you’re ready to learn more or if you’re already clued in and want some more in-depth market advice, contact Jim Trump & Associates today! (214) 609-7123 or jtrump@kw.com

DO NOT DELAY!! Move Up To The Home Of Your Dreams!

Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are still below 5%.

However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease.

Here is a chart detailing this point:

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Why You Should Sell Your House NOW!!

School is back in session, the holidays are right around the corner, you might not think that now is the best time to sell your house.  But with inventory below historic numbers and demand still strong, you could be missing out on a great opportunity for your family.

Demand is Strong

Foot traffic refers to the number of people out actually physically looking at home right now. The latest foot traffic numbers show that there are more prospective purchasers currently looking at homes than at any other time in the last twelve months which includes the latest spring buyers’ market. These buyers are ready, willing and able to buy…and are in the market right now! As we get later into the year, many people have other things (weather, holidays, etc.) that distract them from searching for a home. Take advantage of the buyer activity currently in the market.

There Is Less Competition Now

Housing supply is still under the historical number of 6 months’ supply. This means that, in many markets, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future. Also, new construction of single-family homes is again beginning to increase. A recent study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference). The choices buyers have will continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.

The Process Will Be Quicker

One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.

There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 19% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with an interest rate in the low 4’s right now. Rates are projected to be over 5% by this time next year.

It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should? Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important. 

For professional real estate service, contact The North Texas Home Hunter at (214) 609-7123 or jtrump@kw.com

 

10 Simple Steps to Losing Your House!

Open New Lines of Credit

Lenders must adhere to strict debt-to-income ratio requirements.  If you add a new car payment or credit card payment to the mix after you have been pre-approved, you debt-to-income ratios may now be too high to qualify for the proposed housing payment.

Run Up Balances on Current Credit Cards

Even if you don’t open new lines of credit, charging a substantial amount on a current card will raise the minimum monthly payment on that card your lender is using for financing. Again, this could throw your debt-to-income ratios completely out of whack!

Spend Down Payment Funds

Even if your lender verified down payment funds prior to your pre-approval, if your balance decreases to less than what you will need at closing and your lender requires new bank statements, this could cause a major delay in your closing date.  If you’re closing on a short sale with a hard deadline, you could end up losing the house if you cannot close in time and aren’t able to obtain an extension.

Lose or Switch Jobs 

Not much explanation needed here. If your qualifying income is no longer coming in every month, closing on your house isn’t going to happen unless you have a co-borrower who can carry the payment on his or her own.

Make a Late Payment on Your Credit Report

If your credit score is barely meeting the minimum threshold, one late payment could knock you out of the qualifying range.  If your credit score expires before closing and your lender needs to re-pull credit, then you would be in trouble if this has happened to you.

Failure to Communicate Alimony or Child Support to Your Lender

This information is important and will affect the amount for which you qualify. If it comes up too late in the process, there’s a chance you could lose the house, so please share this information with your lender, even if he or she doesn’t ask.

Failure in Communicating That You Are in the Market for a Condo

If you are purchasing a condo, the lender must factor in condo association dues, which can be very pricey. If your lender isn’t factoring a cushion for this into your pre-approval, you may find out that your debt-to-income ratios are too high once you are already under contract.

Getting a 10 Minute Pre-approval

Yes, I know you are busy, but getting a pre-approval shouldn’t be a 10 minute process with some online lender that you heard about on the radio.  Obtaining a mortgage loan is very complicated and your lender should spend time interviewing you, learning about your employment history, and reviewing the standard documents required for a mortgage pre-approval.  Just because you are supposed to receive court-ordered child support doesn’t automatically make that money qualifying income.  A lender must be able to show a history of receiving these payments on time, if not; the underwriter will not allow your lender to use the income.

Failure to Communicate an Employment Gap 

A lender should ask for your two-year work history upfront, and, if a large employment gap arises that your lender was unaware of, you could have issues if you don’t have a good letter of explanation.

Failure to Submit Lender-Required Documentation

Your lender may ask you for documentation several times throughout the process–in order to make sure he or she can submit your story to underwriting in a timely matter and close you on time. They aren’t doing this to be spiteful! You must be available via phone and email to respond to these requests in a timely manner.  If you aren’t, your loan won’t make it to final approval, and you will not be able to close on your home.

How Do You Make Sure This Doesn’t Happen To You? 

How can you be sure you won’t sabotage your own chances of closing on your dream home? Make sure you speak with a mortgage advisor who is knowledgeable, skilled, and thorough enough to make sure you’re not scaring underwriters away with your credit history, bank statements, and employment history.  A skilled loan officer will not conduct a 10 minute pre-approval or send you out to search for home without explaining closing costs and how to get to the closing table with ease. I have lenders that I work with that I trust implicitly, and will give you their information in order to streamline the lending process.

For professional real estate service, contact The North Texas Home Hunter at (214) 609-7123 or jtrump@kw.com

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Move Up Now–Create Wealth For Yourself!

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Many experts are currently discussing a variety of topics such as real estate as an investment, the movement on mortgage interest rates and reasons to buy now instead of waiting. It is important that we realize that this does not apply solely to the first time home buyer!

~The opportunity that exists in real estate today is there for everyone~

However, the family that already owns a home might be thinking that, if they wait, their home could be worth more next year than it is now. And that may cause them to delay moving up to the home of their dreams thinking it makes good financial sense. Actually, the opposite is true. This is the best chance a family has to buy up into the home that makes sense for their family right now.

We must realize that whatever percentage of value we gain on our house will also be gained on our dream home.

Let’s assume your current home is worth $500,000. Your house will be worth $520,000 next year if prices rise by 4% over that time (a number projected by the Home Price Expectation Survey).

However, the $750,000 home you are hoping to move into will also appreciate by about that same 4%. That means next year it will be valued at $780,000. You wouldn’t make $20,000 by waiting. You would actually be losing $10,000 ($30,000 – $20,000).

And, you will pay a lower interest rate on the mortgage than you probably will next year.

Plug in the numbers that apply to your house and the home you are longing to buy and see what the bottom line turns out to be for you.

That is how wealth is built in this country – by purchasing real estate at the right time, at the right price and at the right terms.

Go out and find your family’s dream house and buy it! Ten years from now, you will be glad you did!

Contact me for professional real estate service, (214) 609-7123 or jtrump@kw.com 

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Jim Trump
The North Texas Home Hunter
214.609.7123
http://www.JimSellsFlowerMound.com

As your sellers’ agent, I have the resources and experience to help you set a realistic selling price for your property to ensure that you get the maximum amount from the sale of your home. I will also offer and implement sage advice on how to sell your home in Flower Mound quickly, and how to make the transaction go smoothly.

Standing out from the competition is key to ensure that your property does not stay on the market too long, forcing you to reduce the List Price, when that could and should have been avoided altogether! I employ professionals that will help you to ‘stage’ your home to make it as attractive as possible to buyers who come to view your house.

Staging your home involves making it look as clean, colorful and inviting as possible, and that mean carrying out any minor repairs, refreshing the decor and paying attention to the exterior and landscaping. First impressions make a HUGE difference to prospective buyers and staging your home effectively will display it as to maximize the potential for procuring a quick and efficient sale. However, there may be larger improvements and changes that could benefit the value of your real estate before you actually put it on the market. Adding extra value to your home before selling enables me to set a higher selling price for your property and ensure that your investment in prepping yields a worthwhile return.

In recent years, home buyers have begun to prioritize green concerns and features when looking for a suitable property in which to live, which is very much a growing concern amongst buyers, and adding these features to your property will help place it at the forefront of the market.

Market statistics show that this is an increasingly significant factor in the Flower Mound property market, and it is an area that homeowners would be wise to invest in. As this article explains, adding green features to your home is one of the most cost effective ways of adding value to your property and making it attractive to prospective buyers. A very simple improvement that is particularly applicable to Flower Mound real estate is to invest in a new entrance. Yes, a new door! As well as improving the appearance of your property this will help with heating and cooling costs and stand up under extreme weather conditions. If you would like to make a bigger investment in this area consider adding solar panels to your home. This will add considerable value to your home as well as being tempting to prospective buyers as local suppliers continue to offer discounts and incentives for those who use solar energy. Siding is another feature that can be added to both improve appearance and energy efficiency. In terms of landscaping, properly placed trees and shrubbery not only look beautiful but are also a feature that will appeal greatly to viewers with environmental concerns. Trees can also reduce energy bills due to the shade they provide in summer and wind breaking in the winter, and the US Department of Energy estimates that well placed trees can save hundreds of dollars a year in energy costs.

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