Building Wealth By Owning Real Estate: Five Lessons for Us All

"Building Wealth By Owning Real Estate: Five Lessons for Us All" is the blog series I just completed.   These tidbits and antecdotal stories are the stories of my life, but they have served me well, and I am on the way to where I want to be financially; despite enduring some trying times financially as a family (which we've done without too much suffering).  I hope you'll read the short stories, and commit the lessons to memory.  Let them guide you in your real estate decisions.  You won't be sorry.

Lesson #1: Real Estate Always Has Value:  It was 1975, the market was down and the developer could not sell the homes.  How would he pay my dad - the builder?

Lesson #2: Pay Down Your Debt:  Have you ever been to a mortgage burning party?  Imagine never writing another check for rent or mortgage again.  Start planning your mortgage burning party today.

Lesson #3: Mortgages Matter:  Flash forward to 1981... Interest rates are soaring, averaging around 14%.  How could anyone buy a home?  Well, in this post, you learn how with "creative financing" that put more money in the seller's pockets and made buying possible.

Lesson#4: Buy As Early As You Can:  My first apartment... it was awful, and I couldn't imagine how I would ever be able to pay that rent.  Why were my parents' mortgages, and the mortgages of the parents of my friends, so much cheaper when their homes were so much nicer?  I learned, and now I am living it.

Lesson #5: Appreciating Real Estate:  OOOOHH... So it's not just about buying, locking in your housing payment and paying down your debt.  Real Estate is an ASSET, and it grows in value.  While you live there.  Magically.  But by how much?  You'd be surprised how predictable the rate of appreciation is over the long run.

I hope you enjoy these short stories from my life... you've learned a lot about me in the process, but hopefully you've learned even more about the real estate market and why you, too, need to own at least your primary residence.

DISCLOSURE: This is not a sales pitch - it was not when I was learning these lessons, and it is not now.  Yes, I would love to be the one to help you with your real estate needs - buying or selling.  But rest assured, the advice comes "no strings attached."   It is the same advice I give to my own children.... and there is no one in this world I care more about than my own children.  So if it's what I tell them, then you know I believe it.

I wish you much success in your real estate endeavors. If I can ever be of service, please don't hesitate to reach out to me:

Vicky Chrisner

Fieldstone Real Estate

703.669.3142

MyAgentVicky@Gmail.com

www.VickyChrisner.com

The Four Cs of Lending

If you've recently gotten engaged or married, you probably can recite the principles you learned about the "4-Cs" as it relates to diamonds... and yet, when it comes to learning about the "4-Cs of Lending", most people pay far too little attention.  Well, if you're thinking about refinancing or buying a new home, this post is for you....

The 4-Cs of Lending:

Capacity - Do you have the ability to pay back the loan?  Here lenders look at your income and debts.

Credit/Character - Do you have a record of paying back your other debts on time?  This is where your credit report comes into play.

Collateral - Whatcha got?  With mortgages and home loans, this is the house that you'll be using to secure the loan.  With a car loan, the car is your collateral; with a secured credit card, you may have money in the bank that is used as collateral - it is whatever you're promising to give the bank if you don't pay your loan back as agreed.  With home loans, lenders look at the condition and value of the property and it's use...and value to you.  Primary homes are better collateral to a lender than an investment property - let's face it, we're all more likely to pay for the "roof over our head" than a place that we own but never personally use.

Cash - Never under estimate the value of cash.  With home loans, lenders look not only at your "reserves" (the money you have available to you should you get into financial trouble), but also the equity you have in your home (if you're refinancing) or the amount of your downpayment (if you're buying).  They want to make sure you have "skin in the game" - that if you lose the home to foreclosure, you are losing your own cash, too.

Take a look at this great chart which shows how lenders review loan applications and see how you rate - JUST CLICK HERE.  This chart comes to us courtesy of:

Marc Aymard

Sales Manager; Mortgage Loan Officer

Bank of America Home Loans

2936 Chain Bridge Road, Ste 300

Oakton, VA 22124

703-728-1759 - Mobile

703-319-5672 - Office

866-923-5409 - Fax

marc.aymard@bankofamerica.com

Buying After A Short Sale

Have you fallen victim to the real estate market?  Many have.

You bought (or did a cash out refi) at the height of the market.  You watched your personal wealth plummet as the housing values in the neighborhood took a dive.  And, then, "life" happened - you lost your job, were transferred, got married, divorced or some other event occurred that required you to move.... but sell?  How?  You were upside down.  After considering all other alternatives, you chose between bad and worse and avoided a foreclosure by completing a short sale. Congratulations. 

Now what?  Many lenders require you to wait 2 - 3 years before are permitted to buy again.  It's almost like being "sentenced" as a punishment for your sins.  If only you could take advantage of this incredible buyers market..... well, you can.

I have a lender with a "short sale plus" program.  They recognize that most homeowners who complete a short sale were victims of the same circumstances we're all dealing with - and then "one more thing" happened and was the "final straw".  They couldn't wait out the market, they had to get out of the mortgage. 

Is this you?  If you have just 3.5% as a down payment, you, too, may be eligible to buy TODAY, even if it's been only a few months.  This is not a scam, it's a new program.  Rates are currently BELOW 5% for these loans on a 30 year fixed interest rate.  Interested?  Contact me directly.

http://www.vickychrisner.com/

Ofc: 703-669-3142

Cell: 703-728-5766

VChrisner@KW.com

Notes:
*  This is NOT for people who've had a foreclosure - short sales only.
*  People with foreclosures are not generally eligible for loans for 3 years after the foreclosure date.
*  Veterans can do a VA loan 2 years after a foreclosure.

For continuing updates on changes in the real estate market, stay tuned to www.TheRealEstateWhisperer.blogspot.com

For information on Living in Loudoun County, check out

www.LivingInLoCo.blogspot.com

To order a Market Snapshot (showing sales in YOUR neighborhood),

visit: www.20175homesales.com

To search for homes for sale, go to

www.VickyChrisner.com

It's a Great Time To Buy Investment Real Estate, But How?

Everyone realizes it's a great time to buy investment real estate, but how? Many people have longed to own investment real estate, realizing it is often the best way to long term wealth. But, coming up with the cash down payment, and taking on the extra liability of another mortgage are often obstacles. There is a great way, however, to invest in real estate without worrying about these obstacles, and most people don't even know it's an option. You can legally, and without penalty, use your retirement funds to purchase real estate, through a self directed IRA. Let's say you have $50,000 in your retirment account (we won't talk about what it was last year). You can use $30,000 to use as a down payment on a $100,000 investment property, and get a 70% mortgage. In this market, sellers will often cover your closing costs, so your funds go strictly toward the purchase price of the property. These loans are available to your IRA (not you), and the lenders do not consider your credit, your income, or your debt. To be honest, they don't care about YOU at all. This is an investment, and it is your IRA that is investing. You can purchase the property, rent it, own it, and eventually sell it... all in the name of your IRA. Sure, this type of investment is not for everyone. But, for those of us with more trust in the real estate market than the stock market, it might just be the type of transaction that allows YOU to finally get into real estate investing. We regularly coordinate webinars on this subject. If you're interested in registering, please contact me directly at vchrisner@kw.com.

Investors can get more mortgages!

Fannie Mae realizes that investors "can play a key role in the housing recovery", and has changed their guidelines now allowing investors to have up to 10 properties financed! There are some restrictions, like a minimum credit score of 720, and maximum loan to value ratios of 70-75%, no bankruptcy or foreclosure in the past 7 years and no late payments in the last 12 months. Plus, any rental income on properties used to qualify must be supported by 2 years tax returns. But, take note... investors are being welcomed back into the mortgage market!