How to Accelerate Your Mortgage Payoff – follow-up

racing up hill

I received a number of responses to my recent post How to Accelerate Your Mortgage Payoff.

Great! I hope, if you’re not already doing it, you will try this technique and see the amazing results for yourself.

I can assure you this works and is really very easy to do. We did it recently for our son and his wife when they bought their new home. They made the first payment and, for their housewarming gift, we made the next 11. Since we were paying principle only and no interest, it was a very wonderful and not-that-expensive gift to give.

By doing that, the 2nd payment they made was the first payment of year 2 on their original amortization schedule. An entire year of interest was saved, and the most expensive year for interest, the first.

As I mentioned in the original article, your online account immediately updates the amortization schedule allowing you to verify that the payments were applied correctly.

Before sending in those extra payments, we contacted the bank and they assured us any extra payments come off the next scheduled principal payment.  Just to be sure, we always include a letter of explanation, as we have known instances when the extra was applied to final payments (which have no interest on them and, therefore, no savings to you).

Hope you try this. Let me know how it works for you!

How to Accelerate Your Mortgage Payoff

racing up hill

How do you accelerate your mortgage payoff?

To begin with, you can send in extra mortgage payments at any time. Extra payments will, hopefully, be applied to the principal only, saving you a fortune in interest payments.

Here are some methods to make those extra payments work to your advantage and to make sure you get the most credit for any additional monies you send in.

1. Always make your regularly scheduled payment and be certain to make it on time.

2. Send any additional monies as a payment separate from the regular monthly payment.

3. Along with the extra payment, include a letter spelling out exactly what you want done with that additional money.

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Real Estate is the Best Niche

City

I heard the greatest line from John Reese. John is a mega entrepreneur and regularly makes $1 million a day online. This is the type of person I seek out to learn from.

“Don’t look for niche markets – go where the money flows and get into the stream.”

Chances are, if you find a “niche,” there’s no money there or someone would already be doing it. Besides, why do you want to spend time creating a market and leading customers to it, when others have already taken the time to do that for you? Go where the success is.

Hence, my niche, real estate.

Everyone lives somewhere. Everyone works somewhere. Everyone shops somewhere. Our population increases every year and no more real estate is being made. Want to make a ton of money? Jump into the real estate stream.

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There’s Never Been a Better Time to be in Real Estate!

So far this month of July, we have:

  1. Picked up 17 more properties to manage
  2. Got a short sale approved
  3. Put 3 more properties under contract to purchase
  4. Got a contract to sell one property that we partnered on with a student
  5. Closed on a property we sold
  6. Purchased 2 properties to flip
  7. Finished one flip and got a sales contract 5 days later
  8. Sold a property and ended up purchasing the house our buyer was selling
  9. Hired an assistant for our property acquisition specialist
  10. And, of course, maintained all the properties in our property management company

What’s happening in your business?

 

 

A Second Recession is About to Hit?

A “second leg” down in housing. Too much inventory. What do you think? And how will this affect your decision to buy or sell?

Interest Rate Discussion

percentage houses

When qualifying for a mortgage, of primary concern is your interest rate. The lower your interest rate, the lower your monthly payment and, ultimately, the lower the total cost of your home over time.

For example:
On a $100,000 30 year mortgage, with a 5% interest rate, you will pay $536.82 per month.
On the same loan with a 6% interest rate, you will pay $599.55 per month.

On a $100,000 30 year mortgage, with a 5% interest rate, you will pay a total of $93,255 in interest.
On the same loan with a 6% interest rate, you will pay a total of $115,838 in interest.

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Determining Property Values

houses

There are 2 main methods for determining property value:

1. Comparable sales – This is the most commonly used method to determine property value. Comparable sales (comps) include characteristics as similar to the one you’re pricing as you can find. These include:  lot size, square footage, home style, age, location. Heads up; an older 3 bedroom brick one story may not be comparable with a new 3 bedroom 2 story, even if they are on the same street.

When possible, use only houses that have sold within the past 6 months. The more recent the sale date the better. Use houses in the same, similar, or nearby neighborhoods. Stay as close as possible to the house you’re comping. The more similar the houses you’re comparing, the better. Try to use houses built within 5 years and within about 300 square feet of the size of the house you chose. It’s also best to use similar ages, style and lot sizes.

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What is an REO and Where can You Find Them?

Real Estate Owned

If a foreclosed property does not sell at public auction, the lender, usually a bank, takes title and it becomes Real Estate Owned (REO) by the lender. Since the lender does not want a non-performing asset on its books, it will clear the title (get rid of liens against it), maybe do some cosmetic repairs to the property, and put it back on the market at a discount to get it sold.

The reason you hear about so many REO’s right now is that most of the properties up for sale at foreclosure auction are worth less than the total amount owed to the bank. Typically, the minimum opening bid at these auctions equals the outstanding loan amount, plus the accrued interest plus any fees associated with the foreclosure sale. These properties aren’t selling at the foreclosure auctions because the opening bid is just too high. The lenders get these properties back then sell them at a discount to move them quickly.

REO’s are often listed with Realtors and you can find them on the MLS. You can also find out about them at the courthouse, often before they’re listed with a Realtor, so you’re able to negotiate directly with the bank.

There are many ways to find REO’s. Here are some resources for you:

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Looking for Motivated Real Estate Agent(s)

 

Welcome

Hey!  We’re looking for one or two more highly motivated Real Estate Agent(s) for our All Property Solutions brokerage.

We have 1 year as a full-service brokerage firm and 13 years as a successful real estate investment company.

Our ever growing property management division today manages 100 properties!

And, 0ur newest focus is growing the full service brokerage division.

Interested?  To find out more about us and what we have to offer, contact jim@allpropertysolutions.com for an interview.

You may also fax in your resume to 336-834-8863.

We look forward to hearing from you!

Open House – it’s time!

Open door

Happy Spring!  And, if you’re planning to sell a property, it’s time to get ready for Open House.

The nice weather will bring people out and you want to have your home’s best face ready! Even if you’re not putting it on the market for another month, now is the time to be getting it ready. Here are some things you need to do:

1) Clean up the clutter! Clean out cabinets and closets. Throw out what you can; give away what can be passed on; box up what you want to keep that you won’t be using often. This gives your home a more open and airy feeling for buyers who will be coming through. It also gets you closer to being ready to move! Read: Cleaning Out!

2) Clean up the yard. Get rid of all winter debris – anything dead or dying. Rake the yard well and throw out new seed. Freshen up flower beds with bark or straw and plant flowering plants when the weather allows. Cut back overgrowth.

3) Exterior touch up. Make sure the front door looks fresh.

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